UK ‘subscription box’ market to be worth £1bn by 2022
Subscription commerce has moved on from just magazines and newspapers to embrace everything from recipe food kits, to shaving gear and self-care.
The UK subscription market is still in relative infancy compared to mature markets like the USA, but it appears to now be in a phase of rapid growth as UK consumers embrace subscription brands.
Over a quarter of UK consumers are currently signed up to a subscription box service, either for themselves or on behalf of somebody else. Over half of 25-34 year olds (52.1%) are signed up to at least one, compared to 11.7% of 55-64 year olds and 7.6% of those over 65 year olds.
Male grooming and beauty subscription services offer the biggest growth opportunities in the market. The report suggests that male grooming subscriptions could attract almost two million members by 2022, making them the fastest growing subscription category.
Beauty box services also cater to the replenishment needs of their subscribers, but additionally offer the excitement of getting to try out new products. Beauty subscription services are more established in the UK than their counterparts in male grooming.
‘Niche’ products also represent a strong growth opportunity, especially within the food and drink sector. There are plenty of opportunities to cater for specialised diets, such as veganism, with shoppers often appreciating a helping hand when it comes to deciding what to eat. More unusual products that are not easily available in shops also offer up an opportunity to service needs not currently being met by mainstream retailers.
Six in ten (58.6%) of the businesses surveyed intend to invest in new or existing subscription services in the next year. Almost three quarters (72.4%) intend to add new products to their service in the next twelve months. In terms of the likely longevity of this type of business model, over half (51.7%) of the businesses we surveyed agree that subscriptions are set to be a major focus for their company in the future.
Oliver Bridge, founder & CEO of Cornerstone, which delivers razors, said: “Based on our experience of rapid growth at Cornerstone, I put the popularity of subscription services down to two key factors: (1) the sheer convenience the subscription model can offer consumers versus spending time in a physical shop and (2) many authentic and engaging brands are now choosing to be digital-first rather than selling through traditional retailers. If consumers want to buy from independent, up and coming brands often the only way to do so is directly from the brands themselves, through the internet.”
A spokesperson from Royal Mail said: “Our Report demonstrates demand amongst consumers for subscription box services, and an appetite amongst UK businesses to invest time and money to participate in the future growth of this part of the delivery market. To date, the boom in subscription box services has largely been driven by start-ups. This forecast of further growth offers an opportunity for existing businesses and budding entrepreneurs to get out there and offer their own services. We’re here to help them along the way, wherever they are in the UK.”
Published: 10 September 2018
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