In 2018, a Zuora survey conducted by The Harris Poll found that we were in the midst of a new era defined by Zuora as The End of Ownership. Consumers were less interested in the status and ephemeral personal fulfillment that came from owning things. Instead, they were motivated by a desire for fulfilling experiences that enrich their lives. Consumers want access to valuable services on a personalized basis. We’re witnessing the transformation of consumption for everything from entertainment to food to physical products like cars and clothing. In 2020, Zuora and the Subscribed Institute commissioned The Harris Poll to conduct another international survey on this trend. The latest End of Ownership report shows that the trend towards usership isn’t just intact, but is accelerating. A new, fully digital society is emerging. Everywhere you look — from ecommerce, to connected cars and transportation, to smart medicine and reader-driven news — the world of business is becoming defined by relationships instead of products, in reaction to consumer demand.
Convenience, Cost Savings, and Variety Top the List of Why Consumers Love Subscriptions, According to New International Survey
The End of Ownership Is Accelerating
Why Consumers Love Subscriptions
For all the upheaval wrought by COVID-19, one thing the pandemic has not altered is the momentum we’re seeing from ownership toward usership. The Zuora Subscription Impact Report on the effect of COVID-19 showed that subscription businesses are not slowing down — in fact, in many cases they’re thriving. The benefits of subscriptions have become integrated into our everyday lives. During the COVID-19 pandemic, with life centered around the home amid economic and safety challenges, subscriptions have been a lifeline. Importantly, the benefits of subscriptions aren’t just seen as transactional or incidental. They actually have a cumulative, qualitative effect on building a relationship between brands and consumers.
Consumers have become accustomed to convenience in every aspect of purchasing products and services.
They expect to be able access movies, TV, and music on demand via streaming. They want transportation, whether it’s a car or truck or bicycle, to be available on an as-needed basis, without onerous upfront costs. They want clothing delivered to their home without the need for long shopping trips. And while COVID-19 may have accelerated the trend toward convenience, it was already well underway. The latest End of Ownership survey found that convenience (42%) tops the list of benefits to subscribing to a product or service instead of owning it for international adults. Adults in Spain (53%), New Zealand (50%), the U.S. and Singapore (both 47%), and China (46%) are more likely to see convenience as a benefit (compared to 39% in U.K., 28% in France, 27% in Germany, 41% in Japan, and 39% in the Netherlands). U.K. (39% vs. 33%) and Spanish (53% vs. 45%) adults are significantly more likely to see the benefit of convenience when subscribing this year than they did in 2018.
Consumers have always been attuned to value.
And this desire goes hand-in-glove with avoiding wasteful spending on things they don’t need. Subscriptions give them the transparency and efficiency they need to achieve both goals. Usage-based payments let consumers pay only for what they use. Flexible terms allow consumers to upgrade, downgrade, or cancel services as their needs change over time. And usership means consumers can avoid hefty upfront costs by purchasing products as services. The consumer gets the benefits of the product without the burden of ownership — and helps their spending go further. Singaporean (42%), Chinese, and Italian (both 40%) adults are more likely to recognize the cost savings benefits that come from subscribing to a product/service instead of owning it compared to adults in other countries (35% in U.K. and Australia, 26% in France, 21% in Germany and 29% in the Netherlands). U.K. adults are significantly more likely to recognize the cost-saving benefit of subscribing this year than they did in 2018 (35% vs. 30%)
While there has been concern in some quarters that the proliferation of subscriptions may be causing fatigue among consumers, the End of Ownership survey found the opposite: subscription variety is seen as a benefit.
Consumers see that subscriptions can give them the ability to try out a wide variety of products and services without committing to a purchase, whether it’s a clothing subscription that offers multiple styles and outfits, or car subscriptions that let consumers change car models on a monthly basis. For too long, ownership locked consumers into the product choice that happened to be available, which consumers were then stuck with for years until the product life cycle was complete. The recurrent nature of subscriptions gives consumers continuous variety that would be unimaginable in traditional models — and they’re loving every minute of it. Adults in Spain (46%), China (45%), and New Zealand (43%) are more likely to see this as a benefit than adults in the U.K. (34%), U.S. (36%), France (25%), Germany (29%), Italy (36%), Japan (23%), and the Netherlands (21%). Adults in the U.K. (34% vs. 29%), Australia (39% vs. 34%), China (45% vs. 36%), and Spain (46% vs. 39%) are significantly more likely to recognize the benefit of variety when subscribing this year than they did in 2018.
In many ways, subscriptions are simply about access to goods and services on a rolling basis.
For consumers, that means the latest and greatest product and service upgrades are always at their fingerprints. Think of rolling software updates for Adobe’s Creative Cloud. New models of cars for transportation subscriptions from Porsche. Or the new Taylor Swift album on Spotify. The iterative nature of subscription consumption means that subscribers are always kept up to date. For adults in Spain (42%), New Zealand, and China (both 40%), having access to the latest and greatest is more likely to be seen as a benefit of subscribing compared to adults in the U.K. (29%), U.S. (31%), Australia (32%), France (23%), Germany (24%), Japan (22%), Italy (28%), and the Netherlands (25%). Spanish (42% vs. 34%), Chinese (40% vs. 34%), and Dutch (25% vs. 18%) adults are significantly more likely to see having access to the latest and greatest as a benefit when subscribing this year than they did in 2018
Consumer preferences are evolving.
It’s clear from our survey that ownership is fading away and usership will only become more prevalent in the future. The subscription model will help companies transform their business to adapt to this new reality. The right model will reflect the truth that consumers aren’t simply buying a product, they’re committing to a relationship with your brand. Finding ways big and small to demonstrate that you understand your customer and care about their needs — especially for convenience, value, and variety — will build trust and loyalty over time.