New research by independent media agency The Kite Factory and YouGov finds almost two in five (37%) UK consumers signed up to at least one new subscription service during lockdown (since 23 March 2020). And the prolonged lockdown measures are driving consumer loyalty with nearly three quarters of new subscribers (72%) likely to continue. According to YouGov, consumers who are signed up to physical subscription boxes jumped from 7.9m to 8.2m (+3.3%) from Feb to Oct 2020. The largest growth was in those over 55 up 74% from 590k to 1 million. The nationally representative survey of 2,141 consumers revealed that video streaming services were most popular across all demographics with three in five consumers signing-up to a new video streaming service since lockdown.
Noticeable differences in purchasing behaviours were identified between generations with 18-24s the most likely to sign up to a music streaming service (41 percent) and 25-34s twice as likely to sign up to fitness, health and wellbeing services. Newspapers and magazines proved most popular with over 55s. Those who signed up to magazines and music streaming services were much more likely to continue subscribing than those that signed up to services such as food & drink boxes or education services such as online language schools. And pet owners who love the newfound convenience of pet food subscription services resulted in none of them (0%) saying they would be very likely to cancel in the next six months.
James Smith, managing director, The Kite Factory, said: “These findings are hugely encouraging for brands already offering subscription services and may offer hope to those that are considering it. The second lockdown will be another huge challenge for the retail and hospitality sectors but offering a subscription service could help mitigate losses by tapping into these audiences engaging in subscription culture. Our new insight into the different subscriber attitudes will help brands looking to dip their toe into subscription services better identify how best to reach them.”
The study identified five key subscription audiences:
Tech Savvy researchers:
Consisting of late millennials and early Gen-X, 46 percent are between 25 to 44 and over index for women aged 35-44. This group see technology as a benefit to the way they live and are often early adopters of new technology services and apps.
- 11 percent signed up to an education service in lockdown and 61 percent signed up to an online video streaming service, both possibly linked to children staying home from school.
- 42 percent say it is very likely they will continue subscribing in the next six months.
A younger, male audience aged 25-44, over indexing for males aged 25-34. Many are pre-family (70 percent without children) and household incomes average at around £40,000 a year. Two thirds prefer to buy things online rather than in-store and two in five are willing to pay more for luxury brands. This group are more into gaming and technology than sports. Many admit struggling to manage their personal finances and are likely to buy things on impulse. They’re comfortable living in minor debt. Many added one or two subscription services to their existing list with self-improvement on their agenda.
- Eight percent signed up to educational and self-help services.
- 40 percent say it is very likely they will keep subscribing over the next six months.
A female audience living in middle income households predominantly outside of city centres. They value meaningful brands over luxury, and many signed up to several subscriptions in lockdown.
- One in ten signed up to pet subscription products
- 22 percent signed up to a new magazine subscription
- This demographic is the most likely to say they will remain subscribed to their lockdown subscription for the next six months.
The oldest demographic with 44 percent over 55 and 29 percent currently retired (although there are also a portion of full-time students that fall into this attitudinal segment). Most consider themselves financially secure and nearly all have a wary outlook on fraud – 97 percent regularly check their bank and credit card statements for suspicious activity. This group will switch brands for speed and convenience, and they are happy to pay more for good quality. They trialled food and drink boxes during lockdown and one in five signed up to a new magazine subscription.
- The least loyal audience, six percent have already cancelled their lockdown subscription and a further five percent say it is very unlikely they will continue subscribing over the next six months.
This audience are looking for a short-term offer and will cancel any ongoing payments at full price. Made up of individuals with lower household incomes including students and low-income families, this audience is most likely to sign up to food and drink boxes such as Oddbox or Naked wines, music streaming, beauty, or grooming products. This audience signed up to the greatest number of subscriptions of all audiences and are hard to avoid for brands promoting free trials or discounts as they pride themselves on their ability to seek out offers online.
- Two in three (68 percent said they would continue subscribing to their lockdown subscription over the next six months.