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SMEs now need to tick the box for subscription marketing

Written by James Gray on Tuesday, 17 August 2021. Posted in Online, Sales & Marketing

With the widespread adoption of online shopping, digital services, and the effects of new technologies on many traditional industries, many consumer-focused market sectors have become increasingly over-saturated

SMEs now need to tick the box for subscription marketing

With the widespread adoption of online shopping, digital services, and the effects of new technologies on many traditional industries, many consumer-focused market sectors have become increasingly over-saturated - with consumer choice becoming overwhelming for simple products.

In this market, the number of subscription boxes that offer a curated product experience have rapidly grown, allowing consumers to choose an overall product area (specific alcohol, foods like cheese or delicatessen products, toys and games etc) and receive a range of different examples. This grants brand visibility within a limited field of choice, maximising brand awareness compared to a packed supermarket shelf, and associating products with curated experiences - each product is perceived as popular, a good example of the product area, and something the consumer should try.

UK subscription retailers have seen huge growth in the last 5 years,with the market more than doubling since 2017 - and predicted to be worth £1.8 billion by 2025 - reflecting the convenience and good perception of costs for many consumers.  

New research suggests that other factors are also big influences on subscription sales; according to Royal Mail’s report, 55% of subscription box consumers stated that they signed up to a regular service last year because they wanted to treat themselves or to cheer themselves up during lockdown. Almost 60% of shoppers who were surveyed also said they had purchased a subscription box as a gift during this time, as they were unable to see friends and family in person. Elsewhere, Emarsys states that “emotional factors are central to people’s motivations for signing up, as 32% of US consumers surveyed admitted they signed up to the subscription because it feels nice to receive something every month.”

As well as personalisation – with boxes typically curated to individual consumers and their needs – another aspect that fuels the continued popularity of this category is education, such as relevant information on how to use products or incorporate them into a wider skincare or beauty routine. Beauty subscription brand Birchbox is perhaps proof that this strategy works. In 2020, the brand re-focused its marketing efforts on ‘casual beauty consumers’ – those who have no or very little knowledge of beauty – as opposed to consumers with a high-level of beauty knowledge.

Digital subscription services have also seen increased demand since 2020, on top of their already substantial pre-pandemic growth. According to more Emarsys data released in March 2021, one in five UK consumers say they subscribed to a new digital subscription app like Netflix, Spotify, or Disney+ during the latest lockdown - with 34% of consumers aged 16 to 24 showing more interest in digital subscription apps than any other age group. Subscriptions for physical goods are now predicted to take over digital subscriptions in 2022, with this market eventually rising to $263bn globally by 2025. 

About the Author

James Gray

James Gray

James Gray is a classically-trained marketer with a passion for all things digital and an unequivocal love of data. He’s Head of Digital at Wonderful, and has crafted data-driven digital strategies for B2B and B2C clients. These include global brands such as Virgin and Mazda, as well as some of Britain’s market-leaders like LEVC and Deltic.

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