Gen Z and Millennials: Shaping the subscription economy

The Minna Technologies consumer and business survey, in partnership with FT Strategies and conducted by Savanta, delves into these changes, revealing intriguing insights into usage patterns, spending habits, and subscription management.

The surge in subscription culture

The subscription economy has seen significantly higher usage patterns among Gen Z and Millennials, with 70% of 18-44s utilising subscriptions services. This is notably higher compared to 63% for those aged 45-64 and 55% for those aged 65 and older. Younger consumers also subscribe to more services, averaging 8.4 subscriptions for those aged 18-44, compared to 7.9 for the 65+ age group.

A larger proportion of consumers under 35 have increased their subscription spending in the last year compared to those aged 35 and above (42% vs 35% respectively). Conversely, half (47%) of older consumers tend to maintain their previous spending levels (vs 38% of those under 35.

This trend of higher spending among younger generations is driven by the digitalization of services catering to various needs. fostering greater financial commitments and highlighting the necessity for effective subscription management strategies.

Interestingly, while younger generations exhibit higher usage rates, they are more likely to share the cost of their subscriptions with family, friends, or employers. Just under half (46%) of 18-24-year-olds and two-thirds (65%) of 25-34-year-olds fully pay for their subscriptions, compared to the vast majority (80%) of consumers aged 35 and above.

Navigating the subscription maze

The average US consumer uses 8.2 subscriptions, with half (53%) managing them through various apps and websites, making subscription management complex and time-consuming. This complexity has spurred significant interest in apps that consolidate these services, with 73% of consumers expressing interest. Younger consumers aged 18-44 show even greater enthusiasm (80%) compared to their older counterparts (54% of those 65+).

Remarkably, younger consumers, especially those aged 18-24 are willing to go a step further by switching banks if it means gaining access to a consolidated subscription management tool. Just under half (45%) of consumers aged 18-44 would consider switching compared to 20% of those aged 45-64, and only 9% of those aged 65 and older.

Subscriptions, a lifestyle choice

For many, subscriptions are not just services but gateways to a desired lifestyle. Nearly half (47%) of consumers believe that subscriptions offer access to products, services, and a lifestyle they wouldn’t otherwise have. Additionally, 42% of consumers see their subscription choices as a marker of success.

Thriving in the subscription economy

Gen Z and Millennials represent a digitally savvy and attractive audience for subscription businesses. They actively seek services that align with their evolving preferences and lifestyles, emphasizing convenience and accessibility.

However, businesses must adapt their strategies to cater to both younger and older demographics to enhance customer lifetime value and ensure long-term success in the competitive subscription market.

Savanta can help you navigate these trends and unlock the full potential of your subscription offerings. By understanding and addressing the unique needs of these demographics, businesses can thrive in the dynamic subscription economy.

Contact our dedicated team, to learn more about how we can support your business in leveraging insights for strategic growth.