Our pan-European survey “Europeans and the subscription economy: What impact on payment methods?” shows that subscription economy has become a part of everyday life for many consumers. The latter, although little aware of the magnitude of this revolution in their behaviour, are open to subscription consumption in sectors that may seem surprising.
In order to understand the reasons behind the success of this trend, let’s get back to the great advantages offered by this way of consumption.
1 – A mode of consumption adapted to new expectations and constraints of consumers
Consumers seem to be moving away from the need of owning goods in favour of “usage and benefit”, through products rental or subscription to services. For example, for city-dwellers, is it really more practical and advantageous to own a car? Or would it worth it to rent one or call occasionally a car-service? Many of us wish to be in possession of smartphones. But these are expensive (up to 900 euros) for a limited lifetime. So why not renting it and change it every year? We are fond of audio and video content that is consumed in bulk and from several electronic devices. What is the point of accumulating CDs and DVDs of all kinds while streaming services offer access to unlimited libraries of content and renewed?
All these examples show that subscription reflects our new lifestyles.
2 – Spread expenses over the time
Let’s go back to the example of the smartphone. Two options are now available to consumers:
- Rent the device for a few euros a month with a replacement of equipment every year and a hyper-efficient customer service.
- Buy it at a high price in one shot, with a limited time guarantee, insurance to pay and a planned obsolescence obliging to buy a new device… again at a high price.
The first option makes it possible to regulate the outflows of money and spread them over the long term!
3 – Packages according to consumers’ needs and means
Still related to idea of controlling expenses, merchants are stretching their imagination to propose formulas which adapt to the needs of the consumers but also to their financial resources. If my monthly budget in terms of entertainment cannot exceed a certain amount, I can move towards a limited offer and add additional options later, when the state of my finances, will allow me.
4 – Unsubscribe at any time
Uber, Netflix, Spotify… These companies offer to subscribe to a service without any commitment from the consumer. No more contracts of 12, 18 or even 24 months. The trend is for complete freedom to subscribe and unsubscribe, which is a good reason to be tempted to discover and test new services without fear of regretting the choice.
5 – Merchants attentive to the added value of the service or product
A subscription with no obligation represents, on one hand, an advantage for the consumer, and on the other hand, is a real challenge for the merchant. The latter must constantly improve its product or service to avoid churn. Technological innovations and satisfaction surveys are therefore required! The advantage of initial freedom of the consumer is then doubled by the insurance of an efficient service and in continuous evolution. Which channel will offer the best sports programs? Which GPS application will offer the most up-to-date and accurate maps? The consumer asks himself these questions before any purchase. It is up to the merchant to make sure the answer is unequivocally and in favour of its offer!
