Apple may be ramping up its Services with Apple TV+, Apple Arcade, and Apple News+ along with Apple Music just in time. Zuora, Inc., a cloud-based subscription management platform provider, has released the findings of an international survey that found that subscription services are experiencing growth on a global scale as consumers around the world overwhelmingly prefer access to what they need and freedom from the burden of product ownership.
The results of the international survey of 13,459 adults, across 12 countries, conducted online by The Harris Poll on behalf of Zuora, suggest we are witnessing a new commercial era defined by “the end of ownership.” As concepts of status and personal fulfillment are rapidly shifting away from material wealth in favor of engaging experiences, consumers around the world are increasingly demanding fluid services over static products.
Driven by a new consumer imperative that favors “access over ownership,” vast sectors of the global economy are transforming themselves with pay-as-you-go subscription models. Commercial goods such as food, clothing and transportation are being reimagined as utilities to leverage where and when as needed, much like water, gas or electricity is consumed today. We are in the nascent stages of a World Subscribed.
“We’re witnessing the end of ownership and the rise of usership. We believe people are subscribing to more because they’re getting the outcome and experience they’re looking for, without the burden of owning it. There has been a substantial increase in overall number of global subscribers from just five years ago, and we expect the Subscription Economy will continue to grow,” said Tien Tzuo, CEO and Founder of Zuora.
Consumers have more subscriptions today than ever before and believe they’ll add more in the future. In fact, 71% of adults across 12 countries have subscription services, up from roughly half (53%), who had them five years ago.
Roughly a quarter of international adults (26%) report they have three or more subscriptions compared to only 14% who had three or more 5 years ago.
74% of international adults believe that in the future, people will subscribe to more services and own less physical goods.
And just two years from now, 34% of international adults believe that they will be taking advantage of more subscription services.
Product ownership is a thing of the past as adults want to declutter their lives as owning things no longer defines a person’s status.
68% of international adults believe that a person’s status is no longer defined by what they own.
70% of international adults agree that subscribing to products and services frees people from the burden of ownership (e.g., maintenance, clutter, declining value).
57% of international adults wish they could own less “stuff.”
The businesses who adapt to this shift in buying behavior are growing faster and making more money. Over the past seven years, companies across North America, Europe and Asia Pacific, have seen their subscription-based sales grow by more than 300%, representing an 18% compound annual growth rate. That’s about 5 times faster than S&P 500 company revenues and U.S. retail sales, according to the Subscription Economy Index (SEI).
While the global trend of owning less and using more is consistent across the globe, the reasons why differ country by country. This study explores the preferential differences and insight into changing behaviors as the world shifts from product ownership to subscription services.
What’s more, Charles Trevail, CEO of Interbrand said, “Subscriptions are a top growth driver for companies today. The total value of the top 100 global brands coming from subscription-based businesses has doubled since 2009, according to Interbrand’s Best Global Brands report. Aligning a company’s business model to the buying behavior that consumers demand is critical to achieve high brand affinity.”
You can Download the full “End of Ownership” report here.