UK businesses buy into growth opportunities of subscription services

UK businesses buy into growth opportunities of subscription services

Six in ten subscription box businesses intend to invest in new or existing subscriptions services in the next year, according to a report commissioned by Royal Mail.

Over half (52% ) of businesses agree that subscriptions are set to be a major focus of their company in the future.

Nine in ten (90%) of these businesses make at least some of their subscription revenue from outside the UK and just under a quarter 24 % make more than half of their sales from customers abroad.

Driving greater brand loyalty is a key motivation for launching a subscription service. Other important reasons include the desire for greater control and lower start-up costs.

Subscription box businesses see a return on investment relatively quickly, with 62 % achieving this within three months of a customer being signed up to a service.

Popular overseas markets include the Republic of Ireland, France, Germany and Spain.

A spokesperson from Royal Mail said “UK businesses are really buying into the growth opportunities that subscription services can deliver. Driving greater brand loyalty is a key motivation for launching subscription box services and we are also seeing lots of international opportunities for subscription businesses. We’re here to help these businesses along the way, wherever they are in the UK.

“With the UK’s biggest by far “Feet on the Street” network covering 90.000 postmen and women, Royal Mail is playing a key role in keeping carbon emissions low. The vast majority of subscription items are letterboxable and so are ideally suited for on-foot delivery by Royal Mail and do not require a van delivery.”

This is the third instalment of Royal Mail’s subscription box series, with a full report set to launch later in the year.

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1 Comment

  1. Helen Daniels

    And yet, a recent study of US online shoppers by McKinsey found a high churn rate; nearly 40% of shoppers cancelled their subscriptions due to poor experience. Over half do so within 6 months. Not as easy to get right as it appears. But maybe the UK market is a little behind the US?

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