Consumers around the world prefer access to
services over owning products as the Subscription Economy grows
Zuora, Inc., (NYSE: ZUO), the leading cloud-based subscription
management platform provider, today released the findings of an
international survey* which 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.
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Product ownership is a thing of the past.
68% of international adults believe that a person's status is no
longer defined by what they own. (Graphic: Business Wire)
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 7 years,
companies across North America, Europe and Asia Pacific, have seen
their subscription-based sales grow by more than 300 percent,
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.
Furthermore, 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.”
On consumer behavior, Daniel McCarthy, Professor of Marketing
at Emory University's Goizueta School of Business said, "While
there are many reasons why people derive value from
subscription-based relationships, the ease and convenience of an
ongoing service and spending less money to access it are two of the
most compelling and durable reasons they subscribe. This one-two
punch can be great for consumers and great for the businesses
providing them the goods and services."
And specifically on streaming services, Kevin Westcott, Vice
Chairman and U.S. Telecom and Media and Entertainment Leader at
Deloitte LLP said, “Our Digital Media Trends survey found that
consumers want original content, the ability to piece together
their subscriptions for the optimum experience, and the most value
possible out of the money they are spending. The notion of a
Subscription Economy, where consumers can pause, cancel and restart
their subscriptions, enjoy varied pricing options by usage, and
manage content volume could be an interesting solution to the
frustration consumers have with the growing number of video
subscriptions and services now required to watch what they want and
when.”
On the future of the Subscription Economy, R "Ray" Wang,
Principal Analyst & Founder of Constellation Research,
Inc., said, “The transformation from products to experiences
has vastly changed how every enterprise and brand must design their
business models. This shift from ownership to subscription will
have the largest impact on the future of business over the next
decade. Expect brands to move from brand promises to activating
movements.”
Download the full “End of Ownership” report here.
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management
platform that functions as a system of record for subscription
businesses across all industries. Powering the Subscription
Economy®, the Zuora® platform was architected specifically for
dynamic, recurring subscription business models and acts as an
intelligent subscription management hub that automates and
orchestrates the entire subscription order-to-cash process,
including billing and revenue recognition. Zuora serves more than
1,000 companies around the world, including Box, Komatsu, Rogers,
Schneider Electric, Xplornet and Zendesk. Headquartered in Silicon
Valley, Zuora also operates offices in Atlanta, Boston, Denver, San
Francisco, London, Paris, Munich, Beijing, Sydney, Chennai and
Tokyo. To learn more about the Zuora platform, please visit
www.zuora.com.
About The Harris Poll
The Harris Poll is one of the longest running surveys in the
U.S. tracking public opinion, motivations and social sentiment
since 1963 that is now part of Harris Insights & Analytics, a
global consulting and market research firm that delivers social
intelligence for transformational times. We work with clients in
three primary areas; building twenty-first-century corporate
reputation, crafting brand strategy and performance tracking, and
earning organic media through public relations research. Our
mission is to provide insights and advisory to help leaders make
the best decisions possible. To learn more, please visit
www.theharrispoll.com
© 2019 Zuora, Inc. All Rights Reserved. Zuora, Subscribed,
Subscription Economy, Powering the Subscription Economy, and
Subscription Economy Index are trademarks or registered trademarks
of Zuora, Inc. Third party trademarks mentioned above are owned by
their respective companies. Nothing in this press release should be
construed to the contrary, or as an approval, endorsement or
sponsorship by any third parties of Zuora, Inc. or any aspect of
this press release.
*This survey was conducted online by The Harris Poll on behalf
of Zuora between October 26 - November 4, 2018 among 13,459 adults
ages 18+ in the U.S. (n=2,013), the U.K. (n=1,013), Australia
(n=1,040), China (n=1,037, France (n=1,050), Germany (n=1,057),
Italy (n=1,070), Japan (n=1,055), the Netherlands (n=1,052), New
Zealand (n= 1,012), Singapore (n= 1,022) and Spain (n=1,038). This
online survey is not based on a probability sample and therefore no
estimate of theoretical sampling error can be calculated. For
complete survey methodology, including weighting variables and
subgroup sample sizes, please contact press@zuora.com.
Please see www.deloitte.com/about to learn more about Deloitte
LLP.
Source: Zuora Financial
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version on businesswire.com: https://www.businesswire.com/news/home/20190429005110/en/
Press ContactJayne Gonzalezpress@zuora.com408-348-1087
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