Subscriptions for physical goods will quadruple by 2025, and eclipse digital: Report
The physical goods subscriptions market is set to quadruple in size over the next five years, and eclipse digital subscriptions in two.
The COVID-19 pandemic has lit a fire under the consumer market for subscriptions to physical goods, which is set to quadruple in size over the next five years.
That’s the key finding from global research released this week by Juniper Research.
According to the new report, Subscription Economy: Industry Disruption, Value Chain Analysis & Market Size 2020-2025, the global market for subscriptions for physical goods is set to dramatically jump in value, from an estimated US$64 billion ($90 billion) in 2020 to more than US$263 billion ($370 billion) in 2025.
At this rate, physical goods subscriptions will surpass the market for digital subscriptions in 2022.
The report notes the pandemic, and its associated lockdowns, has brought increased awareness to the subscription economy, and there are few consumer goods that would not be suited to a subscription model.
The research predicts the average global subscriber will have two physical goods box subscriptions by the end of 2025, although the number is likely to be higher in North America and West Europe as markets are already established there.
In Australia, local alcohol subscription services have seen sales spike during the coronavirus lockdowns, as shoppers stayed home and looked for convenient ways to buy their favourite drinks, while flower delivery services and subscriptions also appeared to boom.
Beauty box subscription startup Bellabox also saw an uptick in sign-ups during the first lockdown period across Australia, with co-founder Sarah Hamilton saying the interest was driven by consumers investing in “self-care”.
“They want a treat that comes in the mail,” she told SmartCompany.
The market for multiservice subscriptions, such as Amazon Prime or Apple One, will also continue to grow, but will continue to be dominated by the large tech companies.
These subscriptions, which offer multiple digital services for a single price, are expected to become a US$69 billion market over the next five years, according to the report.
