Subscribe & Save has multiple benefits for AMZN, as it increases user purchase frequency and Amazon’s share of wallet within the $285bn consumables (ex fresh) market. Subscribe & Save is also a form of behavior modification, as habitual subscription-based ordering has the potential to alter consumers’ traditional offline shopping behavior and traffic flow. Not surprisingly, the most penetrated categories so far are Grocery (~4%), Beauty (~1%), and Health & Personal Care (~1%).
Subscribe & Save is essentially Amazon’s version of automatic replenishment. It offers users discounted prices on select items (typically sold in bulk) when they choose to have them automatically replenished from Amazon.com at regular, pre-determined intervals (every 1, 2, 3, 4, 5, or 6 months, etc.) (see below). This service lends itself extremely well to consumables and products that people need with some regularity, such as cereal, laundry detergent, toothpaste, diapers, toilet paper and pet food.
Amazon’s ability to grow its share of consumables will be a big driver of this, as consumables make up almost 25% of Amazon’s total relevant consumer expenditure market for North America. 
Subscribe & Save is one method Amazon is using to get a bigger share of that pie. Amazon’s consumables opportunity is indeed large. Even excluding “fresh” consumable items, shows that Americans spend over 2X more on packaged consumables than they do on media products. The extent to which Amazon is able to increase users’ habitual Amazon ordering with Subscribe & Save can lead to more “add-on” purchases and impulse buys that users throw in their Amazon shopping cart. This has the potential to further Amazon’s share gains in other categories.
Amazon has Achieved Early Double-Digit SKU Penetration in Some Core Consumable Areas
Amazon already has some pockets of notable Subscribe & Save credibility. Consider Grocery and Gourmet Food. 3 of the 27 subcategories within this group (Pasta, Prepared Foods and Breakfast Foods) already have more than 10% of their SKUs eligible for Subscribe & Save. In addition, another 12 subcategories of items have Subscribe & Save penetration levels between 5% and 10%.
To us, these data underscore that Amazon is making progress with Subscribe & Save eligibility in some core consumables categories. They also speak to the opportunity for Amazon to continue to grow the service with higher penetration in other consumables categories.