Subscriptions for Physical Goods Will Overtake Digital Subscriptions by 2025
The market for consumer subscriptions for physical goods will grow from an expected $64 billion in 2020 to more than $263 billion in 2025, according to Juniper Research. These offerings, providing physical products on a recurring basis, will overtake the market for consumer digital service subscriptions in 2022, despite the significant lead the digital sector has had in this area, as many different consumer businesses seek to boost recurring revenue.
The new report notes that the COVID-19 pandemic has brought the physical goods subscription economy into common awareness. With that broadening awareness, Juniper Research expects the market to quadruple in value over the next five years. There are few industries that are not amenable to a subscription model; making subscriptions a possibility for many different types of goods.
Juniper Research expects a global average of two physical goods box subscriptions per subscriber by the end of 2025, in the same way that multiple digital video subscriptions are common. Consumers in North America and West Europe will generally use more than this, as logistical networks are more solidly in place and subscription models in general are more established.
Multiservice subscriptions, that provide several services for a single cost, will be a $69 billion industry by 2025. In contrast to many sectors, these will be led by offerings from tech conglomerates, like Amazon’s Prime service and the Apple One subscription. These offer multiple digital services together in a way that many competitors cannot.
"The digital subscription market will be heavily disrupted by multiservice offerings," remarked research author James Moar. "Physical subscriptions are insulated against this to a degree, as many are produced directly by the goods providers. However, we expect some subscription marketplace providers to play an analogous role in the coming years."