We love subscriptions. From chipping away at the latest box set on our favourite streaming service, to unpacking the perfectly pre-portioned ingredients in this week’s recipe box, our love of all contracts rolling has been steadily growing in popularity over the past couple of years. Then lockdown happened – and the rest, as they say, is history…
What the figures say
The latest research from Barclaycard has revealed that the subscription economy increased by an astonishing 39.4 per cent year-on-year in July – and is now worth a cool £323m.
We have previously reported on the trend for weird and wonderful purchases made during lockdown (antique diving suit, anyone?), as well as the range of creative ‘insperiences’ people have been having at home. Nailing the surprise and delight factor, subscription services are another convenient and fun way to enhance the at-home experience. Two-thirds of UK homes are currently signed up to some form of subscription service (65%), with an average of seven contracts per household.
Our love of subscription services means we are willing to shell out on a monthly basis, with individuals spending £46 on average per month – that’s £552 per year. Men are willing to pay more with an average spend of £57 each month (£684 a year) compared to women who are parting with a more restrained £35 (£420 a year).
Retailers are rising to the challenge, looking to cash in on this growing trend; one in ten have launched their first sign-up service during lockdown, with a fifth still intending to push forward with developing their subscriptions despite the easing of restrictions.
Lockdown as a catalyst
While many sectors have faced challenges serving their customers during the pandemic, the subscription economy is already perfectly set up for a lockdown situation, giving people the things they need or want, direct to their door – all with little-to-no effort after set-up. This means reliable revenue for retailers, offering some much-desired predictability on the current economic rollercoaster.
As a result, many businesses are embracing subscription business models, with new services covering everything from gaming to coffee subscription services, where £20 a month can get you up to five barista-prepped drinks every day. Offering a service likes this gives lunch and coffee shops a chance to win back some business lost during the pandemic as regular office worker customers set up shop at home.
While retailers are rising to the challenge offering monthly options, consumers are also showing the love for subscription services. Customers said “exclusive content” was one of the #1 reasons (53 per cent) for signing up – it seems we can’t say no to those must-watch movies and must-listen albums. “Convenience” matches exclusivity at 53 per cent. The discovery of new brands or products is also popular with 51 per cent specifying it as a reason for signing up.
Many of us have also discovered our generous side, with 44 per cent treating friends and family members to a subscription as the gift that keeps on giving.
What are we subscribing to?
Unsurprisingly, maybe thanks to the exclusive streaming content, subscriptions have been the most popular with UK consumers. With many activities limited, streaming services have been the heart and soul of lockdown life – as we bonded with friends and families over dissecting shows like The Tiger King, Outlander, and The Mandalorian.
While restaurants were out, takeaways were most definitely in – with food and drink subscriptions second on the list. Letterbox food deliveries may not have appealed as much before, but according to Mindful Chef, 70 per cent of customers are planning to continue to subscribe as lockdown eases. Add a virtual wine tasting session and you’ve got yourself a decent night in.
Many of us made the most of our one hour of daily exercise in the early days of lockdown, and it seems as though this kick-started a wellbeing trend – beauty and grooming, health and fitness are fourth, fifth, and sixth on the list of most popular subscription services respectively.
There are a few quirky and quaint options available too – as identified by the Evening Standard, more unusual subscriptions include stationery, cat litter, Japanese snack boxes and newspapers focusing on only the good news in the world. And why must Santa only visit once a year? With Christmas Club, a box of festive goodies can arrive every four weeks – whether it’s December or the height of summer.
Advice for brands
Kirsty Morris, Managing Director for Account Development, Barclaycard Payments, said, “Subscription services provide an exciting opportunity to engage consumers with products and services at home, whether that’s digital content or streaming services, meal kits, or more personalised offerings such as bespoke alcohol kits or on-demand exercise classes. For many retailers this has meant adapting quickly to offer new products and services to respond to the growing demand.
“Over the past few months we’ve been helping our customers take advantage of the subscription economy by ensuring they are set up to maximise sales. Some of our bricks and mortar retailers have started to accept online payments for the first time while our established multi-channel merchants have been keen to improve their payment capabilities to process transactions across a range of platforms. While lockdown certainly provided a catalyst for the growth in subscriptions, our data shows the popularity of direct-to-door and at-home products and services is only set to continue.”
UK businesses are beginning to understand that we may not be heading back to business-as-usual completely anytime in the immediate future. As consumers become accustomed to the convenience of subscription services delivered to the doorstep and the ease and seamlessness in the way we shop and consume content, we can look forward to seeing what ingenious offerings brands come up with in the months and years to come.
How many subscription services are you signed up for – are there any strange ones in there?