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Subscription models: never a better time to advertise

It comes as no surprise to anyone that during this global pandemic, people’s daily routines have changed. The high street, once packed, now stands empty with its customers at home in isolation. Routines have changed, but the customers haven’t.

Lockdown has prevented us from seeing friends and family, and from spending money on activities, events, and food and drink. The majority of us are still receiving an income but now have limited outlets for spending. People enjoy spending money on items and activities to entertain or distract and although staying at home is a change in routine, it’s not a change in personality.

This presents a clear and present opportunity for brands who can adapt and thrive on customers who want to spend money without leaving the home.

Effects of lockdown on online retail
There is no clearer example than the world’s foremost online store, Amazon. Jeff Bezos’ online empire smashed its all-time highest share price amidst the pandemic on the 14th April after a small dip in March. Then it did it again, eclipsing the previous height on four further dates later in April, eventually reaching its highest all-time price to present on 20th May – almost 10% higher than 14th April.

This is far from limited to one store however and should be realised as a reflection of customers’ new preferences: individuals looking to maintain social distancing are replacing in-store footfall with online shopping in volumes far exceeding normality.

Importance of routine
While customers are also shopping online, we also need to consider the impact of routine. To borrow a phrase we are all tired of: we are living in uncertain times. This rings true for those us of who appreciate a clear split between workday and evening, weekday and weekend, and regular events at scheduled times. These lines have been blurred while working from home, and this is especially true for those of us currently furloughed. The concept of creating a weekly allocated event becomes a lot more exciting in lockdown.

As discussed by Nick Chater, professor of behavioural sciences at the University of Warwick, “routine is something we simply can’t live without” (quoted from ‘The Conversation’, 16.08.18).

Therefore, our review focuses on two main areas of uplift:

  • Online shopping for home deliveries
  • Subscription models for home deliveries and events

Consumer trends visualised
Google Trends shows support of both areas being uplifted by lockdown, represented by the chart below.

Google Trends UK data from 1st Jan to 24th May. The chart is proportional, the highest point in date range is at 100 – all other points are in relation to this.

Searches for the term ‘delivery’ spikes massively from 14th March onwards. Even in May, where searches have normalised, average daily search propensity is 2.7 times higher than in 1st January to 14th March.

For subscription boxes, the uplift is softer but still present. From 22nd March to present, there has been a consistent propensity baseline 1.7 times higher than in 1st January to 21st March.

Overall, it is clear that customers have dramatically shifted their purchase intentions to online platforms, giving any advertisers who specialise in home deliveries a boost. This is further amplified for brands that can offer repeat purchase options through a weekly or bi-weekly subscription model, which gives customers a refreshing sense of regularity in otherwise irregular times.

Advertiser uplifts at All Response Media
We have seen our subscription-based home delivery advertisers generate a notable uplift in daily website visits and sales in the wake of lockdown. These cover a range of categories, including clothing, food and drink, and flower delivery.

Subscription brands currently advertising have seen unique daily visitors increase by around 50-150% during lockdown versus the months immediately preceding, even when accounting for media spends.

All Response Media viewpoint
Our perspective on this is simple: for any brands that can deliver a product or service at home, especially by the subscription model, there has never been a better time to advertise.

Not only are customers ready and waiting for an opportunity to spend, but it is also worth considering the current costs of advertising due to lockdown – which are some of the lowest seen in recent memory, as we have covered extensively in our recent communications.

For TV, in particular, we are seeing brands generate 35-45% additional TV viewers (impacts) for the same level of spend compared year-on-year, which presents a huge opportunity for growth and scale with a focus on customer acquisition. Current prices are a reflection of many advertisers reducing their spends and may only be temporary. Therefore, we would encourage for any advertisers who are able to, to make the best use of the lockdown while it exists!

Stay safe and stay in touch with your ARM client teams! For more information on the TV services, we offer click here.