The subscription model: yay or nay?
Take a second to count all the monthly subscriptions you have going on. Chances are the list is long. And yet, not that long ago, you could probably count your subscriptions on one hand: TV, Internet, mobile phone, and maybe a few newspapers or magazines!
Subscriptions are integrated into every aspect of everyday life
The COVID crisis accelerated the subscription trend: 37% of Quebecers increased their subscriptions in the past two years. Globally, we’re talking more than 2.2 billion active subscriptions. And businesses everywhere are getting onboard:
- last year, Couche Tard launched a subscription-based formula in its American stores, offering a beverage a day;
- internationally, more and more restaurant chains are developing subscription-based formulas.
Source: Telecoming, L’économie de l’abonnement, Subscronomics Report 2021
In terms of subscriptions, the younger generations are definitely more active. On the meal kit market, for example, Gen Zs and Millennials represent 63% of subscribers in Quebec.
For consumers, the advantages of subscriptions are many
From ownership to the user experience
If the younger generations are ambassadors for this model, it’s mainly because it’s intrinsically digital and gravitates around mobile apps. But that’s not the only reason. New values related to consumerism are also propelling the subscription market. Today, ownership no longer defines social status—the user experience and service quality do.
The subscription economy is revolutionizing business models
Source: Zuora via Tekdeeps Subscription Economy: the end of ownership, December 2021
The subscription model: the new paradise for brands?
Faced with consumers who are hyper-connected and hyper-informed, client retention has become quite complex. The situation is impacting the profitability of traditional business models. For many companies, the subscription model represents a unique opportunity that allows them to:
- maintain a relationship with the customer over time;
- generate a regular flux of revenue;
- continuously collect customer data.
The media entertainment universe is dominating the subscription market
Source : Telecoming, L’économie de l’abonnement, Subscronomics Report 2021
And what comes after the subscription model?
Additional source: Vividata survey, Fall 2021, Québec, 14+.