Subscription Economy @Meet Magento Ro 2016
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SUBSCRIPTION ECONOMYDISRUPTING THE TRADITIONAL BUSINESS MODEL
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IULIAN PĂDURARIU
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“It’s about a move from ownership to ACCESS,
from transactional to RELATIONAL.”
RobbieKellmanBaxter,authorofTheMembershipEconomy
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In a post-recession, tech-driven world, companies find a way to play into our need to save time and money
In many cases, a subscription is cheaper than buying a product outright and more customizable to our wants and needs
WHAT ECONOMISTS SAY:
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Due to the ever-increasing availability of products, the need for instant gratification is growing.
Consumers are now accustomed to receive instant access to a product or service they require, such as countless songs through online streaming services.
The actual interaction with the product or service activates the reward system in the brain controlled by the neurotransmitter, dopamine.
WHAT PSYCHOLOGISTS SAY:
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SUBSCRIPTIONS
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• eliminate large upfront costs
• enable consumers to try or experiment a wide array of products and services
• save time to customers
• eliminate friction on repeat business
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KEY FINDINGSZUORA STUDY IN UK
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A NATION OF SUBSCRIBERS• Four in five people across the UK
have at least one subscription service.
• Subscriptions are increasingly popular in other aspects of consumer life, including gaming, dining, transportation and retail
80%
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A MILLENNIAL SHIFT• 76% of younger consumers
(16-24) have subscriptions,
• a significant importance on the convenience of not having to regularly buy products
• have instant access to what they need.
76%
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EXPERIENCES OVER OWNERSHIP
it’s important that they can upgrade and renew the products they use
it’s important to gain instant access to the things they want
it’s important to discover new things based on my personal preferences
63%
62%
64%
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BARRIERS TO ADOPTION
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NEGATIVE CONSUMER PERCEPTIONS
concerned about potential difficulties when trying to unsubscribe
fear increases in price or changes in the products or services offered
don’t like being limited to certain products within the subscription
47%
35%
47%
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TRENDS
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UNIQUE SERVICES THAT PEOPLE WOULD SUBSCRIBE TO
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CONCLUSIONS
We are shifting into a considerably more modular and granular society.
Fluidity is a key factor in people’s choices and beyond subscription models, you should always be thinking about how your company complies with new consumer mindsets.
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CONCLUSIONSIn the old world (let’s call it the Product Economy) it was all about things. Acquiring new customers, shipping commodities, billing for one-time transactions.
But in this new era, it’s all about relationships. More and more customers are becoming subscribers because subscription experiences built around services meet consumers’ needs better than the static offerings or a single product.
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THANK YOU!
IULIAN PADURARIU
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