#BYMEspresso☕: Are Subscriptions the Future Business Model?
A study found that 95% of companies have some sort of subscription offering, reflecting that new and younger companies are more likely to embrace the subscription trend.
A study found that 95% of companies have some sort of subscription offering, but there are distinct differences between the kinds of companies that embrace subscription options. For example, 86% of companies with subscriptions are less than 10 years old, and 79% of companies with subscriptions have yearly revenues of more than $500 million.
These distinctions likely reflect that new and younger companies are more likely to embrace the subscription trend. Alternatively, big brands can generate revenue from subscriptions without damaging their bottom line if it goes wrong, allowing experimentation.
As e-commerce continues to grow and consumer behaviours shift, brands willing to leverage subscription offerings with existing customers can reap the benefits or take calculated risks in the future and find themselves in a better position.
The 2020 edition of the Subscription Economy Index found that while some businesses have decreased sales, “Subscription businesses actually expanded at a rate of 12%.”
And, while e-commerce may be the star this year, services like streaming and publishing have seen success during the pandemic, highlighting the move to more online use for so many consumers.
We understand that subscriptions bring value and convenience to consumers. They offer digital advertisers first-party data about their customers and future opportunities to target and increase engagement, but what about customers who have to buy each subscription only to use it for two or three things?
It doesn’t make much sense, right? And is the subscription model (monthly) the only solution, or are other companies doing better and still profitable?
In this week’s #HopefullyMarketing podcast, Shashank and Rakshit went into another ranting mode where they discuss why they have to pay for everything when they just consume only ⅓ of the whole thing. Don’t forget to tune in!