5 minutes, by Erika NT
There is so much to unpack when it comes to subscriptions that we needed to do a two-parter. The intention of this article is to focus on how the subscription model is changing in each industry over time.
A new day: The age of subscriptions for every need
Our needs for subscriptions are shifting from being a luxury item to more of daily, practical needs. It's a way to streamline our daily routines from the content we digest in the background, like music or podcasts, to the very food we eat or workout programs we become a member. Just remember to keep track of the charges impacting your account or what you're allowed to share.
What are some more examples of industries and companies that are scaling with disruptive subscription marketing?
Music & podcasts
- Apple Music
- Amazon Music
- SiriusXM Select
- Elder Scrolls Online
- Final Fantasy XIV
- Dragon Quest X
- StarWars: The Old Republic
- EverQuest 2
- Trade Coffee
- Blue Apron
- Misfits Market
- Martha & Marley Spoon
Refills / auto-refills
- Amazon Subscribe & Save
- Dollar Shave Club
- Organic Bath Co.
Monetizing free services
Snowsports or gym memberships
- Snowsports Industries America
- The Snow Pros
- Planet Fitness
- 24-Hour Fitness
- Life Time
Even the education system is catching on
Learning subscriptions are another online educational model where individuals can subscribe to a service usually by paying monthly or yearly. While tuition isn’t new, and student loans have been on a recurring payment model for decades, ed tech services or supplemental tools have thrived in recent years.
Upwork, a virtual hub for remote freelancers, compiled the top 30 sites for online education and learning here if you’d like to check out more examples beyond Udemy, which we mentioned briefly earlier.
Insurance services are starting to explore unbundling as well
However, the pandemic certainly brought about its unique challenges to the industry. EY Nextwave Consumer Financial Services’ research uncovered that 51% of US consumers in the 35-49 years demographic are interested in subscription models for health insurance packages, specifically for spouses or children. This was described as adding or removing sub-services, like insuring a trip or adding a family member if they lose their job without waiting for annual cycles.
On the horizon: Horizontal marketing
The pandemic forced us all to digitize our lives. Almost immediately, the world was booming with virtual meetings and online shopping. We have access to EVERYTHING under the sun from the inside of our homes. Pun intended. As discussed, subscriptions championed the market with a 91% increase in 2020. No big deal.
With all of the changes currently taking place in nearly every industry, what does this mean for subscription trends? How will subscription offerings and spending patterns evolve over the next few years from both business and consumer standpoints?
From ownership to usership
- Sharing economy
- Rent the runway or clothing
- Laundry services
- Car and gas subscriptions
- Food and grocery subscriptions
- Furniture (Oliver Space, Feather)
- Increased subscription bundles (gym pass memberships, in-home setups/utilities)
- Increased rentership instead of homeowners
Considering complete customer journey: horizontal marketing
While there is a laundry list of hardships that arose from the pandemic, one pretty neat and interesting effect in the land of marketing was the bridge from user to consumer. Executives are now zooming out and seeing consumers through a different lens, considering their entire customer journey and rewarding the individual (holistic) versus a customer in, customer out sales process (vertical.) The user experience between each and every subscription is organically connected and peeling back the consumer avatar means getting to know your target audience better and serving their specific needs.
Impact of subscription on consumer spending
- From current level to 2026 prediction (I’ll do this by working backwards)
- Impact on financial planning
- Impact on merchants - likely more subscriptions either in-advance of use (traditional, or Kohls with a subscription) or credit with installments (buy now pay later trends)
This is a lot to munch on, right? Subscription intelligence combines real-time insights of subscription data to improve business outcomes. As a business owner, here’s what’s most important to know:
Leaning into a horizontal model rewards individual preference, customizable options and makes your services or products more attractive to a consumer. Combining your offerings into a unified ecosystem builds consumer confidence and trust that will become the backbone of your e-commerce growth.
What are some ways that you’ve seen your business, or even your preference as a consumer, focus more horizontally since 2020? We’d love to hear, swap ideas and discuss.