As discussed in the The rise of edge banking in the era of digital commerce, all commerce is turning digital, simply because it allows for more efficient sales processes. In this context, it also makes sense for companies to review their go-to-market model related to recurring sales, and many conclude that moving towards subscription based relationships with their customers is the way to go.
The subscription economy is defined as a model where customers pay a recurring fee at regular intervals (weekly, monthly, yearly, or just based on a customer’s usage) to access a product or service.
This phenomena is not limited to the consumer market with the likes of Spotify offering their subscription streaming services, but instead is spreading across nearly all industry verticals. For instance Technology with TietoEVRY offering software-as-a Service solutions instead of packaged software, Media where Schibsted had to shift from advertising-heavy revenue streams to monetize subscriber relationships, the Automotive industry with Volvo Cars moving from selling cars to offering Mobility-as-a-Service, CPG (Consumer Packaged Goods) where Husqvarna has launched a pay-per-use model for lawn mowers, or the Insurance industry which is also aiming at pay-per-use schemes.