EaaS. Everything as a Service.
We are in the middle of a global change in the way we consume and the way we do business.
According to McKinsey, the subscription e-commerce market has grown by more than 100% a year over the past five years. The largest such retailers generated more than $2.6 billion in sales in 2016, up from a mere $57.0 million in 2011. And this is happening in a wide variety of industries, from video-streaming and news to file sharing and fashion. Subscriptions are an increasingly common way to buy products and services online.
And if this seems big, imagine that you can now add a luxury Volvo to your list of monthly subscriptions.
Having a Netflix subscription allows you to access an incredible amount of content in an instant. It is quite remarkable and so much better than hunting down DVDs in different stores. Therefore, as long as you are paying, the door is open. But then… once you end your subscription, you go back to square one without owning anything. For some services, that might have a detrimental effect on your life (tied to how you make a living) and for some it might not matter much (yes, you could survive without Netflix), so be mindful of what is worth owning versus renting.
Consumers do not have an inherent love of subscriptions. If anything, the requirement to sign up for a recurring one dampens demand and makes it harder to acquire customers. Rather, they want a great end-to-end experience and are willing to subscribe only where automated purchasing gives them tangible benefits, such as lower costs or increased personalization.
The subscription e-commerce market is growing quickly. For consumers, subscription products or boxes offer a convenient, personalized, and often lower-cost way to buy what they want and need. Companies in the space must develop great experiences (as opposed to great subscriptions) to avoid high churn rates and to accelerate both growth and profitability.