A booming subscription economy is great news for all marketers

  • by John Eversley
  • 12/07/2021

Subscription-based services grew massively throughout the pandemic flying in the face of the biggest economic trauma since the Second World War. Subscription models are emerging across all sectors with new subscribers to entertainment brands, including Netflix and Disney+ leading the charge.

Other sectors from wine and food to fitness, health and wellbeing, and pet foods to language studies - are all enjoying bumper uplifts powered by stay-at-home lockdown demand for entertainment. At the height of the lockdown restrictions Disney+ experienced a 72% increase in subscriptions.

The writing was already on the wall before the Covid-19 hit as the ‘subscription box’ industry outstripped other sectors with double digit growth, prompting the likes of Royal Mail to services while Amazon adjusted its model to reflect demand. The growth of parcel ordering during lockdown has been highlighted by a YouGov poll for Royal Mail in June last year, when nearly half (45%) of UK adults say they had received more parcel deliveries.

The study reveals that 37% of UK consumers have signed up to at least one new subscription service since the first lockdown in March 2020, a positive recruitment story. Ongoing pandemic measures are also driving consumer loyalty, with nearly three quarters of new subscribers (72%) likely to continue. It’s a win-win scenario for subscription marketing.

The coronavirus casts a long shadow affecting the economy and shopping habits. As we ease along the roadmap to normality consumer attitudes and behaviours are continuously as people increasingly choose to make online purchases and switching to subscriptions. The slowdown in business in 2020 will only increase the real competition among subscription-based businesses as non-subscription companies convert to this model to meet new consumer demand for services.

As the market recovers and brands reboot, we can expect real clutter. To achieve success marketers must focus on audience for each sector. Generational appetite for subscription varies by sector. Typically we see 18-24s looking for music and streaming experiences; 25s-34s are most likely to sign up for fast-growing fitness & wellness services; whilst reading (books, magazines, publications), wine and food remain strong in the older cohorts. That said, the lines are rapidly blurring as subscription is more widely adopted by consumers and the market grows.

Faced with the challenge of clutter and choice, marketers are looking to overhaul aspects of their strategies to combat competition and this is leading to a focus on differentiation. It’s one of the most efficient ways to carve out a section of the market. Differentiating your products or services from competitor offerings will better establish your brand and help you stand out from the crowd.

There are many ways to tweak and adjust what your brand is about. Having a customer-centric solution, or a frictionless journey for your customer is one of the best ways to showcase your offer ahead of others. But at the heart of success is knowing your customer better than potential suitors. If you already run a subscription business the data at your disposal is probably significant. Accessing it will be ‘gold’ and is the key to development and growth. If you’re looking to start a subs business, or diversify you won’t have customer data - but that needn’t hold you back. Gaining real consumer insight from the audience you’re defining is crucial. Confirming the audience and the appetite for your proposition is a fundamental step and there are many ways to tackle this stage of planning.

With subscription-based buying set to become ever more competitive post lockdown, acquisition strategy will be vital. Data and insight are strong bedfellows alongside a digital marketing team with extensive knowledge in subscription-based marketing. This combination can really advance your position with great efficiency and cost effectiveness. Direct Response TV advertising can also prove an effective customer recruitment strategy; the interconnection between digital and TV in reaching a growing new audience is well proven.

The upcoming market opportunity is huge, with fast and significant growth predicted by key forecasters. Grabbing a slice is what is occupying more and more planning discussions right now and the need to take bold steps and invest in acquisition is emerging. The opportunity is growing and so is the channel mix to reach a more savvy or informed audience, from traditional print and broadcast channels to digital and social media. Whichever channels you use I would urge you to consider our

Four Top-Tips below to stand out and position your brand ahead of market clutter and competitors:

  • Relevance - Delivering meaningful messages and content, in advertising, by channel, by device, in location, and use preferences where possible to create effective personalised experiences.
  • Consistency - Providing every customer at every touchpoint with a unified voice that conveys a clear brand identity.
  • Creativity - Making unique and unexpected customer experiences, focus on new ideas and compelling messages.
  • Speed to market - Launching campaigns and new propositions that rapidly capitalise on new trends with efficient workflows and content tools; integrating the first brand touch point and e-commerce journey into one seamless customer experience.

Building better brand experiences means modernising how you talk to consumers, the acquisition promise, how you manage journeys and content, and - above all - the satisfaction you deliver.

Marketers will need spend more time managing the entire process; from acquisition themes or promises, to using content to build memorable digital experiences that convert customers, cultivate relationships with them and keep them loyal.

And once all that is taken care of, they’ll be less likely to set aside your brand for a rival subscription service.

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