Strategy Briefing

Engage, Return and Repeat: The Subscription Economy

Jan 2017

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

The subscription economy is one of several alternative business models gaining traction across sectors. On the whole, a successful subscription service is just one aspect of a multi-channel offer. For business, the model signifies a new revenue stream, but often above that, a valuable source of data on consumers. For consumers, in its optimum guise, the subscription economy offers value and convenience, fitting with the shift in values and priorities we are seeing today in the New Consumerism.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Changing balance of power amongst consumer goods manufacturers and retailers

The subscription model is important as it shifts the balance of power between retailer and manufacturer, enabling the manufacturer to reach out directly to consumers. The model guarantees revenue, builds consumer loyalty and allows companies to build data on their consumers.

Surprise subscription boxes becoming increasingly ubiquitous

Surprise boxes are becoming commonplace across a wide range of consumer sectors. Many boxes have fallen by the wayside and the plethora of boxes available has led to subscription-fatigue for some. Curation, exclusivity and experience are key.

Subscribing to regular supplies of goods works best for products which engender brand loyalty

Subscribing to regular supplies sits perfectly with goods that are constantly used, and also ones where the consumer does not feel the need to shop around. There are challenges with the model as it needs to be flexible, engender trust, provide value for money and be accurate – consumers do not want to pay for more than they need.

From ownership to access requires attitudinal change

Often about replacing goods with a service, changing consumer mindsets can be amongst the biggest challenges of short-term access models. Establishing trust, focusing on customer service and efficiency are important to overcome consumer reticence.

Leasing – a circular future for durable goods

Leasing is an integral part of a move towards a circular economy, one where nothing is wasted and everything is reused. The basic premise is that the manufacturer retains ownership of the item throughout, making it easy to remanufacture, recycle and get maximum value out of the product and its raw materials. Value, flexibility and convenience are key.

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Introduction

Scope

Key findings

What do we mean by the subscription economy?

Subscription models: What’s changed?

The Surprise Subscription Box

Delving into the box

What’s in it for business?

Why do consumers like them?

Passing fad or sustainable business model?

Dos and Don’ts

Walmart Beauty Box: Value and discovery

Avenue A by Adidas: C uration and exclusivity

Graze: Online personalisation to bricks and mortar retail

MightyFix: Single discovery product

Birchbox : The frontrunner branches out to bricks and mortar

And for the contents that don’t measure up: The Aftermarket

Regular Supplies

Convenient and steady

What’s in it for business?

Why do consumers like them?

Are they viable in the long-term?

Dollar Shave Club: The right product at the right price

Amazon Dash Button: Convenience and technology

Peloton: Product and service bundle

Starbucks Reserve: Competes with niche players

Tide Wash Club: Convenience at a price

Target Subscriptions: I ncorporating special offers

ClassPass: Unsustainable pricing strategy

Jet.com abandons subscription model

Short-Term Access

The on-demand economy

Why selling access can be better for business

Why access can beat ownership for consumers

How to overcome resistance to change

An end to business as usual?

Book-n-Drive: A partnership with synergy

Baú verde: Consumer loyalty a prime concern

MUD Jeans: Emphasises ethical credentials

Wassup: Bypassing the washing machine

Long-Term Leasing

Leasing: A n old model revived for the modern age

Which products are most suited to leasing?

What’s in it for business?

Why do consumers lease?

Consumer and operational challenges to overcome

The death of ownership?

Solar City: Affordable and cost-effective

Currys and PC World Upgrade Anytime: Keeping up with latest tech

Bundles: Selling a service in a circular economy

Meublicity: Packs and end of life bargains

Flexirent: Pricing strategy open to criticism

Conclusion

The subscription model is not a one-size fits-all affair

Subscription models generate key benefits for business

The main subscription features valued by consumers include

Flash in the pan or here to stay?

Why buy this report?

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Megatrends

Strategy Briefing

Engage, Return and Repeat: The Subscription Economy

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Changing balance of power amongst consumer goods manufacturers and retailers

Surprise subscription boxes becoming increasingly ubiquitous

Subscribing to regular supplies of goods works best for products which engender brand loyalty

From ownership to access requires attitudinal change

Leasing – a circular future for durable goods

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key findings

What do we mean by the subscription economy?

Subscription models: What’s changed?

The Surprise Subscription Box

Delving into the box

What’s in it for business?

Why do consumers like them?

Passing fad or sustainable business model?

Dos and Don’ts

Walmart Beauty Box: Value and discovery

Avenue A by Adidas: C uration and exclusivity

Graze: Online personalisation to bricks and mortar retail

MightyFix: Single discovery product

Birchbox : The frontrunner branches out to bricks and mortar

And for the contents that don’t measure up: The Aftermarket

Regular Supplies

Convenient and steady

What’s in it for business?

Why do consumers like them?

Are they viable in the long-term?

Dollar Shave Club: The right product at the right price

Amazon Dash Button: Convenience and technology

Peloton: Product and service bundle

Starbucks Reserve: Competes with niche players

Tide Wash Club: Convenience at a price

Target Subscriptions: I ncorporating special offers

ClassPass: Unsustainable pricing strategy

Jet.com abandons subscription model

Short-Term Access

The on-demand economy

Why selling access can be better for business

Why access can beat ownership for consumers

How to overcome resistance to change

An end to business as usual?

Book-n-Drive: A partnership with synergy

Baú verde: Consumer loyalty a prime concern

MUD Jeans: Emphasises ethical credentials

Wassup: Bypassing the washing machine

Long-Term Leasing

Leasing: A n old model revived for the modern age

Which products are most suited to leasing?

What’s in it for business?

Why do consumers lease?

Consumer and operational challenges to overcome

The death of ownership?

Solar City: Affordable and cost-effective

Currys and PC World Upgrade Anytime: Keeping up with latest tech

Bundles: Selling a service in a circular economy

Meublicity: Packs and end of life bargains

Flexirent: Pricing strategy open to criticism

Conclusion

The subscription model is not a one-size fits-all affair

Subscription models generate key benefits for business

The main subscription features valued by consumers include

Flash in the pan or here to stay?

Why buy this report?

Want to find out more about this report?

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