SAN MATEO, Calif.--(BUSINESS WIRE)--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.
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 email@example.com.
Please see www.deloitte.com/about to learn more about Deloitte LLP.
Source: Zuora Financial