Trend #2: Subscription as a Business Model

27 Feb 2020

Back in January we made our #9 Top Trend Predictions for 2020.

Prediction #2 was Retail Becomes Subscription.

Our observation was that sustainability-focused consumers are increasingly preferring to rent or swap items, rather than buying them outright.

Our evidence was that brands like H&M is trialling the rental of clothes in its flagship store in Stockholm and Ikea is rumoured to be considering a trial for furniture.  AO already renting out washing machines and Adidas is asking consumers to return worn-out trainers for upgrade to the newest model.

Our conclusion was that the future of retail for products may be to become a lot more like services!

CB Insights have just published a report that suggests this was just the tip of the iceberg …

  • The car industry is being reinvented by brands like Audi, BMW, Cadillac, Jaguar Land Rover, Mercedes-Benz, and Volvo have all introduced subscription-based models
  • The airline industry is being disrupted by carriers like Surf Air and Flyline
  • In-home fitness brands like Peloton, Mirror and Tonal
  • Health and Wellness by FitBit, Sleep Cycle, Headspace and Happify

CB Insights identify 7 categories where subscription models are already having an impact

Implication:  Can you create a service line from your portfolio?  The key advantages will be retaining customers’ loyalty and product relevance.

You can find all #9 Trend Predictions here

Written by  David Goudge