This article was written by David Zandman, copywriter for Earnest.
If you listen to the media, we millennials are killing everything. But in between slaying the car industry and paper napkins, there’s one thing millennials are actually reviving: subscriptions. Yes, in case you hadn’t heard, subscriptions are thriving.
To be sure, these pay-by-the-month services come along way since the wine and record clubs of the ‘80s and ‘90s. Today there’s practically nothing that hasn’t been subscription-ified: pet supplies, dinner, clothing, coffee, and of course, razors.
MySubscriptionAddiction catalogs more than 2,000 subscription boxes alone and visits to subscription box websites have shot up from around 700,000 in 2010 to over 20 million in 2016, according to Inc.
Entrepreneurs and investors like this business model because it provides reliable revenue. Rather than switching brands every few months, a subscriber may stay for life. And customers like them because they (theoretically) save time and provide better value than traditional options.
Are Subscriptions Saving You Money?
But do they? Does putting your expenses on autopilot really minimize impulse buys and take advantage of economies of scale? How smart is it to subscribe to MealPal for lunch, Blue Apron for dinner, MoviePass for movie tickets, and Sock Club for ummm…socks? Not to mention all the individual household products you can subscribe to on Amazon using their Dash buttons.
Like many things in life, it depends.
Let’s say you pay $6/month for a razor subscription, $60 for Blue Apron, $10 for Spotify and $8 for Netflix. That’s $84 per month. If you bought these things a la carte, you’d pay closer to $8 for the razors (assuming four blades per month), a grocery haul of undetermined cost to stock a kitchen sufficiently to prepare all those meals, $1.29 for each song on iTunes, and $4 for each movie you might rent via Apple TV (plus the cost of the device itself). Needless to say, the economy of subscriptions is obvious.
But subscriptions are designed to save both money and time—and for many people, these two are interlinked. Steve Jobs famously wore the same outfit every day to minimize the decisions he had to make (And Mark Zuckerberg followed suit, no pun intended.) Of course, we’re not all billionaires. But streamlining life’s little choices, even if it only saves a few minutes a day, does leave more time for working, cooking, playing with your kids, or any other activity.
But for others, the lost satisfaction of researching, browsing and making one’s own choices is not worth the tradeoff. Despite the modern ‘paradox of choice’ (which is said to paralyze decision-making by overwhelming us with options—see the famous Borat cheese scene), many people still relish the opportunity to curate their consumption.
How to Break Up with a Subscription
Subscriptions are also designed to be very hard to leave. Many subscriptions are set to auto-renew, ostensibly to prevent any break in service—but in practicality, to slip stealthily onto your monthly credit card statement. There’s even a company called Trim that helps people identify and unsubscribe from these sneaky budget busters.
And modern subscriptions (and memberships) are even stickier than those in previous generations! Fitness startup ClassPass, for example, reminds users on the verge of cancellation that they will face a $79 reactivation fee if they decide to return (a fee that’s often waived during promotions), and then offers several lower tiers of membership to keep them as active subscribers. In my case, this worked. My membership is currently ‘on hold,’ for which I pay $15 per month. Using the power of data and A-B testing, tech-savvy brands can get near real-time feedback about which pricing strategies are working.
Ultimately, locking in expenses in advance is a sound strategy for many of us, for certain types of products we consume regularly. Just be sure to keep close tabs on your subscriptions, particularly by tracking trial periods and setting calendar alerts to cancel before you’re charged. And remember—conscious consumption is always preferable to constant consumption.