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.
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 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 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.
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 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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