Eat, drink and give subscriptions: why retailers are shifting their payment models

The majority of us love the festive holidays – so why don’t we subscribe to it?

Oscar Wall of Recurly on why retailers should start thinking outside the box when it comes to giving consumers what they want.

I'm serious. Imagine a Christmas subscription – a monthly fixed payment leading up to the Christmas holidays – that provided access to services including entertainment, food and drink and gifts for family and friends. 

It’s not a new concept. The original Christmas Club started in 1909 in the US when the first Christmas savings fund was introduced. This special savings account, created by the Carlisle Trust Company of Carlisle, Pennsylvania, was designed to help people save for their holiday shopping. A month or so before the holidays, funds from the savings would be released in time for consumers to purchase their festive goods with special offers and discounts from a range of retailers.

The concept of the Christmas Club grew over the years and was adopted by UK companies looking for ways to tap into the huge market and help households share the costs of the festivities throughout the year – with plenty of TV ads on our screens before New Year’s Day and into January promoting the next campaign calling for households to sign up to special Christmas offers to save throughout the year.

The frugal holidays 

53% of Brits believe it will be a stressful Christmas this year due to the cost-of-living crisis. Inflation is at its highest, there are struggles with energy bills – and households are rightfully worrying about how they are going to afford it. With the average family Christmas costing £800, retailers should look at the subscription model to create more joy during December. 

Gift subscriptions 

It might feel odd to offer your loved one a subscription as a gift. But not only does it make sense – it is a twist on an old idea. 

Gift cards have been hugely popular over the years. Gift card sales totalled more than £4bn in 2012 and, following a decline, were on the up in 2021 during the pandemic. A subscription-based gift offering is the ideal way to spread costs. From streaming movies, membership to cooking classes online, language courses or even access to craft beers – there are a plethora of opportunities for brands to tap into.

Seasonal subscriptions are worth considering extending throughout the year. Long-term subscriptions are always important for continued revenue growth but short-term gifts are a chance to offer a service to new users who may not have subscribed if it wasn’t gifted. A recent survey* conducted by Recurly of 2,472 US consumers suggests that the top reasons consumers like receiving subscriptions as a gift is that it allows them to experience something new (60%) and there are a variety of carefully selected options to choose from (44%).

Subscription brands in particular have an enormous opportunity to capture consumer share of wallet this holiday season. The Recurly survey further reported that 63% of consumers say they would be interested in gifting a subscription, and 70% say they’d be happy to receive a subscription themselves. Gen Z and Millennials lead the charge with 72% interested in receiving subscriptions as gifts. Further reason for more variations in the standard monthly (or weekly?!) subscription model. 

Variable services and bundling

Many subscription service providers, including Netflix and Disney+, have reshaped their subscription models recently. Ad-driven tiered subscriptions offering varying services gives consumers the option to buy into what they need and what they can afford. There’s an argument to innovate and offer usage or value-based pricing to support households across the board, whether it’s a seasonal option or throughout the year. 

Bundling is also a viable alternative. Disney, Paramount and YouTube have been looking to ensnare new users and go old school with TV bundles – something that was popular in the the 90s and noughties. Pay a fixed fee each month and get access to a bundle of streaming platforms. Not only does it give households more options and a tailored experience, but it makes it easier for users to access their favourite content and services in one place through one simple payment. 

Entertainment, food and drink

According to a report last year, a typical household watches 62 hours of TV over the festive period, including six films, two full box sets and four festive specials. This amounts to almost four and a half hours every day between 20 December and 2 January. Safe to say, media entertainment is a big part of the holidays. And so is food and drink – Brits eat a staggering 217m portions of cheese during the holidays. So why not include that in a bundle with special food, drink and entertainment packages?

We’ve already seen the huge success from Amazon Prime’s tried-and-tested model – offering digital entertainment, goods and now fresh food with partnerships aligned with the likes of Morrisons. Others are quickly following suit – Paramount and Walmart recently teamed up with their Paramount+ Essential subscription in the US, offering a combination of streamed content and free shipping of goods for Walmart+ customers. Adding a “Christmas Club'' subscription model to your offering – perhaps in the shape of a variable service and variety of options – doesn’t represent a huge departure from this.

A positive experience

There are a number of ways brands and retailers can help households and grow business – but it’s vital to consider the customer experience and avoid dark patterns when it comes to subscriptions. Make it easy for consumers to sign up, pause or cancel, and you’ll create opportunities to upsell, decrease churn and increase net retention in the long run. 

Businesses based on a subscription model have boomed in recent years thanks to innovations in platforms, payment technology and customer self-serve features. Together, these advances have made it easier for product-based businesses to launch and manage direct-to-consumer (D2C) subscription-based operations embracing everything from streaming music to gin – the perfect gifts for Christmas.

Oscar Wall 

General Manager, EMEA


*About the Consumer and Subscriber Gifts for the Holiday Season survey.

The Consumer and Subscriber Gifts for the Holiday Season survey is based on findings of an internet-based survey conducted by Recurly on Sept. 8, 2022. The sample size included 2,472 Americans ages 18 and older that are planning to give gifts this holiday season.