Most of us subscribe to something right? Be that newsletters from your favourite clothing brand or the latest offers from your preferred home furnishings retailer. In 2022, due to a mixture of the previous 2 years lockdown measures and the general convenience of online shopping, subscription services are bigger than ever.
Subscription services in the retail sector are nothing new; remember Reader’s Digest? But they have evolved, and they continue to do so as our behaviours as consumers change.
Brands already utilising subscription models prior to the Covid 19 Pandemic were ahead of the curve, but what about those businesses who had yet to fully embrace the power of the subscription model? Research from Zuora revealed that nearly 90% of subscription services were either grown or maintained during lockdown 1 in the UK. To further compound this, the DMA reported that customers interest in subscription based buying significantly increased between 2019 and 2020; with customers purchasing more alcohol (13%), beauty and cleaning products (14%), clothes (15%) and personal hygiene products (15%) via monthly subscriptions in 2020.
So how can your business tap into the lucrative subscriptions market? Lets look at the stats. Over 25% of UK consumers subscribe to at least one subscription service and 50% of 25-34 year olds will pick up a new service by the end of the year. This market is only going to grow exponentially as the convenience of online shopping via subscription services frees up more of our time to do the things we really enjoy.
One of the key features is focusing on customer loyalty and to be specific, how personalised you can be when it comes to engaging your customers. How well do you know your customers and their habits? Do you really understand what it is they need and exactly when they need it? 80% of customers are more likely to purchase products or services from a brand that sends personal content. That seems obvious right? You’d be surprised how many businesses neglect the personal approach.
Alongside the personal touch, you need to really harness the data from your subscription services to ensure you are delivering your messages at the right times in the right places.
Another important factor to consider is the increased awareness and desire for sustainable products and eco-focused initiatives. Do you use recyclable packaging? Are your delivery services carbon neutral? It’s a really important part of engaging your customer base and demonstrating you understand and resonate with their personal values. Did you know 65% of consumers would be willing to pay 20% more for sustainable purchases?
Of course there are many facets to the subscription model and not all of them will be right for your brand or business. How you choose to utilise subscriptions will need to work for you. What is important is that brands are making the best use of the consumer data at their fingertips and really channelling that into joined up marketing strategies.
Direct Mail for example is a great way to engage with the ever increasing remote working and home based community. By using your own customer data and cross referencing with readily available data such as demographic information, household spend, affluence etc you can really start to drill down and target those consumers you really think would benefit from your products or services.
If subscription services aren’t something you’ve yet considered for your brand, perhaps it’s time to start building yourself an audience.
Thanks for taking the time to read this blog, happy marketing!
*Sources – Zuora