Subscription Economy: Between Fears and Desires — Transforming every industry, one monthly payment at a time — Part 1

Welcome to the blog series investigating the booming subscription economy and how it affects you and your business.
Split into 3 pivotal areas, we will look at:

  • Part 1: Introducing the subscription economy and the reasons why consumers love subscriptions

Let’s begin by exploring the subscription economy.

Part 1 — Introducing the subscription economy and the reasons why consumers love subscriptions

When I think about ‘subscription’, the first thing that comes to mind is the Harvard Business Review I used to receive while a student at university. It was my first subscription, one I eagerly anticipated every month. The feeling I had discovering what new things were happening beyond the boundaries of my own little world, breathing in the exciting changes as I read through international stories, case studies, trends and insights that will remain with me, always.

What was once limited to a specific type of industry, media, has now become a popular business model that is touching literally every industry: from groceries to cosmetics, from toiletries to toys, from mobility services to retail, from video streaming to music and last but not least, heavy machinery and financial services. To comprehend the dimension of this phenomenon, consider this number: 89% of Brits are subscribed to at least one subscription service and that doesn’t include utility providers[1].

Traditional businesses have been challenged by the rise of the subscription economy. Stories of Dollar Shave Club, Netflix or Spotify have already made it onto the business case studies shortlist for MBA students after creating significant pain for the executive board of their longstanding competitors.

“The reality is ownership is dead; now it’s really about access as the new imperative.”Tien Tzuo, CEO & Co-Founder of Zuora, a platform for the subscription economy.

Why consumers love subscriptions

People don’t actually like subscriptions, but they do like a fulfilling end-to-end experience. Add to that, greater personalisation and a more meaningful set of benefits, and the subscription model starts to stand out as the better option in the consumer’s perspective.

The world of commerce is continuously changing, companies cannot afford to stand still. New channels and methods open up new opportunities, consumer expectations have changed and are continually evolving, businesses are seeking new ways to capture consumer loyalty by focusing on long-term relationships.

Essentially, a great shopping experience is a must-have, not a nice-to-have, and the shopping experience in the subscription economy is an even greater one with consumers being offered continuous value, memorable experiences, accessibility anytime and anywhere, instant fulfilment and, above all, a personalised service.

Top reasons why consumers love subscription experiences

  1. Convenience. Take the example of Amazon Subscribe & Save — consumers can schedule regular deliveries of everyday ‘shopping list’ products, from nappies to toothpaste to dog treats — direct to the door when they need them.

In conclusion

Current subscription companies appear to be hitting the spot with consumers as the subscription eCommerce market is growing rapidly, recent years showing a growth of more than 100% year on year.[2]

Every day, we see the evidence that more and more industries are being transformed by the subscription economy. A business model that, in my university days, was once accustomed only to media, has now become a reality spreading across the entire business world, and growing almost daily.

In Part 2 of the subscription economy blog series, we’ll investigate some of the fears that immobilise managers from making the subscription shift, how churn rates can quickly drain cash reserves, and some of the specific KPIs a true business leader must follow to achieve success.

This article was created and written by Luigi Matrone — CEO & Founder of the eBusiness Institute.

At the eBusiness Institute, we have extensive experience of working with numerous brands on their digital transformation. We understand the importance of an optimised consumer experience to drive your brand’s sales online and offline. to learn more about how we can help you.



Originally published at on May 20, 2019.



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