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SUBSCRIPTION SERVICES SOAR
The last decade has seen extraordinary growth in the subscription economy — a trend that is expected to continue .
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top priorities for businesses over the coming year . Contractual models allow organizations to buy what they need now , scale it at the right moment , and enable greater outcomes for themselves and their customers . |
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350 350 % GROWTH
325
300
275
250
225
200
175
150
125
100
2012
2013
2014
2015
Between January 2012 and June 2019 , the subscription economy grew more than 350 %.
Source : Zuora ’ s Subscription Economy Index
500B
450B
400B
350B
300B
250B
200B
150B
100B
350 % GROWTH
2016
2017
$ 478.2 B
2018
2019
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The new standard of service Previously , tech sales centered on specs like power , speed , storage , and , of course , factors like price . Today , customers seek much more — from sustainability in the products they buy to personalization during the purchasing process . In fact , 63 % of consumers expect personalization as a standard of service . Subscriptions offer fit-for-purpose solutions that ultimately help those customers build and achieve better business outcomes .
Case in point : A local retailer might not know the digital capabilities they ’ ll need a year from now . They do , however , know what they must achieve : Turn a profit in three months or risk going out of business . The prioritization of short-term goals by SMBs and larger enterprises alike makes contractual services even more enticing . Need more of something ? Scale up . Need less ? Scale down . With many organizations taking it a day at a time now and closely scrutinizing their balance sheets , flexibility coupled with deeper analytical insight is helping to pave the way for real results .
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50B |
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2019 |
2020 |
2018
2019
2020
The global subscription ecommerce market is anticipated to reach market valuation of $ 478.2 billion by 2025 , from $ 13.2 billion in 2018 .
Source : UnivDatos Market Insights
2021
2022
2023
$ 478.2 B
75 % of organizations that sell direct to consumers will offer subscription services by 2023 .
Source : Gartner
2024
2021
84 % of American consumers subscribe to at least one service .
Source : Marketing Charts
2025
2022
2023
2024
2025
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The new era for data-driven partnerships Besides flexibility , one of the greatest benefits of the subscription economy is that it brings the customer closer to vendors and partners . As we go to market with new solutions , knowing the customer well is essential . I call these deep relationships a segment of one — the ability to use data and insights to hyper-target and create unique value propositions for any singular customer . In fact , 49 % of companies are seeking data analytics “ more or much more ” to help navigate COVID-19 , and 55 % are using data to predict business outcomes .
Whether it ’ s a restaurant building an app for contactless delivery or a multinational enterprise reinventing its digital strategy , I believe that deep , data-driven partnerships built on contractual relationships will define our mutual success . The end of ownership and the dawn of partnership couldn ’ t arrive at a more critical time . Trends come and go . What carries organizations and individuals through turbulence is the strength and authenticity of their relationships , now backed by powerful technology .
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HP / INNOVATION / FALL 2020 7 |