Seeking a more connected life, British millennials drive overall growth of the Subscription Economy according to new Zuora and YouGov study
London, United Kingdom – 9 October 2018 – Zuora, Inc., (NYSE: ZUO) the leading cloud-based subscription management platform provider, today unveiled research which claims that UK millennials are key drivers of the Subscription Economy®, with 73% looking to further increase subscription use over the next two years.
‘A Nation Subscribed,’ the UK-wide study of 2,002 consumers, conducted by YouGov with Zuora, demonstrates the rising preference for UK consumers to pay a recurring fee for ongoing access to critical and everyday services such as TV, video on demand (VOD), insurance and utility services. Today, 82% of people across the UK now subscribe to at least one product or service and nearly a quarter of Brits (24%) who would forgo buying a car, are likely to subscribe to a car-as-a-service within the next year.
UK consumers subscribe to essential everyday-life services
- Overall, insurance (44%) is by far the most popular subscription service, followed by TV (40%) and utility services (40%).
- The main benefits of using subscription services are convenience (48%), followed by price/cost (29%) and ease of use (27%).
- Transportation is also seeing a huge transformation as it relates to the Subscription Economy, with nearly a quarter of Brits (24%) who would forgo buying a car, are likely to subscribe to a car-as-a-service within the next year – men (27%) more confident than women (22%).
Millennials, the UK’s fastest growing cohort in the workplace, are driving subscription growth
- Millennials account for the majority of subscription use, with 77% of 16-24 year olds, and 85% of 25-34 year olds subscribing to at least one product and/or service.
- Millennials differ from the national trend, with the most popular services being VOD (49%), music (36%) and fitness (22%) applications.
- Millennials are the most open to using more subscription services within the next two years, even more so than current subscribers – and they’re willing to pay for it. 16-24 year olds are specifically interested in subscribing to connected cities services (56%), home security services (47%), and smart heating, cooling and lighting services (46%).
- Nearly half (48%) of 16-24-year-olds agree that subscriptions are the future, as do 51% of 25-34-year-olds.
- What’s more, 56% of 16-24-year-olds could envision subscribing to services for connected cities, while 31% are interested in connected/self-driving cars.
Men spend more than women on subscriptions
- The average Brit spends £44.55 per month on subscription services, with a slight variance between men and women. On average, men spend £10 pounds more than women (£49.92 for men, £39.14 for women) and those aged 45-54 spend significantly more than their younger counterparts at £54 per month.
- Men within the UK are more likely to subscribe to newspapers and books (20% vs.15%) and women are more likely to subscribe to fitness services (16% vs.14%).
The rise in subscriptions can be attributed to an increase in the number of businesses across nearly all industries offering recurring services. According to the Zuora® Subscription Economy Index™, this business model strategy suggests that subscription businesses in the UK grow revenue nearly six times faster than FTSE (London), CAC (Paris) and DAX (Berlin) stock indices.
“It’s the end of ownership as we know it. Brits are no longer seeing subscription services as a ‘nice to have’, but consider them an integral part of their everyday life,” said Zuora Managing Director for EMEA, John Phillips. “Driven by convenience and value, millennials are adopting subscriptions at a rapid pace, pushing companies to rethink their business model. It’s likely that as the UK evolves to become smarter, fully connected and more efficient, we’ll see a new generation of businesses catering to this trend.”
The full results of the YouGov study are explored in full in a new Zuora report released today, “A Nation Subscribed: 2018 State of the UK Subscription Economy”. The report provides insight for UK companies in all industries about how they can shift and transform business models in line with consumers’ preference for on-demand, personalised, and subscription-based access to services.
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy™, the Zuora® platform was architected specifically for dynamic, recurring subscription business models and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Komatsu, Rogers, Schneider Electric, Xplornet and Zendesk. Headquartered in Silicon Valley, Zuora also operates offices in Atlanta, Boston, Denver, San Francisco, London, Paris, Beijing, Sydney, Chennai and Tokyo. To learn more about the Zuora platform, please visit zuorainternprd.wpengine.com.