The coronavirus lockdown has triggered a new surge in sign-ups for subscription services, with spending increasing throughout each month of 2020, with nearly two-thirds (65%) of UK homes now having on-demand services, and an average of seven contracts per household.
New research from Barclaycard Payments also reveals that entertainment subscriptions are the most popular, with food and meal services – such as wine tasting kits – being second most adopted, and health, well-being and grooming services also “on-trend”.
The steady rise in popularity has led over a fifth (22%) of UK retailers to develop a subscription service or product during lockdown, adding to the three in ten (28%) who already offered these services beforehand.
Individually, consumers spend an average of £46 a month on subscriptions (£552 a year); while men top the list of “super subscribers”, forking out an average of £57 a month (£684 a year), compared to £35 (£420 a year) for women.
Eight in ten (82%) retailers believe the popularity of subscription services increased during lockdown as consumers took advantage of safe and convenient ways to receive everything from essential items, such as groceries, through to entertainment into their homes.
During April – a core lockdown month – spend on digital content and subscription services increased by 50.2% year-on-year, showing consumers relied on this model during the extended time spent at home. Seeking to maximise this growing revenue stream, 10% of retailers launched their first subscription service between March and June 2020.
In these uncertain times, 75% of retailers believe subscription services offer a more reliable and predictable source of income than a one-time charge model.
In addition, almost nine in 10 (87%) think subscription services allow their business to keep up with competitors as other brands launch similar products, and 82% agree subscription services allow them to build customer relationships through increased contact.
The top reasons consumers cited for signing up to subscriptions were exclusive content (53%), convenience (53%), a personalised offering (48%), and the discovery of new brands or products (51%). Nearly half (44%) also say they make great presents.
Barclaycard Payments processes nearly half of the nation’s credit and debit card transactions. Managing director for account development Kirsty Morris said: “Subscription services provide an 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.”
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