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– Subscription Economy –
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The subscription economy refers to the general trend of companies shifting to a subscription business model. The subscription model involves selling recurring subscriptions to consumers in exchange for access to a product or service.
The Subscription Economy, gaining the full potential
Resilience and sustainability in times of crisis
COVID-19 has quickly emerged as the number one risk to global activity, with every sector of the economy being hit. However, research shows that subscription-based businesses are proving resilient in the face of this crisis, with 8 out of 10 companies sustaining or growing their subscriber base.
The term “subscription economy” refers to the business of offering subscriptions to consumers. For some companies, their entire business relies on a subscription business model. Examples of these include Netflix, Spotify, Zipcar, and all SaaS companies.
Others companies offer subscriptions in addition to their pay-per-product businesses. Examples of these include Amazon / Amazon Prime which incorporates a subscription into their pay-per-product business model.
Sightglass Coffee offers both pay-per-product and subscription services. Walmart launched a subscription-based food delivery service. (Which has since been shut down).
Some startups, such as NatureBox, Dollar Shave Club, Trunk Club, Wittlebee, and Blue Apron, are based entirely on a subscription business model.
Currently, there is an increase in subscription companies as part of a larger shift from the product economy to the subscription economy. Businesses now need to handle customer loyalty, pricing, and selling very differently.
Running a subscription company means there is a continuing relationship with the customer. No longer does the business-customer relationship end with the swipe of a credit card.