Americans Spending $430 More a Year on Subscription Services
With many Americans spending a lot of time “nesting” during the COVID-19 pandemic — putting a record amount of money online toward home furnishings and staying glued to their devices — it’s no surprise that they’re tossing more dough toward subscription services.
A new survey from Chicago-based business and technology consulting firm West Monroe reveals that consumers increased their average monthly spending on subscriptions — from meal services to subscription boxes to wellness apps and TV and movie streaming services — by 15% since 2018.
Majority of consumers spend on mobile phone services
U.S. consumers are spending on all sorts of subscriptions. In the past few years, subscription services have taken off, from dating and book services to fashion boxes and wellness apps. While the West Monroe survey compares spending levels in 2018 to 2021, some of these services skyrocketed during the pandemic.
Survey respondents were asked about subscriptions across 21 spending categories. In 2021, the top subscription services are:
- Mobile phone services (77%)
- Home Wi-Fi (74%)
- TV and movie services (68%)
- Amazon Prime (48%)
- Music streaming (31%)
- Gaming services (18%)
- Cloud storage (13%)
While most consumers are spending on mobile phone services, the average amount they spend monthly has been cut in half from 2018 — $100 to $50. Consumer spending on music streaming, gaming services and cloud storage also dropped by 50% in 2021 compared to 2018.
Largest chunk of spending going toward Amazon Prime
Of the subscription services getting the largest cash infusion, Amazon Prime tops the list, with Americans spending $99 a month on the product. That’s followed by:
- Home Wi-Fi ($50)
- Mobile phone services ($50)
- Meal services ($40)
- Lifestyle subscription boxes ($40)
Among all categories, spending on lifestyle subscription boxes experienced the biggest increase from 2018 to 2021 — 300%, from $10 a month to $40. On the flip side, diet/fitness apps and home security systems saw the largest dip from 2018 to 2021, going from $40 a month to $10.
Consumers missing the mark on how much they’re spending
The West Monroe survey finds that Americans spend $273 a month on subscription services in 2021, versus $237 in 2018. That equates to a 15% increase, or $430 more a year. But 100% of respondents are unaware of how much they actually spend.
When asked to gauge how much they spend each month on subscriptions in 2021, two-thirds (66%) of survey respondents were off by more than $200 on their estimates, versus 24% in 2018.
Further, 89% underestimate how much they’re spending. Here’s how much they were off by in 2021:
- Less than 25% (6%)
- $25 to $99 (18%)
- $100 to $199 (24%)
- $200 to $299 (21%)
- $300 to $399 (12%)
- More than $400 (13%)
Those concerned about whether they’re spending more on subscription services than they can afford should take inventory and see where they can cut back.
Consumers can sign up for alerts on their credit cards to track purchases. To minimize credit card debt, aim to pay off the balance each month and not miss any payments.
Methodology: West Monroe surveyed 2,500 U.S. consumers in June 2021 as a follow-up to the same topic in 2018.