Average UK adult now spends more than £500 a year on subscription services

posted on Monday, 24th August 2020 by Steve May

Streaming  home cinema 

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The average adult in the UK spends more than £500 a year on subscription services, a study of 1,000 consumers has determined.

Two thirds of UK homes are currently signed up to regular subscription services, with an average of seven contracts per household.

Each month, Brits spend an average of £46 on entertainment subscriptions, as well as others such as food and meals and grooming services, totalling £552 per year.

The research, by Barclaycard Payments, discovered that men top the list of super subscribers, forking out an average of £57, each month or £684 a year, 63 per cent more than the £35 a month or £420 a year spent by women.

Spending data released by the credit card company revealed that digital and subscription services increased consistently throughout each month in 2020, jumping by 39.4 per cent year-on-year in July, to an estimated total value of £323 million.

The study, which also polled 500 retailers, revealed that the rise in popularity has led to 22 per cent of those developing a subscription service or product during lockdown, adding to the 28 per cent who already offered these services beforehand.

While entertainment subscriptions are the most popular, food and meal subscription services, like food boxes and cocktail making kits, are the second most adopted, with health, wellbeing and grooming services are gowing.

“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,” suggests retail expert Mary Portas.

“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.”

UK businesses have always been recognisable by their ingenuity and ability to pinpoint their customers’ needs, she adds.
"Now, with many pivoting towards the subscription economy, we have further proof retailers are willing to try new things to find untapped revenue streams.”

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.

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.

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

“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.”

Steve May

Inside CI Editor Steve May is a freelance technology specialist who also writes for T3TechRadarHome Cinema Choice, Trusted Reviews and The Luxe Review.

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