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Retail subscriptions jump 50% in lockdown with food boxes, wine and grooming leading the way

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The lockdown has fuelled a boom in retail subscription services, with research showing that UK consumers now have an average of seven per household and spend around £46 a month – £552 a year – on subs.

As a result, around a fifth of UK retailers have launched subscription services during lockdown, bolstering the 30% of retailers that already had them in place.

Entertainment subscriptions led the way, providing a key at-home pastime when outdoor entertainment options have been limited. However, food and meal subscription services – such as wine tasting kits and meal boxes – are the second most adopted, while health, wellbeing and grooming services are also on-trend.

So finds research by Barclaycard, which goes on to say that eight in 10 (82%) retailers believe the popularity of subscription services increased during lockdown as shoppers took advantage of safe and convenient ways to receive everything from essential items, such as groceries, through to entertainment into their homes.

During April – so far the 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 very first subscription service between March and June 2020.

Reliable revenue for retailers

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. 82% say that 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%). More than four in ten (44%) also say they make great presents.

Kirsty Morris, Managing Director for Account Development, Barclaycard Payments, says: “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.”

She adds: “Over the past few months we’ve been helping our customers take advantage of the subscription economy by ensuring they are set up to maximise sales. Some of our bricks and mortar retailers have started to accept online payments for the first time while our established multi-channel merchants have been keen to improve their payment capabilities to process transactions across a range of platforms. 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.” 

Mary Portas, campaign spokesperson, comments: “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.”

She concludes: “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.” 

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