The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Subscribing to regular supplies of products can offer the ultimate in convenience for consumers, and a secure revenue stream for business. It 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.
There are also good opportunities to use the model to disrupt a category by offering low-price versions – such as Dollar Shave Club has done with razors.
On the other hand, we have seen Starbucks embrace the subscription model as a way of premiumising its brand and enabling it to embrace third-wave coffee – high quality coffee normally associated with independent cafés.
With pros for consumers and brands alike it’s easy to see offering a subscription to regular supplies as something of a win-win. However it poses many challenges:
Euromonitor’s new Strategy Briefing: Engage, Return and Repeat: The Subscription Economy explores all aspects of the subscription model. 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.