Subscription Britain here to stay as benefits are realised

spotifyLockdown’s role in the rise of subscription Britain may have been well documented but it looks like being no flash in the pan, with nearly three-quarters of consumers who have signed up to new services saying they intend to extend their packages into the new year and beyond.

That is according to research by independent media agency The Kite Factory, carried out by YouGov, which also finds the number of new sign-ups is continuing to rise.

It reveals that almost 2 in 5 (37%) UK consumers have signed up to at least one new subscription service since the first lockdown in March and the prolonged Covid-19 measures are driving consumer loyalty, with nearly three quarters of new subscribers (72%) likely to continue.

The number of consumers who have signed up to physical subscription boxes jumped from 7.9 million to 8.2 million (+3.3%) from February to October 2020, with the largest growth in those aged over 55, up 74% from 590,000 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 the likes of Netflix and Amazon Prime Video since March.

Noticeable differences in purchasing behaviours were identified between generations; 18 to 24s were most likely to join a music streaming service, such as Spotify (41%) and 25 to 34s were twice as likely to add 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 who joined services such as food and drink boxes or education programmes, such as online language schools. And not a single pet owner who joined a petfood subscription services said they would be very likely to cancel in the next six months.

The study identified five key subscription audiences:

Tech Savvy researchers: Consisting of late Millennials and early GenXers, nearly half (46%) are aged between 25 and 44 and over index for women aged 35 to 44. This group see technology as a benefit to the way they live and are often early adopters of new technology services and apps.

Some 11% signed up to an education service in lockdown and 61% joined an online video streaming service, both possibly linked to children staying home from school. Over two-fifths (42%) say it is very likely they will continue subscribing in the next six months.

Subscription stackers: A younger, predominantly male audience, aged 25 to 44, over indexing for males aged 25 to 34. Many are pre-family (70% have no 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 but are comfortable living in minor debt. Many added one or two subscription services to their existing list with self-improvement on their agenda.

Some 8% signed up to educational and self-help services and 40% say it is very likely they will keep subscribing over the next six months.

Subscription switchers: 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, while 22% 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.

Financial Trackers: The oldest demographic with 44% of this segment aged over 55 and 29% 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% 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, 6% have already cancelled their lockdown subscription and a further 5% say it is very unlikely they will continue subscribing over the next six months.

Offer seekers: This audience is 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.

They also 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%) said they would continue subscribing to their lockdown subscription over the next six months.

Kite Factory managing director James Smith 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 has been 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.”

A separate study from Barclaycard Payments carried out in the summer showed that nearly two-thirds (65%) of UK homes now have on-demand services, and an average of seven contracts per household.

It went on to reveal that over a fifth (22%) of UK retailers had developed a subscription service or product during lockdown, adding to the three in ten (28%) who already offered these services beforehand.

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