58 million Brits are now subscribed to their favourite brands
89% of UK shoppers are members of the 'subscription economy', highlighting the opportunity for startups to sell directly to consumers on a monthly basis
58 million British consumers are now subscribed to at least one of their favourite brands, according to new research from Zuora.
Its A Nation Subscribed study has revealed that nine in 10 UK shoppers (or 89% of the adult population) choose to have one item of shopping delivered to their door on a repeated basis – rather than purchasing these products on a ‘once off'.
Signifying how start-ups could benefit from repeat custom if they offered such a model, Brits are spending 11% more on subscription services now than they were 12 months ago – with an average spend of £56 per month, increasing to £62 for 35 -54 year-olds.
Broken down by sector, there is a ‘stark' rise in the number of more conventional businesses adopting the subscription model.
Currently, 1.7 million people in the UK opt for subscription-based grocery shopping instead of the traditional weekly shop, with 600,000 having meal kits delivered to their door rather than buying individual ingredients.
The healthcare sector is also experiencing the same shift with 12% of UK adults choosing to pay monthly for prescriptions and private healthcare services, while over seven million UK tech consumers are now subscribed to data storage services like Google Drive and Dropbox.
Not just providing a more direct and frequent service, Zuora's Subscription Economy Index (SEI) also indicates that start-ups who adopt a subscription service model are growing at a faster rate than their more traditional counterparts.
According to the data, subscription businesses grew revenues roughly nine times faster than S&P 500 company revenues (15.2% versus 2.0%) from January 2012 to March 2017, while over the past six months, European subscription companies grew at an even faster rate of 22% YoY.
A sign the service is by no means on the way out, over a quarter of the UK population believe they will be using more subscription services in five years from now.
Thinking about starting your own subscription business? Take inspiration from these 10 subscription start-ups ‘delivering direct' to their customers:
- Beer 52: The craft beer subscription service was launched by James Brown when he was just 24
- BKD: Recently featured on Dragons' Den, the children's baking brand offers a monthly subscription of its creative baking kits. It secured £80,000 from Dragon Peter Jones
- Bloom & Wild: Having raised more than £7m to date, Bloom & Wild enables users to send freshly cut bouquets of flowers to their loved ones in a bespoke presentation box that fits through a letter box
- Cornerstone: The men’s grooming subscription service, which sells razors, shaving cream and aftershave balm, has over 145,000 subscribers in the UK
- Graze: Sends natural whole foods to its subscribers every month
- Mysteries in Time: An educational subscription designed to teach children history in a fun and creative way
- Stylus: Pairing a classic album on 12″ vinyl and a bottle of wine, each box also contains an independently commissioned piece of album art
- tails: The dog food subscription service tailor-makes food catering to each dog’s unique nutritional needs
- toucanBox: The craft box subscription service has delivered more than one million boxes to kids across the UK
- Tribe: The natural sports nutrition subscription service that has raised £1.75m via Crowdcube
John Phillips, VP EMEA at Zuora, said:
“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.
“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.”