Subscriptions have always been something of a Holy Grail for retailers in their promise of regular, predictable income. Two-thirds of consumers (77%) have between one and four subscriptions, with 77% stating that they’ve got the right amount, according to Recurly’s State of Subscriptions report 2026.
Despite this, “subscription fatigue” is real. General consumer fatigue metrics hover at around 41%, as consumers become overwhelmed by the number of subscriptions they have and more sceptical about the value of the propositions.
This has led to customer acquisition slowing down as consumers become more intentional with how they spend on subscriptions, pushing retailers to focus more on retention than acquisition. As building loyalty becomes central to the subscription proposition, the distinction between traditional subscription models and membership schemes is becoming increasingly blurred.
The difference between subscriptions and memberships
Subscriptions are typically transactional – the retailer is selling a product or service for which the consumer pays on a monthly or annual basis. Memberships, however, promise exclusivity and a sense of belonging. The relationship between retailer and consumer is not purely transactional; the customer benefits from a range of membership perks, as well as being part of a wider ecosystem with the opportunity to interact with other members, while the retailer benefits from the increased engagement and loyalty this brings.
Costco is an example of a retailer whose business model is based on a membership scheme. The membership is effectively the product; members pay an annual fee to shop there and bulk-buy products at warehouse prices. They also have access to other services including travel, insurance and optical centres (market-dependent).
Other retailers offer free membership schemes, aimed at building engagement and loyalty rather than driving direct revenue. IKEA is an example of this; its IKEA Family scheme offers members exclusive prices on certain products, special discounts and offers, exclusive invitations and events, and free in-store perks such as hot drinks. IKEA explicitly calls this a membership scheme rather than a loyalty scheme, and the terminology is important: “Family” implies community and relationship rather than transaction. This fits neatly with IKEA’s brand image as a family home store.
The rise of hybrid models
But as retailers focus on retaining the customers they’ve worked hard to acquire, there’s been a recognition that sustained engagement is key to generating recurring revenue. As such, the most successful membership/loyalty/subscription schemes are those that create an ongoing relationship with customers, rather than simply automating repeat purchases.
Beauty Pie is an example of a retailer that combines elements of all three. Beauty boxes are a classic subscription package, but instead of selling subscriptions, Beauty Pie sells membership on a tiered basis. The standard Beauty Pie+ membership costs £59 a year in the UK, although it’s also available at £10 a month for those who don’t want to commit to an annual amount. Members benefit from a 25% discount on every order purchased, free shipping offers and exclusive member perks. They also enjoy the flexibility of being able to order what they want, when they want.
This is happening in other sectors of retail, too. Amazon and Tesco customers pay a recurring fee, creating predictable revenue streams for the retailer, but in return they receive a package of benefits rather than a specific product. In all these cases, the value lies not in regular deliveries but in access, convenience and exclusivity.
The distinction between subscriptions and memberships remains important, but the gap between them is narrowing. Ultimately, retailers are discovering that recurring revenue is a by-product of recurring engagement. The programmes proving most successful are those that give customers an ongoing reason to return, whether through products, perks, savings or a sense of belonging.
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