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The Rise of the Subscription Model in the FMCG Industry

The UK subscription box market is expected to reach £1.8 billion by 2025, up 34.7% from 2020. As consumers increasingly seek value, quality, variety and convenience, more brands from the FMCG sector are giving the subscription model a go. Discover more about their experiences in our article.

November 14, 2023

5 mins read

Celeste Rivas, Anastasia Hamurari

Between work, the commute, family and social lives, modern living is getting busier. Consumers are increasingly looking for more convenient ways to shop for essentials such as food, drink and hygiene products. As a result, subscription boxes are soaring in popularity. 

In the UK, the subscription box market is estimated to be worth £1.8 billion by 2025, up 34.7% from 2020, with just under 30% of shoppers currently subscribed to at least one of these services. 

FMCG brands have found a space to grow and succeed, namely by implementing subscription models. The industry’s subscription model has been growing steadily for over a decade, particularly in male grooming and food and drink services. 

The consumer-packaged goods (CPG) sector grew markedly during the pandemic in the UK, with its market value expected to reach just under £729 million by 2025, up from £521 million in 2020. 

In this article, we reveal why the FMCG subscription model is continuing to gain popularity, how a DTC channel can help sustain this model, and what we can learn from successful brands who have successfully implemented and from them.  

Why do consumers choose subscription boxes?

There are several reasons behind consumers’ decision to sign up for subscriptions, but value for money remains their top priority. 

62% of survey respondents report that price points are their main motivation to sign up for a subscription service, and it’s also the top reason to cancel a subscription. 

Many brands seek to highlight this factor in the consumers’ decision-making process by focusing on the freshness or source of their produce, particularly in the case of vegetable and fruit boxes. Others look to sign-up-specific special discounts or an emphasis on the potential time savings their subscription boxes could provide. 

However, price alone is not enough to attract consumers. The high quality of the products, a good variety of items or shopping experiences, as well as convenience have also ranked among common motives driving them to choose subscriptions. 

Beyond this, some consumers also value the more playful aspects subscription boxes can offer. Access to fun items or shopping experiences, as well as the possibility to customize orders, were also among the top reasons to subscribe. 

In the same vein, offering the opportunity to remove or add items to suit customers’ tastes or routines better, or adding surprise extras from time to time, can be an effective way to attract and retain customers. 

How FMCG companies are using the subscription box model

A growing number of FMCG brands are capitalizing on the growing popularity of subscription boxes. With reduced customer acquisition costs, easier revenue predictions and stronger customer relationships, the abundance of benefits is appealing. 

Learn how the FMCG brands below have successfully launched a subscription model. 

Smol: embracing subscription for sustainable cleaning

Launched in 2018, this cleaning product subscription service caters to those shoppers worried about the future of the planet – a growing concern among FMCG consumers.

With sustainability and eco-friendliness at the heart of its business, Smol offers a range of vegan and cruelty-free products. The range is extensive, spanning laundry and dishwasher detergent, fabric conditioner and surface sprays, all dispatched in either 100% plastic-free packaging or refillable bottles made with recycled plastic. 

Smol also tracks how many tons of plastic and chemicals were saved by customers switching to the brand, as well as reduction in carbon emissions. 

Subscribers can choose separate products or a starter kit that includes different items and can get a taste of the service by signing up for a free trial. Once signed up, they get regular deliveries that can be adjusted, paused or canceled, if needed. 

Smol biological laundry capsules

Bimuno: nurturing gut health with innovative prebiotic solutions

This subscription-based health and wellness brand offers a seamless and convenient way to prioritize gut health. Through a personalized subscription plan, customers can enjoy a consistent supply of Bimuno's innovative prebiotics delivered right to their doorstep.
 
The subscription model offers customization options, allowing individuals to tailor their Bimuno experience according to their specific needs.  

In seeking to accelerate new customer acquisition and subscriber numbers outside of physical retail, Binumo partnered with Ingenuity to scale their direct-to-consumer presence in the digital space. Ingenuity’s tailored approach to each client’s proposition meant that a dedicated trading manager was on-hand to work closely with the Bimuno ecommerce team and their chosen digital marketing agency.

This enabled a unique mix of resources to come together and implement key strategic changes across the site to drive conversion rates and optimize the customer experience. 

The result: +100% increase in subscribers within five months of launching on the Ingenuity platform.    

Oddbox: reducing food waste with subscription boxes

With the goal of reducing food waste by rescuing misshapen fruit and vegetables unwanted by supermarkets, Oddbox offers boxes with produce for weekly or bi-weekly delivery.  

The service allows subscribers to personalize their orders, with the option to choose what to leave out of their boxes. Customers can also pick the box’s size and even add a last-minute rescue item.   

Just like Smol and Bimuno, Oddbox offers subscribers the possibility to pause, cancel or skip a delivery with ease. 

The FMCG brand has also recently expanded into Scotland in a bid to rescue more than 150,000 tonnes of food by 2025. Beyond this expansion, Oddbox is bringing a boost to the wider region’s economy by partnering with a local logistics firm to ensure smooth delivery for customers. 

The subscription revolution: FMCG brands catering to evolving consumer demands

As consumers increasingly look for alternatives to their local supermarket to get their everyday essentials - be it in the search of value, quality, variety or convenience – many FMCG brands are embracing the subscription model to satisfy these demands. 

Finding the right partner is essential for FMCG companies looking to scale their subscription model. With a global commerce platform, fully integrated digital services, global fulfilment and delivery, and a unified technology stack, Ingenuity has helped FMCG brands such as Bimuno and Vital Proteins optimize their direct-to-consumer (DTC) offering and reach new audiences effectively. 

Get in touch with us today and find out how we can support your brand’s DTC journey. 

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