Recent years have seen a definite change in the way consumers view ownership of assets. Survey by The Harris Group, for example, targeted people across the world. One notable result was that 57% of respondents declared they would to ‘own less stuff’.
Part of the change has been driven by the growth of what is known as The Subscription Economy. Put simply, people are owning less and subscribing more. Ownership, it seems, is no longer an important factor in the lives of the younger generations, something we will talk about in more detail shortly.
In this article we look at 5 trends that are current in the Subscription Economy, and why they are important to the future of commerce.
How Status is Defined
Material assets no longer define a person’s social status. Whereas 20 years ago owning a nice car was essential to ‘keep up with the Jones’s’, this is no longer the case. What has changed in those 20 years? Quite simply, the Internet came along and brought with it social media.
Check the pictures from those you follow on your Instagram feed. Many are records not of personal assets, but of rewarding experiences: a good meal, for example, or a holiday destination, perhaps a sporting event. The modern consumer is interested not in owning things, but in doing things. We are facing the demise of the ‘pay per product’ market where owing something defines who you are.
Following on from the above, it’s clear that for the younger generations ownership of items that would previously have been undertaken without a thought is now less of an interest. We mention above that people want to own less stuff. Yet, that doesn’t mean they want to do less — quite the opposite, in fact.
For example, car ownership: sales are down year on year by notable percentages, yet miles driven continue to rise. People are moving away from expensive assets such as the motor car and joining car share schemes among other similar subscription solutions. The car is no longer a status symbol, it’s where it takes you that is important.
Lessening the Burden
We can see that the overall main trend is a move away from the concept of ownership, and this has many benefits. A car, as mentioned above, is an expensive asset to purchase and maintain. The modern consumer would rather spend that money on going places and doing things.
There is also a sense of ownership being a burden. If you own an expensive asset, it is your duty to maintain it and care for it. If you lease an apartment it may come with a maintenance contract — another example of a popular subscription service.
Yet the Subscription Economy does not only reach out to expensive items. Newspaper sales are down, yet digital newspapers are doing great business. The same with physical magazines, which can now be read on a tablet or phone. This type of subscription services is become ever more popular with a generation who enjoy moving around.
Growing Subscription Options
A definite trend in the Subscription Economy can be seen in the many new subscription services that are being launched. A growing area is home meal delivery, in which the consumer pays a subscription and gets ready meals delivered on a regular basis. The common consumer for this is the family with busy working lives.
Among the biggest subscription markets is that of music sales. Rather than buy CD’s or download music, consumers are subscribing to services that supply regular digital music streams to their taste. In a recent survey, some 74% of consumers believed that subscription services would become more commonplace in the future.
Increase in Subscribers
The final notable change is the continuing increase in the numbers of consumers choosing subscription over ownership. A survey of people across 12 countries found that more that 70% subscribe to at least one service, a figure that was just 50% five years ago. This is certain to rise as consumers strive to reap the benefits of subscriptions over the burden of ownership.
Are we seeing, as many industry commentators have proposed, the ‘death of ownership’? We wouldn’t go quite that far just yet, but there is definitely a noticeable move towards subscribing in a wide number of market sectors. For businesses still operating in the pay per product market, it may be wise to investigate potential subscription models to appeal those consumers who prefer to subscribe.
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