By Dan Ziv, CEO of TouchNote
Lockdown has been a forced reflection for many of us in the UK. Humanitarian crisis aside, the FTSE dropped 14.3% in 2020, sinking to depths seen last in the 2008 financial crash. So how have we as a society changed? And what have we learnt? The answer might not be quite as bleak as you’d think.
As consumers in the pandemic, we turned largely to online and subscription services to stay entertained and connected. Here at TouchNote our purpose was clear; help people connect in times of increasingly fragmented and disrupted society. Whilst physically isolated, our members found solace in caring and nurturing their relationships with friends and family. And having a subscription model designed around maintaining meaningful connection, people discovered sending personalised cards with us was an easy, everyday way to boost their happiness.
A subscription boom
While COVID-19 had a significant negative effect on many markets, the subscription economy, and subscription eCommerce specifically, flourished. While S&P 500 retail companies saw sales shrink by an average of 10% in 2020, subscription businesses grew by about 12% in the same timeframe. OTT video streaming, digital media, and eLearning companies led the pack with growth over 25%.
A survey this year by Deloitte found that 16 per cent of 25 to 34-year-olds in the UK have three or more subscriptions, with a jump in these numbers in the last three months of 2020. To delve into that a little more, a report by Zuora, ‘The End of Ownership‘ showed that 77% of people in the UK had at least one subscription by the end of 2020, versus 70% in 2018. The average Brit held 2.7 subscriptions in 2020. In the US, it’s a similar picture with 82% of consumers subscribing to at least one paid streaming video service; the average subscriber has four paid video streaming services.
It’s predicted that Brits will spend more than £2 billion every year in the overall subscription market. Some of the main brands Brits have spent big on include everything from Netflix and Disney+, to Freddie’s Flowers, Hello Fresh and TouchNote.
The kindness economy
Once the novelty of zoom filters and weekly quizzes wore off, people began to crave a real way to maintain and nurture their relationships. That’s when TouchNote became the go to service to make regular sharing of meaningful moments accessible.
Interestingly, one of our largest growing segments was within 18–25-year-olds, with almost 60% of all cards sent being non-seasonal (i.e. not linked to holidays or special occasions). When looking at members who joined during the pandemic compared to those who joined pre-pandemic there are some notable trends to highlight. On average, subscribers send more cards to their friends than their parents. They have also used TouchNote more regularly in the past year than the average subscriber who joined pre-pandemic.
Subscribers turned to us because there was a real and authentic need to to connect, communicate and demonstrate kindness in ways that weren’t physical. We are seeing other UK companies tapping into the same needs and desires. Bloom & Wild, Freddie’s Flowers and Not on the High Street are gift-centric and have done exceptionally well during the pandemic. This is because people turned to them as a way of giving a virtual hug, substituting the limits of physical contact with something equally as meaningful.
Part of this success is also down to creating a community in which consumers feel personally connected to. This is vital to success according to the Edelman Trust Barometer, in which 83% of consumers stated they wanted to feel an emotional connection with brands, and personalisation is a core element to the creation of an emotional relationship.
So whilst nobody can say with certainty what the new normal looks like, it is somewhat reassuring to see that many have chosen to refocus on building a foundation of kindness in their lives and are using technology to do so. Looking ahead, it is clear that companies who can continue to help customers in their effort to lead a kinder life, will be rewarded with loyal customers for years to come.
