Subscription-based delivery services rake in £2 billion annually

Thursday, May 10, 2018 - 09:48 by Graham Miller

While plenty of British consumers shop online on an ad hoc basis, a growing number are choosing to subscribe to services that send out a variety of items at regular intervals.

A new study commissioned by Whistl has revealed that retail subscriptions are generating £2 billion a year in sales across the UK.

The biggest player in this market is Amazon, with its Prime service used by 61.4 per cent of the 1000 respondents to the survey. Similar services like nextunlimited and ASOS Premier are also popular, albeit with an uptake rate of less than ten per cent apiece.

Another part of this market is dedicated to consumable goods, with snack box company, Graze, earning favour with 12.3 per cent of the people who participated in the report.

Consumers were asked to highlight the advantages that subscription services offer compared with standard approaches to safe shopping online. Forty five per cent said that they were simply more convenient, while 60 per cent argued that they represented an especially cost-effective way to get access to products that would otherwise be more expensive if purchased individually.

Amazon Prime can typically save customers £165 annually, in spite of the fact that around a fifth of subscribers admitted to not really taking advantage of the inclusive features offered as part of their subscription.

Almost half of consumers confirmed that they had made purchases as a direct result of having a subscription, suggesting that this can be a good way for retailers to boost sales and engage with customers directly.

Whether subscription services will continue to grow at current rates remains uncertain, but the £2 billion in sales that they generate at the moment is a small but significant slice of the online retail market as a whole.