--- description: Capterra interviewed 1,000 online consumers about their use of subscription services in order to assess the subscription economy in Australia. Read more here. image: https://gdm-localsites-assets-gfprod.imgix.net/images/capterra/og_logo-e5a8c001ed0bd1bb922639230fcea71a.png?auto=format%2Cenhance%2Ccompress title: Are Australians still interested in subscription services? --- # Subscription services: Are Australians still interested in signing up? Canonical: https://www.capterra.com.au/blog/3117/subscription-services-research-australia Published on 03/10/2022 | Written by Laura Burgess. ![Subscription services: Are Australians still interested in signing up?](https://images.ctfassets.net/63bmaubptoky/OttwzGUAJmdZlwNyz6Wqq2RYMApgMyS-lWa9-gzjzLs/1415e15c4421c5c75bda45d459597887/Subscription-services-AU-CAP-Header-image.png) > Subscription services are a popular way for consumers to digitally stream films and music, sign up for online courses, or regularly receive products in the post. Here, Capterra examines consumer interest in using these services and how the subscription model can benefit small to midsize enterprises (SMEs).  ----- ## Article Content Subscription services are a popular way for consumers to digitally stream films and music, sign up for online courses, or regularly receive products in the post. Here, Capterra examines consumer interest in using these services and how the subscription model can benefit small to midsize enterprises (SMEs).  In this articleDefinition of the subscription business modelPopular types of subscription boxes and servicesWhy some consumers resist signing up for subscription services altogetherHow much Australians spend on monthly subscription servicesConsumer concern about storing credit card detailsThe future of Australia’s subscription economyThe concept of the subscription business model has been around for hundreds of years, but the pandemic saw a surge in subscription adoption, which currently continues to thrive. Research shows that the average household in Australia has 2.3 subscription streaming services active. Subscription services are not only convenient for consumers but provide a way for business owners across every industry to retain long-term customers who bring in recurring revenue. Which subscription services have consumers signed up for the most? To answer this question and to further explore the subscription economy, Capterra surveyed 1,000 Australian online shoppers aged between 18 and 65. The full methodology is available at the end of this article. Definition of the subscription business modelA subscription model is a type of business where consumers pay a recurring fee for access to a product or service. Customers pay weekly, yearly, or monthly and may renew their subscription after a certain amount of time. The consumer may use a subscription service for the convenience of automatically repurchasing their favourite products, particularly if they lead a hectic lifestyle.Capterra divided the subscription model into two defining categories:Traditional: Online subscriptions to service streaming platforms that offer video (e.g. Netflix, Stan, HBO Max) or audio content (e.g. Spotify, iTunes) and come with unlimited access to a catalogue.Non-traditional: Online subscriptions to platforms that regularly deliver subscription boxes (beauty items, food, or replenishment products) in the post, or offer services with access to websites or applications (educational courses or health and fitness classes). Capterra found that 87% of survey-takers subscribe to at least one product or service. Over half of respondents (54%) say they only have traditional subscriptions to streaming platforms that offer video or audio content. Streaming became increasingly popular during the COVID-19 pandemic, particularly during cycles of lockdown.33% of survey-takers say they either subscribe to ‘both traditional and non-traditional services’ (28%) or ‘only non-traditional subscription services’ (5%). The remainder of this article will mainly focus on this group of subscribers, which, combined, represents a third of the total respondents. This may prove more valuable and insightful for SME business owners instead of focusing on the more traditional competitive streaming giants like Netflix or Spotify.Popular types of subscription boxes and servicesCapterra’s survey found that a ‘box of products’, such as beauty (e.g. skincare) or food (e.g. meal deliveries) proves to be most popular for 53% of subscribers to non-traditional services. Subscription boxes are powerful eCommerce tools for SMEs because they keep customers engaged. Some companies select products on behalf of the consumer’s overall preferences, which creates an element of surprise and can be fun for recipients. The excitement of receiving a monthly box of goods is a great way to create an emotional and personal connection between the client and brand. A further 34% of these survey-takers subscribe and regularly receive ‘replenishments’, from the Dollar Shave Club, for example, whilst 34% subscribe to an online health and fitness platform, such as FitBit, MyFitnessPal, or Peloton.Fitness subscriptionsThe fitness industry is a dynamic part of Australia’s economy as Aussies spend an estimated $8.5 billion on fitness services and equipment annually. The pandemic saw gyms initially shut down, which led to the fitness industry going fully digital. It comes as no surprise that a third of survey respondents who subscribe to an online service or product use a health and fitness platform.More than a quarter (27%) of survey-takers said the main reason they joined a fitness platform was because it ‘started as a free trial’ before they subscribed. Other reasons include it being a recommendation (25%), the offer of a promotion or discount (17%), the convenience (16%), the flexibility to unsubscribe (7%), or respondents signing up out of curiosity (7%).As we have moved into the digital age, personal trainers may find it easier to manage their gym and client bookings through the use of fitness software. In addition, subscription management software enables companies to offer discount codes, flexible pricing plans, and free trials. Customers can suspend and pause subscriptions rather than cancel them altogether and can also refer a friend to receive a discount. This can help companies grow their customer base.Why some