Airlines, Restaurant Chains Jump On Subscription Bandwagon: WSJ

Yum! Brands, Inc YUM, Taco Bell, Sweetgreen Inc. SG, and Alaska Air Group Inc. ALK introduced or tested subscription programs in recent months, betting that customers will be intrigued by the chance to pay upfront for a taco a day, discounted salads and frequent flights, WSJ reports.

Subscriptions, once primarily evoked as a way to get magazines, newspapers, or milk delivered, have expanded in the internet era to offer everything from videogames to pet food. One attraction for brands is the chance to strengthen their direct relationships with consumers and lock in recurring revenue.

Taco Bell made its subscription club, called Taco Lover’s Pass, available nationwide in January. After testing prices of $5 and $10, the company charges $10 for a 30-day subscription that lets customers get a taco a day from a menu of seven options.

Taco Bell stated the program has a 21% renewal rate. “Consumers are showing us that they are interested in subscription models, as it eases decision-making,” Tracee Larocca, head of brand creative at the chain, told the WSJ.

Alaska Airlines in February began offering its Flight Pass subscription program for credits toward round-trip flights within California, between California and Nevada, or California and Arizona. The program appeals to college students and business travelers who know they need to fly and want to lock in rates, stated Andrew Harrison, executive vice president and chief commercial officer at Alaska Airlines.