UK Moves To Subscription Economy
A recent YouGov survey of more than 2,000 people in the UK, sponsored by subscription software firm Zuora has revealed that the average monthly spend by UK adults on subscription services of all kinds has tripled in the past year.
A challenging global economy, fierce competition, disruption and changes across many industry sectors, the need to reduce costs and combat piracy (e.g. of software), and the effect of consumers getting used to using their mobile devices to sign up for what they want, when they want (and switch just as easily), plus a shift towards apps and the ease on online payment systems are some of the contributors to what has become a challenge to customer loyalty and retention.
What Kinds of Subscriptions?
Businesses are now offering a vast range of subscription-based services including:
The report shows that a staggering 58 million UK shoppers now subscribe to services, and UK consumers now spend 12% of their monthly disposable income on subscription services. This means that the UK adult population is now spending an average £56 per month on subscription services. 35–54 year-olds are spending the most at £62 every month on their subscriptions, although spending has risen across all age groups and isn’t confined to just millennials.
What Does This Mean For Your Business?
Consumers in the UK now have a clear preference for on-demand, personalised, and subscription-based access to services. The subscription-business model has officially gone mainstream, and in order to compete effectively, retain as well as gain customers, and to protect customer and brand loyalty, businesses need to look seriously at how they can take advantage of this opportunity by shifting and transforming their business models so that they are in-line with the subscription economy that consumers are buying so heavily into.
One other interesting finding in the report is that a quarter of the UK population predict that they will be subscribing to even more services over the next five years. This should flag-up the importance for UK businesses to look now at how they can best position themselves to get a piece of the subscription pie in what appears to be a trend that is set to continue.