There is little doubt that Covid-19 has fuelled a booming subscription economy in the UK, with two in five (37%) UK shoppers having signed up to at least one new subscription service during since March and almost three quarters of new subscribers (72%) saying they were likely to continue with that subscription post-lockdown.
In this tumultuous year, subscriptions meet all sorts of emotional needs, including security, reliability, entertainment and delight. Which is why – from video streaming services to vegetable boxes, flower deliveries to magazines – businesses are either establishing themselves with a subscription model or encouraging customers to switch to that method of purchase and payment.
This means the subscription market is becoming increasingly cluttered and despite a loyal customer base now, businesses must evolve if they are going to achieve longevity in the sector. Simply offering a service will no longer be sufficient, brands need to be solving a problem too – one that isn’t already being solved by competitors.
We know video streaming services are the most popular subscription service across all demographics, with three in five people signing up to a new service since lockdown. And while the original content currently differentiates these brands, the ability to solve a problem will allow them to stand the test of time, particularly if they consolidate in the future.
Covid-19 has forced many to go months without seeing loved ones but Amazon Prime and Hulu offer a solution through group streaming. Prime Video Watch Party and Hulu Watch Party allow people to virtually watch a film with a loved one thousands of miles away. Beyond this, these brands will be looking to fill future gaps in our lives with a more personalised, immersive or cinematic experience.
Ford sold its monthly vehicle subscription services last year and now identifies as a mobility company. It recognised the real value it provides customers is getting somebody from their bedroom to their workspace, and with the car subscription market ever more saturated, it was time to innovate. With a more climate conscious society, and fewer cars on the road, the car brand is thinking of the future of cities and planning to launch its self-driving commercial business in 2022.
Supermarkets are likely to buy out the direct to consumer operators and offer their own subscription services so we will see some big mergers and package deals in the next 10 years. Much like we have seen with Marks & Spencer and Ocado, supermarkets will be solving the problem of choice and offering their customers everything in one place, with less delivery waiting time and more variety.
And as the world becomes more environmentally conscious, delivery companies bringing products to our door will have to go carbon neutral or even carbon negative to remain relevant. We may also see an increase in “shopping local” and the introduction of ‘micro subscriptions services’ as many communities fight to save their high street shops and services, particularly since the pandemic.
The pandemic has demonstrated just how unpredictable the world can be and proves the need for brands to offer flexibility for customers joining, pausing and restarting subscriptions as products and services come in and out of relevance.
Gone are the days of making it difficult to leave a subscription – the future will require easy ways to manage a membership to suit the needs of the consumer, especially during times of recession.
But, however uncertain the next ten years may be, we know the customer appetite for subscriptions is there, it’s now up to businesses how they choose to innovate and achieve longevity in this market.
By Christian Taylor, Strategy Director
Article available via Decision Marketing