Some 58 million UK shoppers now subscribe to services – including buying groceries, as well as entertainments and software – instead of making one-off purchases.
So finds a study by Zuora, Inc., a leading SaaS provider of subscription solutions in partnership with YouGov. ‘A Nation Subscribed,’ reveals that nine in 10 Brits choose to subscribe to their favourite stores, brands and services instead of purchasing them on a ‘one-off’ basis, demonstrating an 11% uplift from the previous year’s results.
The uptick in adoption has driven the UK adult population to spend on average £56 per month on subscription services, with 35 – 54-year-olds spending the most at £62 every month. Last year’s report found that the average UK adult spends approximately £18.49 per month on subscription services seeing the average monthly spend effectively triple in the past year.
The rise in subscriptions can be attributed to an increase in the number of businesses across nearly all industries offering recurring services. According to the Zuora Subscription Economy Index, this business model strategy has proved that subscription businesses grow revenue nearly nine times faster than the S&P 500.
The rise of mobile commerce is also playing a role, as it has become easier to sign up and register a card and then manage that service on the mobile, rather than having to enter lengthy strings of card numbers and more when trying to buy.
The shift towards apps is also helping drive the move in the retail sector, as well as across almost all other facets of commerce.
Subscriptions have moved beyond just media and entertainment consumption and have expanded to include grocery shopping services, attracting nearly 2 million consumers, in-car apps counting 650,000 subscribers in the UK, and beauty and grooming subscriptions like men’s shaving subscription service, Harry’s, with more than 1.3 million British monthly subscribers.
Dramatic growth of online data storage services like Google Drive and Dropbox with 7 million UK consumers. The healthcare sector is also experiencing the same shift with 12% of British adults choosing to pay monthly for prescriptions and private healthcare services.
And this trend is set to continue along its growth trajectory as an estimated 25% of UK adults predict that they will be subscribing to more services over the next five years.
“Nearly all of the British population is part of the Subscription Economy. From heating to healthcare, Zuora’s new study proves that the subscription-business model has gone mainstream and consumers have bought into recurring payments,” says Zuora’s VP EMEA, John Phillips. “The only way businesses can sustainably maintain relationships with consumers and grow is by moving away from their product-centric mentality and creating long-term brand affinity based around flexible subscription-based services.”
The full results of the YouGov study are explored in full in a new Zuora report released today, “A Nation Subscribed: 2017 State of the UK Subscription Economy” and unveiled at Zuora’s annual Subscribed event in London. The report provides insight for UK companies in all industries about how they can shift and transform business models in line with consumers’ preference for on-demand, personalised, and subscription-based access to services.