Coronavirus outbreak provides catalyst for growth in subscription services

Boosted by the coronavirus lockdown, the UK subscription economy is now worth £323 million, with spending on such services increasing by 39.4% year-on-year in July, according to research from Barclaycard Payments.

This found that one in ten retailers launched their first sign-up service during lockdown, with a fifth looking to develop their offering in this space even as restrictions eased.

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, 87% think they allow their business to keep up with competitors as other brands launch similar products, and 82% agree a move into this area allows them to build customer relationships through increased contact.

Entertainment subscriptions are the most popular among Brits. Food and meal subscription services – such as wine tasting kits – are the second most adopted, while health, wellbeing and grooming services are also in demand.

Kirsty Morris, Managing Director for Account Development, Barclaycard Payments, says: “This is 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,” she concludes.