Lockdown fuels ‘Subscription Society’ as Brits spend £552 a year on sign-up services

From meal kit deliveries to entertainment platforms, new research reveals the UK is a ‘Subscription Society’, with the growing subscription economy currently worth £323 million.

The research from Barclaycard Payments, which processes nearly half of the nation’s credit and debit card transactions, found that two thirds (65 per cent) of UK homes are signed up to regular subscription services, with an average of seven contracts per household.

The steady rise in popularity has led over a fifth (22 per cent) of UK retailers to develop a subscription service or product during lockdown, adding to the three in ten (28 per cent) who already offered these services beforehand. Individually Brits spend an average of £46 per month on subscriptions (£552 per year); while men top the list of super subscribers, forking out an average of £57 each month (£684 a year), compared to £35 (£420 a year) for women.

This research is supported by Barclaycard consumer spending data, which shows that spending on digital and subscription services has increased consistently throughout each month in 2020, jumping by 39.4 per cent year-on-year in July.

Lockdown as a catalyst

Eight in 10 (82 per cent) retailers believe the popularity of subscription services increased during lockdown as Brits 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 per cent year-on-year, showing Brits relied on this model during the extended time spent at home. Seeking to maximise this growing revenue stream, 10 per cent of retailers launched their very first subscription service between March and June 2020.

Reliable revenue for retailers

In these uncertain times, 75 per cent 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 per cent) think subscription services allow their business to keep up with competitors as other brands launch similar products, and 82 per cent agree subscription services allow them to build customer relationships through increased contact.

Content still drives the subscriptions trend 

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

 Top 10 subscription services

The top reasons consumers cited for signing up to subscriptions were exclusive content (53 per cent), convenience (53 per cent), a personalised offering (48 per cent), and the discovery of new brands or products (51 per cent). More than four in ten (44 per cent) also say they make great presents.

Kirsty Morris, managing director for account development, Barclaycard Payments, said, “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.

“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, said, “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.

“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.”