The trend of pay-as-you-go subscription models or the end of ownership
The study conducted by Harris Poll for Zuora provides information on subscription consumption habits around the world.
The study reveals that the world is evolving towards the end of ownership. Personal fulfillment is rapidly shifting away from material wealth in favor of engaging experiences. Consumers want flexible services rather than static products.
Access to a service is preferred to ownership: sectors of the global economy are transforming themselves with pay-as-you-go subscription models. Traditional sectors such as food, clothing or transport are being rethought to evolve towards the marketing of services.
Companies that adapt to this shift are growing faster and are more profitable. For example, companies in North America, Europe and Asia have seen their subscription-based sales increase by +300%, representing an 18% CAGR (Compounded Annual Growth Rate). According to the Subscription Index®, companies that sell by subscription are growing five times faster.
The global trend of owning less in favor of more consistent usage is confirmed.
Worldwide, 74% of the consumers believe that in the future, people will subscribe to more services and own less physical goods. Product ownership is a thing of the past. People want to declutter their lives as owning things no longer defines a person’s status.
70% see subscription as the solution for the burden of ownership (maintenance, clutter, declining value).
The end of ownership
Nearly 76% of consumers think that for most people owning things is a way for them to show off their wealth. 68% of consumers think that a person’s status is no longer defined by what they own.
For 2/3 of people (74% in France), what a person own is not a good measure of one’s success.
During the survey, less than half of the respondents say that if they subscribe to something, as opposed to owning it, they feel like they would be missing out on the status of owning it.
Thus, subscription consumption is ideal for consumers who are looking for an experience without having to own it. Given the global desire to own less, it is no surprise that 74% of consumers believe that in the future, people will subscribe to more services and own fewer physical products.
74% of consumers are willing to subscribe rather than to own, for the same but less expensive result. 70% of consumers recognize that subscription liberates from the burden of ownership (maintenance, clutter, declining value).
Nearly three in five of consumers feel that subscribing to products/services gives them a sense of freedom (59%), and that it would be more important for them to have flexibility/freedom in the products/services they use than to own them (58%).
Aside from cost and freedom, another benefit often associated with subscription services is exclusivity, and two-thirds of consumers (67%) like the idea of having access to exclusive content/products/services they wouldn’t normally be able to get without a subscription service.
The subscription model is growing strongly around the world.
Worldwide, more than seven in ten consumers (71%) currently have subscription services. Among consumers who have subscription services, they subscribe to 2.7 services on average.
While seven in ten consumers subscribe today, only about half of consumers (53%) had subscription services 5 years ago.
Subscription use will continue to increase over the next few years. Overall, a third of consumers (34%) believe they will be using more subscription services more 2 years from now.
A majority of consumers (58%) expect their subscription service usage will remain the same 2 years from now.