Royal Mail: we are perfectly placed to support subscription box businesses and their future growth

Royal Mail: we are perfectly placed to support subscription box businesses and their future growth

The UK subscription box market is set to be worth £1.8 billion by 2025, according to Royal Mails new UK Subscription Box Market report. 

The forecast comes as the subscription box market has seen its value more than double in size (135%) since Royal Mail’s last report on the industry, based on figures from 2017**. Consumers spent almost £1.4 billion on subscription box purchases in 2020 and delivery providers made just under 88 million subscription box deliveries to subscribers across the UK.

The popularity of subscription boxes has soared during the COVID-19 pandemic, amid more general acceleration in online retail growth. During the pandemic, 55% of subscription box consumers stated that they signed up for a subscription box service because they wanted to treat themselves. For many, subscription box services helped to ease ‘lockdown blues’ as shoppers could look forward to regular deliveries.

Almost a third (30%) of shoppers are now signed up to at least one subscription box service. This is up from 27% in 2017. Almost three-quarters (74%) of subscription box shoppers are signed up to more than one subscription scheme while the number of subscribers signed up to four or more schemes has risen to 56% (up from 37% in 2017). This increase in the average number of subscription boxes consumers are signed up to is reflective of strong innovation in the market.

The appeal of subscription boxes continues to be highest among younger shoppers, with 66% of 18-24 shoppers stating that they are signed up to at least one subscription box. Further to this, under 45s subscription box shoppers are signed up to the most subscription plans, with those aged 35-44 signing up to an average of 4.6 subscription schemes. Improving appeal to older shoppers will be integral to further growth in the market over the coming years.

On average, shoppers said that had been signed up to subscription boxes for nine months; up from 5.6 months in Royal Mail’s previous report, as consumers are increasingly used to the subscription model.

More than a quarter (27%) of all subscription boxes are delivered through a letterbox making Royal Mail’s combined letter and parcel delivery network ideally suited to this business model. 

Nick Landon, Chief Commercial Officer at Royal Mail, said: “The subscription box market continues to grow very quickly and the pandemic has provided even more opportunities for businesses to explore new revenue streams or for entrepreneurs to put their ideas into practice. 2020 provided a huge boost to the market and accelerated demand and growth. At Royal Mail, we are perfectly placed to support subscription box businesses and their future growth, whatever stage their business is at.

“ A large proportion of subscription items are sent in smaller boxes and so are ideally suited for low emission on-foot delivery by Royal Mail.”

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