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New Tracker: More Restaurants Embracing Subscriptions to Lock in Loyalty

Subscription commerce — already building before the pandemic — is a certified hit as we rapidly approach 2022. It takes many forms, from streaming entertainment to boxes of retail items. Yet food is panning out as a great subscription opportunity for consumers and businesses.

While citing the soaring financials recently released by Netflix, PYMNTS’ October 2021 Subscription Commerce Tracker®, produced in collaboration with Vindicia, states that “entertainment is just one avenue for subscriptions, however, and the popularity of the model has soared as consumers seek new ways to treat themselves. There is a subscription service for every wish, including beauty products, coffee, food, alcohol and even flowers.”

Focusing on food, the report notes that the pandemic “helped struggling products such as meal kits and direct-to-consumer (D2C) food subscription services, and now these sectors are finding their footing on a path to greater growth and innovation. Restaurants, which face even more competition coming out of the pandemic, are embracing the feature, as are supermarkets.”

Get the report: The Subscription Commerce Tracker®

Paid Loyalty Is Performing Well

Offering a genuine love connection with consumers via loyalty rewards, subscriptions are taking off in the restaurant sector big time, as consumers and restaurants recognize the value.

“Restaurants have become the latest entrants into the subscription services market in their aim to win greater loyalty among customers,” per the report. “Quick-service restaurant (QSR) Taco Bell has launched a new subscription feature at its locations in Tucson, Arizona, where customers can get one taco per day via the chain’s app for a monthly fee of between $5 and $30. The Taco Lover’s Pass is in play until Nov. 24 at participating locations.”

Observing that players from McDonald’s to Burger King and others have boarded the subscription train in some form, the October Subscription Commerce Tracker® points to “evidence that paid loyalty programs work, with one 2020 survey finding consumers 60% likelier to spend more on a brand after becoming subscribers. Free loyalty programs, by contrast, increase spending likelihood by less than one-third.”

Download: The Subscription Commerce Tracker®

Taco Bell Subscription Takes Flight, as Do Others

Finding that subscription commerce revenue “grew 41% in 2020 as consumers turned to subscriptions to fulfill daily needs of all types,” the latest Tracker delves into the trend.

Zipporah Allen, chief digital officer at Taco Bell, explained why the QSR chain is going big on subscriptions, as they see competitors from Panera Bread to Olive Garden all benefiting.

Taco Bell recently introduced Taco Lover’s Pass, “a trial subscription plan available through Nov. 24 at some locations in Tucson, Arizona. The 30-day trial allows customers to redeem one taco per day for a cost of $5 to $10 per pass, depending on the user’s location.”

As the Tracker states, “the subscription offering was designed to boost foot traffic and drive customer engagement as the QSR sector undergoes an accelerated digital transformation. The pass aims to reward Taco Bell’s most loyal diners and meet the needs of customers who seek personalized, exclusive digital brand experiences.”

The fact that QSRs and others are moving into subscriptions comes as no surprise. The latest Tracker cites a report finding that “subscription commerce sales grew 41% [in 2020], and it predicts they will exceed $27 billion by the end of this year.”

See also: The Subscription Commerce Tracker®

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