Despite lockdown restrictions easing across much of the UK, new research reveals the nation’s demand for subscriptions continues to grow, reaching a value of £395 million – up 23% in the past year.
The new research from Barclaycard Payments, which processes nearly half of the nation’s credit and debit card transactions, found that this increase coincides with a 16% rise in the number of shoppers signed up to subscriptions, and a 12% upsurge in annual expenditure per person for those signed up to the services (£552 to £620).
This rise coincides with a spike in new subscription offerings, with 83% of subscription-selling retailers launching an average of three new subscription products or services since the start of this year alone.
And it seems this trend is set to continue, with retailers projecting a further 30% growth for the subscription sector over the next 12 months.
These new products and services are in response to rising consumer demand as three quarters (75%) of retailers reported increased consumer interest during lockdown. Significantly, a similar number (71%) of those now offering subscriptions say doing so actually saved their business during the uncertain period.
Despite life easing into a ‘new normal’, retailers predict the digital and direct-to-door subscription sector will remain popular. In line with this optimism, more than a third (36%) of retailers, who haven’t provided these services before, are planning to launch a range of subscription services in time for Christmas.
Seven in 10 (72 %) businesses that offer subscriptions credited them for delivering a more reliable and predictable source of income, with the same amount (72%) saying they provide insight into consumer demands, meaning they can better tailor products to shoppers’ needs.
Supporting consumer research highlights the driving forces behind this surge in popularity. Convenience is key, with 50% of shoppers praising subscriptions for helping to organise their finances, and 55% saying they save them time by bringing products they need straight to their door. Six in 10 (57%) enjoy the exclusive access to content via subscriptions, while half (52%) rely on the quality recommendations on content or products offered by the subscription provider.
The most popular subscription services individuals sign up to are entertainment platforms (46%), food/meals boxes (16%), technology (14%) and beauty or grooming (12%).
Research from Barclaycard Payments also identified the factors most important for consumers when receiving subscription services:
|Good value||54 per cent|
|High quality products||46 per cent|
|Flexible contracts||36 per cent|
|Straight forward opt-out processes||33 per cent|
|Convenience||31 per cent|
Good value remains the factor customers most want to see (54%), with 45% even regularly comparing their services to ensure they’re getting a good deal.
Flexible contracts (36%) and straightforward opt-out processes (33%) are also key. Additionally, 41% of Brits who don’t have any subscriptions suggested that being locked into a contract was their main deterrence, preferring a no-strings-attached approach.
Marc Pettican, president of Barclaycard Payments, said: “Our second annual review of the subscription economy shows a sizeable growth of spending on these services over the past year, showcasing how important this revenue stream has become to retailers. While lockdown certainly provided a catalyst for their growth, our data shows the popularity of digital and direct-to-door sign-up services is here to stay.
“The ability to continue to launch new products and services at pace and under challenging circumstances is a clear testament to the adaptability and pragmatism of British retailers. As many retailers will continue enhancing their subscription offerings for the foreseeable future, we are committed to working closely with all our customers to ensure they have access to multi-channel payment capabilities and transaction processes, allowing them to remain nimble and keep up with consumer demand.”