What is the cost of having what you want, when you want it? Whether it’s streaming music or video on demand or getting your favorite items delivered to you quickly, consumers are saying yes to subscriptions, despite their shrinking budgets. So what price can you put on convenience? As it turns out, it’s pretty high and most of us don’t even realize it.
84% of consumers significantly underestimate their monthly expenditures, according to new research by The Waterstone Group. The study involved an analysis of 2,500 budgets that included 21 categories of subscription service like mobile, Amazon Prime, WiFi, digital newspapers, subscription boxes and home security systems, among many others. The data showed that participants believed they were spending an average of $111.61 per month when in reality, they were spending an average of $237.33, more than double their estimate.
The fact that consumers underestimate what they spend is a huge windfall for subscription companies that rely on customers to make quick decisions. In fact, according to a survey by McKinsey & Company, the subscription e-commerce market is growing rapidly. In just the past five years, the market has grown by 100% each year. The streaming-media market has seen growth for a long time, and now there is noticeable growth for consumer goods subscriptions.
Although various studies show that American consumers have tighter budgets with less flexibility and less savings, the Waterstone study found that consumers are “happily hooked” on their subscription services. As the data illustrates, immediate gratification and convenience are extremely tempting. The challenge for consumers is to balance this with smart money living and long term financial security.
Fortunately, there are many companies, like Billshark with consumers’ interests in mind. If you want to lower your monthly cable, internet, wireless and home security bills without giving up any of the conveniences you currently enjoy, let our Sharks take a bite out of them. We’re confident that we can get you hooked on saving!