Subscription Services

May 2018

Subscription services – ranging from delivery subscriptions, added extras from retailers to regular boxes filled with goodies – have taken the country by storm. And it’s easy to see why, with these services offering convenience and often the chance to save money.

But as delivery management specialists we wanted to dig a little deeper into the phenomenon, which is why we conducted a comprehensive survey involving 1,000 members of the British public.

The findings give plenty of insight into the subscription services that people most often opt for and their reasons for choosing them. Along with this, we looked at delivery services that people would like to see in the future – which may be of particular interest to business owners. The

Most Popular Subscription Services

Overall, Brits spend an average of £2bn a year on subscription services. And the most popular choice, according to our survey, is Amazon Prime, garnering 61.4% of the vote with its seemingly unbeatable combination of expedited delivery and multimedia entertainment.  

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However, the next most popular choice, Graze (12.3%), suggests that people also like receiving tasty yet healthy treats at home. Perhaps they wash these down with a cuppa from the London Tea Club (chosen by 7.6% of respondents) or an espresso from Pact Coffee (8.5%)? 

Clothing also features strongly on the list, with nextunlimited (9.7%) and ASOS Premier (8.8%) both occupying top-five positions.

Finally, it is worth noting that alcohol has plenty of fans when it comes to regular home delivery, with Tipple Box (7.4%) and the Craft Gin Club (6.4%) both receiving strong support.  

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The Popularity of Subscription Services

The average spend on delivery subscriptions between men and women spend is around £60 a year, but it would seem that men are the biggest spenders overall. In fact, 1.5m British men spend over £300 a year on subscriptions.

Those in the 45-54 age group are most likely to spend over £300 a year on subscriptions. While one in three people in the 25-34 age group refuse to shop with retailers that they don’t have a subscription with – suggesting perhaps that subscriptions are a good way of ensuring customer loyalty.

The Cities that Subscribe the Most  

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The biggest fans of subscriptions are the residents of Birmingham, spending on average £18m a year. One in three residents of this city are even signed up to subscription services that they no longer use.

The inhabitants of Sheffield are perhaps the most health conscious, with 25% subscribing to Graze Box and almost 10% signed up to Vegan Kind. Liverpudlians favour floral subscription services while almost a fifth (17.8%) of those in Cardiff enjoy a gin subscription box.

Reasons for Subscribing

When it comes to why we sign up for subscription services the clear winner is value for money (60.2%). This makes sense considering that people claim to save on average £165 a year by signing up for services such as Amazon Prime.

The second most popular choice is convenience, with just under half of respondents (45%) choosing this option. And who can blame them, when they have their favourite books, snacks or drinks delivered to their doorsteps?

Almost one in three Brits (30.4%) sign up to services such as Amazon Prime for added benefits such as discounts and services from the provider. While about one in five of us (18.6%) simply enjoy the novelty of receiving products through the post. 

Hectic lifestyles mean consumers want more quality products easily accessed at their fingertips so it’s hardly surprising that companies like Just Eat and Deliveroo are also making the most of demand by satisfying food appetites with restaurant quality food delivered to your door in minutes. Deliveroo has even launched a Deliveroo Plus subscription service designed to save regular customers cash on delivery.

Carl Thompson of Hawkins & Shepherd, a British hand crafted shirt retailer who do a monthly subscription service of a new shirt per month, said:

“Since launching our subscription service in 2016, we have experienced steady growth in the UK around this model. Of our subscription customers around 37% have made additional purchases on the website outside of the subscription.

“Subscription services are becoming more and more part of the busy male lifestyle, so we wanted to offer our customers convenience. But more than this, some of our subscription options allow customers to split payments over months, making our handmade shirts more affordable.”

International Access

Smaller businesses are also making the most of opportunities to reach international markets with their products. Kirsten Clark runs popular crafting site Make & Do, and offers a monthly craft-themed subscription box, said:

“Being willing to send abroad is a great way of reaching more people. There are implications relating to insurance, product requirements in different countries and a small increase in missing parcels, but I love that I send parcels of fabrics all over the world and that everyone (no matter how far apart) gets a shared experience.”

Are They Worthwhile for Businesses?

For companies considering offering subscriptions, it might be reassuring to know that 48.9% of Brits admitted to regularly buying products they wouldn’t have purchased without the subscription. Those in the 18-24 age range are the biggest additional spenders, with 60% admitting to this, while only 30.3% of 65+ respondents would do the same.  

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The Future of Subscriptions

The popularity of subscription services looks to remain bright for consumers and retailers alike. With small UK businesses capitalising on international markets, the opportunities for businesses to expand their customer base both in the UK and abroad is possible. Retailers must keep their finger on the pulse though and ensure they are offering a competitive experience that combines value for money and convenience as these are the key consumer drivers for subscriptions.

Looking for support for your subscription service

If you would like to know more about our subscription fulfilment services or our managed parcel delivery service, get in touch and one of our experts will help you understand how we can support your business. 

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