By Chris Godderidge, VP Mobile, Emarsys
With non-essential stores closed for several months, consumers buying habits have changed dramatically. Whereas once, we could pop to the shop and buy last-minute essentials or mood-lifting treats, people have been forced to find new ways to treat themselves during lockdown.
However, as the old adage goes, necessity is the mother of invention. During the last year, consumers have overcome the challenges of lockdown and found new ways to maintain normality, despite the impact of the pandemic.
Filling this gap has been subscription boxes. While these regular, themed deliveries are not a new concept, lockdown has triggered a surge in customers signing up to them. But what caused this rise in popularity and what can retailers learn from this situation?
The subscription economy
One in five (17%) consumers now receive subscription boxes, ranging from toilet paper to dog food, razors and even ink cartridges – consumers have turned to this model during lockdown to ensure they can get hold of what they need when they need it.
While avoiding the shops has been a major reason for this shift to online buying of subscription boxes, this approach to buying goods and services benefits consumers and retailers in numerous ways.
With deliveries often aligning with payment of wages, many consumers believe that paying for subscriptions on a monthly basis feels more affordable and helps them manage cash flow. Plus, they can be conveniently reviewed or changed at the click of a button and from the safety of your home.
Additionally, instead of businesses obsessing over a one-off product sale, it requires them to focus on the customer’s individual needs, desires and experiences. In order to grow their customer base and retain clients in a competitive landscape, firms need to constantly innovate and please their subscribers to keep them interested and build their long-term loyalty.
Following months of varying restrictions, entertainment became one outlet for some of the boredoms and frustrations of lockdown, with the media and telecoms industry driving this trend.
In fact, our research shows that around one in five UK consumers signed up to a new subscription app like Netflix and Spotify during the latest lockdown — with the 16–24 age bracket (34%) showing more interest in digital subscription apps than any other age group.
However, this trend for app-based subscription services goes far beyond TV and music — it’s now cocktail-making tasting subscriptions, monthly beauty boxes, pasta by post and even weekly flower deliveries. This gives shoppers something special to look forward to, so they can recreate a restaurant experience, deliver their own a date night, or even get pampered at a self-made spa.
According to Emarsys research, food subscription services are the most popular, accounting for nearly a third (29%) of physical subscription buyers. These boxes often make people’s lives easier by delivering quick, healthy and interesting meals and recipe cards. This is followed by beauty and grooming (20%), alcohol (10%) and health and fitness products (9%), which help keep people in shape from home while gyms have been closed.
With access to the things that usually bring us joy, such as holidays, eating out and shopping trips, being limited and even removed entirely, there has been little to look forward to. Subscription services, however, seem to be helping to plug that gap. A third (32%) say that subscription apps have helped them relax, while 19% say that they’ve help them handle loneliness during lockdown.
Gifting yourself or someone else with a subscription box has also been a way to give consumers an element of excitement during a time that has felt very monotonous. Almost 30% say that it feels nice to receive something every month in the post and almost a quarter (22%) like the surprise of not knowing what they’ll receive each month.
Looking to the future
Lockdowns have accelerated the growth of the already booming subscription economy. Part of the reason that both physical and digital subscriptions have succeeded is because most are delivered through a mobile app. Consumers have become even more attached to these devices during lockdown, with 62% of Brits spending more time looking at their phone during this time.
With restrictions lifting and shops tentatively reopening, however, the challenge for the brands that offer these services is to retain these new customers. The key to doing that is to remain relevant to them, which means keeping personalisation front and centre.
Traditionally, offering a personalised experience on mobile has been challenging, but now technology exists that can help brands offer a one-to-one tailored experience for each and every customer based on their exact preferences and needs. While the face of retail has been changed forever, the future looks bright for the brands willing to adapt to this model.