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Why is there a boom in subscriptions? The success of recurring payments.


Two subscription boxes; subscription payments; recurring payments

According to Royal Mail’s recent report, the UK subscription box market is set to be worth £1.8 billion by 2025, but why have subscriptions become so popular recently1?

The easy answer is to blame the boom on the pandemic whilst people were stuck at home, they looked for things that would bring them joy without leaving the house, and subscription boxes gave many something to look forward to and get excited about. Shortages from mainstream suppliers also meant people had to find new ways of getting hold of essentials, such as vegetables or coffee, explaining the spike in popularity of food subscriptions. However, despite lockdowns now being firmly in the past, research has revealed that the nation’s demand for subscriptions has continued to grow, reaching a value of £395 million in 20212. Subscription businesses have also grown much faster than their competitors, growing 5-8x faster than traditional businesses over the last nine years3.


Why subscriptions are so popular:
  1. Discovering new items and brands
    Subscription boxes are an excellent way to try new brands, particularly when items are tailored to a customer’s preferences, providing customers a way to try out new options with minimal risk. Having items chosen for them avoids choice overload, which is particularly common in oversaturated markets such as skincare, where customers are often overwhelmed by the number of options and struggle to make a decision. Including testers in regular subscription packages also works well from a business standpoint, as if a customer likes them, they are likely to purchase more.

  2. Exclusivity
    Subscriptions often provide customers with exclusive items. For example, a book subscription service might produce unique book covers, or hotels might offer access to a premium bar. This makes customers feel special and tailored-to, as well as feeling as if they have received good value for money.

  3. Convenience
    With the rise of our increasingly connected world, people are eager to find ways to make their lives easier. The reliable delivery of favourite customised products removes the need to remember to reorder.

  4. Value savings
    As subscriptions provide a predictable income, often businesses can charge less for products due to the assurance of multiple purchases. Whilst the business might make more overall, factoring in repeat buy and new favourite products discovered and added by customers, the bundle of products the customer receives is typically a lot less expensive than buying each product individually.

  5. Joy
    32% of US consumers surveyed admitted they signed up to the subscription because it feels nice to receive something every month4. Receiving something you like every month sparks joy, especially if it’s packaged nicely or offers something that adds to your customers’ experience. For example, restaurants now often include a QR code for a Spotify playlist and a candle or extra information about the food they’ve received in their boxes, making the experience of receiving their products more special.


How do subscriptions benefit business?


By December 2021, 67% of retailers planned to launch a new subscription service, including 36% who had not previously provided one5.


  • Lock customers in for more orders
    As long as your customers remain happy with your products, typically, subscription options mean greater brand loyalty and trust in your business. This means customers are more likely to buy from you as opposed to a competitor when they need something. Subscriptions, therefore, not only provide predictable upfront revenue, but also expansionary revenue.

  • Easy set-up
    For businesses that already have strong eCommerce or digital infrastructure in place, which most businesses have had to rapidly develop as a result of the pandemic, setting up subscription offerings is simple.

  • Less customer acquisition cost recovery time
    When customers sign up to a subscription model, it often means they spend more and faster than a customer who purchases a few items over an extended period as one-offs. This means that subscribers are far more profitable for your business, meaning you make back the cost of acquiring them far quicker.

How we can help

At Cashflows, we know how important it is for businesses to adapt to new opportunities. That’s why we can facilitate things like recurring payments to make sure that, if you want to provide your customers with subscription options, we are there to help.

With our Account Updater technology, you can also ensure that your customers' details are always up to date when payments are charged, reducing chargebacks, and meaning that you don’t need to chase them for new card details. 


1 Retail Gazette
2 Ibid.
3 Emarsys
4 Ibid.
5 Whistl