consumers resist signing up for subscription services altogetherCapterra’s survey had a small group of respondents (13%) who aren’t currently subscribed to any type of streaming service, subscription box, or platform. Two-thirds (67%) of survey-takers within this group said they have not signed up for these services in the past either. The main reasons given for this are:It is not worth the money (47%)They do not want any more fixed expenses (40%)There isn’t a subscription service that interests them (34%)The top two answers perhaps reflect the current economic situation in Australia as inflation rates rose by 6.1% in June 2022, leaving people paying more for food and fuel. This has undoubtedly meant that Australians are tightening their belts and reassessing their monthly outgoings. Companies need to demonstrate to potential customers that a subscription can actually make products more affordable. How much Australians spend on monthly subscription servicesAs mentioned previously, it is common for households to have more than one subscription service simultaneously. Given the current economic climate, we may assume that shoppers would opt to pay less. But it appears that most of Capterra’s survey-takers who subscribe to non-traditional services are surprisingly paying over $30 per month.A combined group of 51% of respondents are paying anywhere between $21 to more than $30, while only 6% are paying under $5. This could indicate the price point of the products being sold. 50% of subscribers said they prefer to pay for the most basic and cheapest subscription level. If consumers opt to pay for the basic plan, it could mean that the premium or deluxe plans are too expensive or the extra features simply aren’t worth it to the customer.29% of respondents said they prefer the premium subscription level, which often comes with more services. When it comes to setting subscription pricing, organisations can send out surveys and directly ask consumers for their feedback. Customer value changes over time, so it is important to regularly talk to shoppers and be wary of how their needs are evolving. Price optimisation software can help companies to get the right price point for their products and uses consumer history and predictive algorithms to determine suitable price recommendations.Subscription e-commerce services do often provide a low-cost way for consumers to buy what they need, thanks to deals and discounts that are available online. But research also shows that Australians waste an average of $200 a year on unused subscriptions or memberships. This may be due to falling into the ‘ subscription trap’ where the online retailer treats a single purchase or a free trial as consent for ongoing payment without the consumer realising it. Online retailers should make it very clear to shoppers about any automatic future payments to avoid damaging the consumer’s trust. But, this can undoubtedly be a cause of concern for customers. Consumer concern about storing credit card detailsThe majority of those who currently have subscription boxes or subscribe to an online platform use devices such as a smartphone (59%), computer (23%), or tablet (7%) to access the service. But using such technologies may present concerns and safety over privacy and personal data. In fact, over a quarter of survey-takers in this group (29%) do not feel comfortable registering their credit card details to their online accounts. ‘Security reasons’ (87%), ‘data protection issues’ (61%), and ‘spam’ (22%) were the three most selected answers by these respondents when asked the reasons why they didn’t feel comfortable saving their credit card details. Most organisations with a turnover of under $3 million are not required by the Privacy Act 1988 to have privacy policies such as the Australian Privacy Principles (APP) in place. But showing compliance can help reassure customers, and transparency about personal data practices is essential for gaining consumers’ trust.For consumers to feel more at ease, companies can display their privacy policies on their websites. They can also advise customers on how their personal information will be collected and stored before the consumer agrees to share it. A payment processing platform with advanced data security may help protect credit and debit card details and other personal information from potential threats. An eCommerce site can also implement 2-step verification, 2-factor authentication, or multi-factor authentication when the customer signs up and pays for their subscription boxes or services. The future of Australia’s subscription economyThe subscription economy continues to ride the eCommerce wave and is estimated to reach $275 billion globally in 2022. Capterra’s study found 71% of online consumers agree that companies will invest more in the business subscription model going forward.Subscription-based pricing is vital for attracting customers as it lowers the payment barrier for products and services. But pricing and payment plans will need to be flexible to adapt to the current economic climate. During times of uncertainty, consumers crave flexibility. Paying a monthly fee instead of an upfront lump sum makes expensive products more accessible and affordable even during an economic crisis. Subscription management software can also support businesses by enabling flexible billing options and promotion automation.The subscription economy does not look like it is slowing down in Australia, as 72% of survey-takers said they believe the subscription-based model will be an increasingly popular way to obtain products and services. For companies, it is an opportunity to build brand loyalty, focus on personalisation, and improve the customer experience. Ultimately, the subscription model can help smaller businesses gain new customers and increase revenue from existing ones. Looking for subscription management software? Browse our catalogue. ## Disclaimer > MethodologyTo collect the data for this report, we conducted an online survey in August 2022 with the participation of 1,000 respondents. The selection criteria for participants were as follows:Australian residentBetween the ages of 18 and 65Shops online more than once a month ## About the author ### Laura Burgess Laura is a Content Analyst at Capterra, researching and giving insight on tech trends to help SMEs. 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