In five years’ time…

Royal Mail has launched The UK Subscription Box Boom Report, including an in-depth look at the subscription box economy.

Forecast to be valued at £1 billion by 2022, the report highlights key trends across the market, providing advice and insights for businesses already operating in the space or looking to do so in the near future.

Start-ups vs. established brands

The meteoric rise of subscription boxes has largely been driven by start-ups. The low barriers to entry in the subscription box market have meant that even with limited capital and resources, entrepreneurs can establish and build a successful business.

Such success is now sparking interest from bigger brands including Gillette and Sephora hoping to emulate the performance of subscription companies such as Dollar Shave Club and Birchbox. Yet, subscription box companies have not always considered big retailers and brands to be their direct competition and have found ways to work in collaboration.

Brands such as Graze are now stocking their products in conventional retail stores, while Unilever acquired Dollar Shave Club for $1 billion in 2016. Brands like Estee Lauder have also made use of the wealth of data that subscription brands hold on their customers to find new ways of targeting shoppers with their latest products.

Looking overseas

The subscription box business model presents significant opportunities for international expansion, with our survey revealing that nearly 90% of subscription businesses make at least some of their sales overseas.

Moves by overseas brands, including Birchbox, Harry’s and Dollar Shave Club to enter the UK market have been mirrored by the efforts of UK brands to conquer territories abroad. Graze garnered over 150,000 US subscribers within just three months of its launch in the USA in 2014 and now enjoys a major presence on the US snacking scene.

Significant growth

Businesses across the UK understand the significant growth opportunities that subscription services can deliver. The market is growing at a phenomenal rate. Future success will hinge on overcoming the key barriers to the take-up of subscription services whilst keeping subscribers engaged.

At Royal Mail, we are ready to help businesses across the UK to succeed in the subscription space whether they already have a subscriber base or are looking to enter the market.

This is the sixth and final instalment of Royal Mail’s subscription box series. Click here to download the full report.