The rise of the subscription economy
More and more, today’s consumers are seeking shopping experiences that are tailored to their preferences and delivered directly to their doors. The confluence of these trends has resulted in the emergence of the subscription economy.
Subscriptions are becoming a more common way to buy products and services online and receive them regularly. This subscription trend goes hand in hand with consumers’ search for great and seamless end-to-end shopping/purchase experiences. Consumers, especially young urban consumers, are willing to spend more on a product or service that delivers a tangible benefit along with highly personalized offerings.
One of the most popular subscription services is the one that offers curated products for consumers, which could range from meal kits customized to match your diet plans, to boxes with clothes styled based on your preferences. Consumers receive a variety of products which most likely will fit their preferences, without having to choose for themselves and do the actual shopping.
Subscription services may also provide consumers with convenience and access. The convenience factor is more for products that consumers are more likely to need on an ongoing basis, such as dog food, razor blades, and even baby diapers. And those who subscribe for access are usually presented with special offers or members-only perks.
What does this mean for businesses?
Subscription business models are becoming the norm. Approximately 70% of business leaders say that this model will be the key to moving forward, and it applies to a variety of industries.
By 2022, predictions show that the car subscription market will grow by 71%. In the software industry, all new entrants and 80% of existing providers are offering subscriptions. Almost 70% of households have a subscription to one or more video subscription services. And the list goes on.
For businesses that may consider adopting the subscription business model, they need to realize that the consumers’ purchase journey and buying triggers are different. Not only that, one of the biggest challenges for this model is the churn rate. By having a deep understanding of their consumers, businesses will be able to deliver valuable products or services that will drive retention.
How can we help?
ADK INSIGHTS combines both quantitative scale and qualitative exploration of the rational and emotional factors to validate consumers’ ideas, habits, and wishes. We design the best methodologies to meet the insight objectives of our clients – advising them on WHAT questions to ask, WHO to ask, and HOW to ask most effectively.
To find out more about our experience and how we can help, please contact Rob.