Subscriptions suffer in face of inflation, but there's an upside too
As Britons face up to the inflationary environment and decide what to cut back on, subscriptions are among the first ‘luxuries’ to go, a new report claims.
And while that might mean cancelling magazine subscriptions, it could also mean axeing the monthly beauty box or cancelling the direct debit for fashion retailer premium membership schemes.
Barclaycard Payments said that subscription economy growth is stalling as the combined effects of a return to pre-pandemic lifestyles and rapidly rising prices mean consumers are reprioritising their spending behaviour.
Some 36% of people have cancelled at least one subscription because their disposable income is down and 31% of them specifically cited higher prices as an issue.
As well as entertainment platforms like Netflix, beauty and grooming kits are among the products they’re most likely to have dumped.
A year ago, 81% of households were signed up to subscriptions, but the firm’s research shows that figure is now just 67%.
Its conclusions were drawn from research it commissioned via Opinium among 2,000 UK consumers last month. It also spoke to 400 UK senior decision-makers from a range of retail sectors.
There were some bright spots in the report as, despite some existing subscribers cancelling their subs, new customers are still signing up. And as many as 38% of people see subscriptions as good value for money.
Meanwhile 34% also think they’re helpful as far as managing finances are concerned. That could be key in attracting more new customers if a recession happens later this year as predicted.
Some 69% of businesses spoken to expect the subscription economy to continue to grow and a high proportion of those that don’t yet have a subscription offer are planning to launch one in the next year.
So what would make consumers sign up? An unsurprising 38% of people said good value, 32% said a free trial would encourage them, 27% would look out for free delivery and 21% would like flexible contracts. It’s significant that all of those attractions are connected to the idea of value in some way.
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