With more households signing up to streaming services like Netflix and ordering in meal kits during lockdown, Britain is now being dubbed a ‘subscription society.’
Households now typically spend £552 a year on sign-up services, new data has revealed.
The subscription economy has grown to be worth £323million, according to research from Barclaycard Payments, with an increase in businesses adopting the model.
Some 65 per cent of homes are signed up to regular subscription services, with an average of seven contracts per household.
Streaming services are becoming an increasingly popular subscription for households to have
The research surveyed retailers and consumers on the growing reliance on digital and direct-to-door subscriptions.
It found that the steady rise in popularity has led to 22 per cent of UK retailers to develop a subscription service or product during lockdown, adding to the 28 per cent who already offered these services beforehand.
It is no surprise firms are jumping on the bandwagon with spending on digital and subscription services increasing by 39.4 per cent year-on-year in July.
The research found that Britons spend an average of £46 per month on subscriptions.
Entertainment subscriptions are the most popular, providing a key at-home activity when options elsewhere have been limited.
Food and meal subscription services – such as wine tasting kits – are the second most adopted, while health, wellbeing and grooming services are also on-trend.
|9||Arts and crafts|
|10||Snacks and treats|
|Source: Barclaycard Payments|
Arts and crafts, books and alcoholic drinks also made the top ten.
Men topped the list of subscribers, forking out an average of £57 each month – equivalent to £684 a year – compared to £35 – £420 a year – for women.
Some 82 per cent of retailers believe the popularity of subscription services increased during lockdown as Britons took advantage of safe and convenient ways to receive everything from essential items such as groceries, through to entertainment into their homes.
During April, when the country was in full lockdown, the amount spent on digital content and subscription services increased by 50.2 per cent year-on-year, showing a reliance on this model during the extended time spent at home.
Seeking to maximise this growing revenue stream, 10 per cent of retailers launched their very first subscription service between March and June 2020.
In these uncertain times, 75 per cent of retailers believe subscription services offer a more reliable and predictable source of income than a one-time charge model.
Hello Fresh is a popular meal kit subscription service that comes with ingredients and recipes
Kirsty Morris of 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.
‘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.’
Another 87 per cent of retailers think subscription services allow their business to keep up with competitors as other brands launch similar products.
Some 82 per cent also agree these services allow them to build customer relationships through increased contact.
The top reasons consumers cited for signing up to subscriptions was exclusive content and convenience with 53 per cent both saying these features were important.
Some 48 per cent said a personalised offering was why they signed up and 51 per cent said the discovery of new brands or products was also important.
Mary Portas, campaign spokeswoman, added: ‘Subscriptions were already a vital tool for UK retailers prior to the pandemic, helping businesses to remain nimble and transport their product or experience direct to their customers’ homes.
‘Due to the prolonged period of lockdown, the public has grown accustomed to the range of products on offer, as well as the ease at which they can be regularly surprised and delighted by the brands they care about.
‘As a nation, we face the challenge of a lifetime, finding ourselves in a precarious position financially, staring into a recession and with many forecasting more difficult times to come.
‘We should remind ourselves that businesses in the UK have always been recognisable by their ingenuity and ability to pinpoint their customers’ needs.
‘Now, with many pivoting towards the subscription economy, we have further proof retailers are willing to try new things to find untapped revenue streams.’
Consumer figures are taken from a survey conducted from 1 to 3 June 2020 by Opinium on behalf of Barclaycard Payments, of over 2,000 UK adults.
Retailer figures are taken from a survey conducted on 27 May to 2 June 2020 by Opinium of over 400 senior decision-makers (director level and above) in retail businesses.