Christmas Budgeting: Subscription Economy Tapping Consumer Sentiment

Subscriptions Tap Consumer Sentiment

Upgrade culture and personal financial control drive subscription services

With Christmas spending predicted to reach $58.8 billion this year and the subscription economy growing nearly six times (more than 435 per cent) over the past nine years, it’s increasingly likely consumers will use subscription services to access the products and lifestyle they want.

This change in consumer behaviour is occurring when many Australians are focused on saving money and looking for practical ways to acquire goods and services.

Subscription services are offering an increasing range of goods and services to meet consumer demand. Consumer research has identified high quality goods or services and a variety of items and experiences as the leading motivators for subscriber sign-ups and retention.

Snaffle chief marketing officer Paul Winslow says many people are facing financial uncertainty in the wake of the pandemic, which is one factor driving the growth of subscription services.

“A subscription’s set payments allow Australians to upgrade or replace goods at affordable prices without outlaying huge sums of cash, using a credit card, or relying on Buy Now Pay Later services,” says Paul Winslow. “With more and more people using services like Netflix and Spotify, it’s only natural for other goods and services to be made available through a subscription service.”

Below, Paul Winslow shares what potential subscribers should look for with any subscription service.

·    Lock-in contracts: Read the fine print and check if a subscription can lock you in for a longer-term than agreed. Be aware of legal and financial responsibilities at the end of the subscription term.

·    Hidden account and cancellation fees:  Hidden account fees can add to monthly subscription fees. Also check for any early cancellation fees and what they add to the cost of subscribed purchases.

·    Auto-renewals: Check whether any renewals are automatic. If yes, cancel your subscription well ahead of the auto-renewal date if you have decided not to continue.

·    Credit rating: Will the subscription affect your credit rating? Read the fine print to ensure your credit rating isn’t downgraded by a missed payment or monthly deduction.

Australia’s leading consumer leasing brand Snaffle has welcomed 64,000 new users since launching a new subscription purchase service in October. Since then, application approvals have grown by 45 per cent, and items per transaction have grown from 1.8 items to 2.46 items.

A Snaffle subscription sets a weekly wallet allowance to purchase from an extensive range of products at competitive prices. Snaffle determines a subscriber’s wallet size using its proprietary online application assessment tool, with an automated review process ensuring continued responsibility.

Winslow says 65 per cent of Snaffle Subscription applications have been approved to date, demonstrating the company’s commitment to responsible practice.