The subscription business model is growing in popularity. Subscription-box services are on the rise. More and more content publishers are trying to connect to fans and customers through a recurring revenue model. And the logical result of growth in subscriptions is growth in gift subscriptions.

FIRM FOUNDATIONAL FORECASTS

One good indicator for growth in subscriptions is holiday sales growth in general. And on that front, several credible forecasters are predicting robust sales growth this coming season. Here’s the National Retail Federation from last month, looking for 3.6% to 4.0% growth:

(Source: NRF)

Deloitte is forecasting a 4 to 4.5 percent increase in 2017 holiday sales compared with 2016. Moreover, the firm expects e-commerce to perform even better (up 18% to 21%!), and suggests that novel and unusual offerings have an edge:

• “Sentiment and spending indicators are firing on all cylinders, but the question is: How will retailers respond given the profound disruption across the industry?” said Rod Sides, vice chairman, Deloitte LLP and U.S. Retail and Distribution sector leader. “The good news is retail is thriving, and it is the proliferation of new, niche retailers that is resulting in share constantly changing hands. Consumers have unlimited alternatives and often bounce between brands, touchpoints, and influencers, making it more difficult for retailers to attract shoppers without some level of customization. These disruptive factors are likely to combine to create a highly competitive and promotional holiday season.

Those “new niche retailers” could well be offering subscription boxes and other services.

Citing extremely upbeat consumer confidence data, real estate research and service firm JLL predicts a robust 6% growth rate.

• “As we head into the holiday season, consumer confidence is the highest it’s been in nearly 17 years. We expect that holiday spending will mirror overall retail sales trends, and anticipate that sales growth could reach as much as a six percent jump due to favorable economic conditions and the strength of the labor market,” added Greg Maloney, CEO of JLL Retail.

That rosy outlook extends to gift memberships and subscriptions as well. Writing on Oct. 30 for WWD, Jim Fosina predicts a rosy future this Christmas season for subscription services:

• It’s likely that many of the best “deals” this year will not be individual-product based. It’s more likely that holiday gifts that will be on most wish lists will be a series of gift subscriptions for all those on our shopping lists. We will move away from providing the recipients on our holiday lists a gift card and rather provide them with a gift subscription, a gift that they will cherish because it provides them a service that makes their lives a bit easier.

Anecdotally, holiday gift lists this year often suggest giving subscriptions to streaming film services, luxury handbag clubs, wine and whiskey subscriptions, museum memberships, meal boxes, and baby gifts.

THE NUMBERS REVEALING SUBSCRIPTION SUCCESS

OK, let’s see if the data backs up those rosy forecasts. To start with, here’s some data to show that that beauty boxes are rising in popularity. And, according to Statista research conducted this year, a large majority of women — 61% in fact — think they make good gifts:

Millennial women especially think that beauty box subscriptions make great gifts — in fact, 74% of them do:

And Millennials in general are willing to put their money behind that idea. Hefty numbers of them not only think gift subscriptions are a nice idea, but they have spent their gift budgets on purchased them:

That’s 21 percent of Millennials who have bought wine-box and related gift subscriptions for others. In contrast, only 1% to 4% of Boomers have bought any kind of physical product subscriptions as gifts.

In general, there is decent demand for giving box subscriptions to others, in so far as about 15% of Americans have considered giving them as gifts:

That’s 11% of women and 18% of men across all age groups. However, that average 15% number masks an even wider range of variation. Support for giving box subscriptions changes dramatically when you look at giver’s age:

Boomers and Retirees very rarely even consider giving a gift box subscription. On the other hand, almost half of Millennials have gift boxes in mind. This seems to be a real point of differentiation among generations.

For a similar look at the same trend, take a look at this research on the demographic breakdown of those who have actually purchased (not just considered) online video subscriptions as gifts:

Here again, it is the Millennial cohort who are the most willing to open their wallets to buy subscriptions as gifts. So what is it about Millennials that makes them so open to giving subscriptions, compared with their elders? Well actually, it is not that boomers and retirees are opposed to gift subscriptions — they just hold no truck with those new-fangled box subscriptions and online video subscriptions. If you look at a more traditional gift subscription model, age does not matter. Take a look at the trends in giving good old print subscriptions as gifts:

There’s no difference among generations here! Everybody is equally willing to buy magazine and newspaper subscriptions — about 12% of all those polled have done so.

The data shows that Gen Xers and Boomers and Retirees are willing to give subscriptions — at least for products with which they feel comfortable, like magazines. How can the more innovative subscription companies — subscription boxes and online services, say — make headway among these demographics?

Before older customers will consider giving these to others, they need to be customers themselves. Since Millennials are very willing to give these gifts, market gift subscriptions as ideal presents for parents and grandparents. Maybe the older folks will be inspired to join and to give to others in 2018.

Cast marketing campaigns in terms that older customers understand. That wine box subscription may make more sense to an older demographic sold as the “wine of the month club.” Foster a sense of belonging: “This season, give the gift of membership.”

The easy gift card option is losing its luster. As people come to see gift cards as bland and impersonal, and especially with warnings about gift card scams, it may be that gift subscriptions can fill the fading gift card niche.

Insider Take

Current financial indicators and consumer research suggest that the coming holiday season will see significant growth over prior years. Moreover, online and non-traditional gifts seem like solid bets, especially for Millennials and other younger demographics. In this economy, it does indeed look like a good year for giving subscriptions as gifts.