The growing importance of subscription services to the UK retail market is shown in new figures out today that suggest British customers are collectively spending north of £2bn a year on regular deliveries of goods from snacks and drinks to beauty products.
Almost two thirds (61.4%) of 1,000 people questioned in the Subscription Services survey carried out for delivery management company Whistl said they had an Amazon Prime subscription – which offers free deliveries as well as a range of benefits including video and music streaming – while one in 10 now subscribe to a healthy snack service such as that of Graze (pictured), to which 12.3% of respondents were signed up. Other popular services include nextunlimited (9.7%) and Asos Premier (8.8%), which both offer free deliveries and returns for a single annual payment, Pact Coffee (8.5% and Glossy box (7.8%), which both offer regular deliveries within their category.
Sign-ups are driven by convenience (45%) and value for money (60%) – the average Amazon Prime user said the service saved them £165 a year – but one in five said they did not use the benefits that come with the service. A further one in five said they would refuse to shop with a retailer that did not offer a subscription service, while 48.9% said they had bought items through a subscription that they would not otherwise have bought.
Carl Thompson of Hawkins & Shepherd, which offers a monthly shirt delivery, says the company has seen steady growth since introducing its subscription model, with around 37% of subscribers making extra purchases on its website outside of their subscription. “Subscription services are becoming more and more part of the busy male lifestyle, so we wanted to offer our customers convenience,” he said. “But more than this, some of our subscription options allow customers to split payments over months, making our handmade shirts more affordable.”
Melanie Darvall, director of marketing and communications at Whistl, said: “It’s great to see the popularity in monthly subscription services and how they are benefitting both businesses of all sizes and the customers who sign up to them.
“It seems the key to making your subscription service a success is finding the balance and making your offering beneficial for both parties. Ensuring the quality of product or value of discount is high enough to make your customer base loyal and consider spending money outside of what is essentially a monthly ’taster’ service can certainly be a challenge but once you’ve cracked that side of things you’ll reap the rewards and hopefully retain a happy customer base.”
Image courtesy of Graze