Ankur Nandu, director of ecommerce, Chargebee
Retail has gone from “there’s an app for that” to “there’s a subscription for that.” Services such as Dollar Shave Club for razors, BarkBox for pet products, Stitch Fix for fashion and Blue Apron for daily meals are just a few of many examples of the pervasiveness of companies that were founded to meet today’s subscription lifestyle.
With the abundance of choices, however, managing individual subscriptions, passwords, renewals and payment information for your daily newspaper, food delivery, movie package, laundry or weekly cleaning can be a challenge for consumers.
As more businesses across multiple industries continue to turn to subscription models, an opportunity in the subscription ecosystem has developed for a platform that can aggregate and streamline these exploding number of options for users.
Apple already does it for its digital services such as Apple Music and Apple Books, and recently expanded its subscription services with Apple News+, a subscription service for news and magazines. Amazon does it as well for its music services, subscriptions to hard goods such as diapers or soap, print magazines and third-party TV networks such as Starz and HBO. As the industry continues to mature, however, we will see further efforts to optimize and streamline subscription services across brands and verticals.
Bundling is one example of how the market is already moving in this direction. The New York Times has subscription bundle options, which include one with the streaming music brand Spotify and another with the subscription books service Scribd. There are other examples—Hulu offers a subscription bundle with Spotify, while subscribers to Google Play Music get a subscription to the ad-free YouTube Premium at no additional cost.
Seemingly non-related services bundle subscriptions in other countries as well. In India, for instance, the streaming video service Eros Now bundles with the grocery delivery service Grofers, as well as Gold’s Gym, in an effort to drive more revenue.
What will subscription consumption 2.0 look like?
Platforms such as Yelp—which already hosts pages for businesses in verticals including restaurants, hospitality, automotive and a range of home services—is a prime candidate to aggregate subscriptions of goods and services. It can address the issue of subscription fatigue and deliver a streamlined approach to subscription consumption.
Consumers would benefit from a hub that manages multiple types of subscriptions. For example, if a consumer has 10 or 12 subscription services of various kinds, including physical goods, digital entertainment (music or video) and news, it could be easy to lose track of how much they are paying for subscriptions on a monthly or quarterly basis, as well as how much they are actually consuming. A unified view that includes all of this info in one easy-to-read place would provide a great deal of value.
Such a system could offer simplified payment and subscription management as well. For example, if the consumer is going on vacation for an extended period, the system could allow them to quickly pause and restart their various subscriptions. This would prevent them from spending money on unused services during that period.
A subscription hub would also help consumers discover relevant new services, and could help aggregate discounted services for bundling subscriptions.
Subscription businesses would benefit as well from aggregated hubs. They would gain access to new customers as consumers discover new services, potentially increasing revenue. They could also test a variety of business models, including bundles with partner companies or various plans or tiers of service.
There are some technical challenges that would need to be addressed before this next generation of subscription consumption comes to fruition. Whatever company aggregates the subscriptions would first need to integrate with service providers, and some may not be willing to open up their APIs.
The subscription paradigm shift is nearing
Subscription services are on the rise, delivered by thousands of businesses across many markets. While they are undoubtedly convenient and flexible delivery models for consumers, we have now reached a tipping point in which it is increasingly difficult to manage many different subscriptions effectively.
As the subscription ecosystem matures, there’s an opportunity for companies to capitalize on emerging subscription fatigue and help consumers efficiently manage multiple subscriptions across a wide variety of goods and services. This would power new consumption patterns and possibly create added demand as consumers browse for and incorporate services that satisfy their wants, needs and lifestyles.
Chargebee provides subscription billing and recurring payment software.
Favorite