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August 18, 2021 | Authored by: Nelson Veiga

It’s planning season: where will subscription innovation happen next?

Subscription services have been around for years now, and many that you’re familiar with probably relate to entertainment. Video streaming, food delivery, makeup boxes and more are thriving in the subscription model space, influencing every part of a person’s lifestyle and available options. The effectiveness of the subscription model for garnering revenue in the entertainment and OTT industry is shown through the prevalence and success of streaming subscriptions in households over the recent decade.

However, there’s opportunity for nearly any industry to get involved in the world of subscriptions. HelloFresh, a company a decade younger than Netflix, has reached global sales growth increasing 50% every year. It reached this level of growth in half the time Netflix did. HelloFresh racked up $970 million sales during Q3 2020—a 120% increase from their same quarter just one year prior—partially due to 2020’s stay-at-home orders inciting desires for packaged and delivered groceries (Financial Times).

The Subscription Economy Index has grown more than 435% in the last nine years and shows no signs of stopping, according to Subscribed Weekly. McKinsey reports that subscription businesses exhibited a combined growth of 300% from 2012 to 2018, continuously expanding at a similar rate into present day as they used metadata and improved algorithms to pinpoint and deliver on the individual consumer’s everchanging needs. The subscription economy is poised to grow exponentially over the years, with lots of attention focused on life during and beyond the pandemic.

There’s room for even more growth in the subscription business. But who should dive in? Here are some of the potential industries that should consider following a subscription model in the near future:

1. Airline subscriptions

Travelers love a good deal on flight tickets. Why not offer those who fly regularly or who routinely fly a specific route some discounted rates throughout the year? An airline subscription model could open up a sky full of opportunities for the airline and consumer alike.

Giving frequent flyers a chance to subscribe to a monthly service with a flat fee could encourage more travel. Or the airline could offer a perk such as spending less time in the airport for a more efficient experience.

Surf Air, for example, is a Los Angeles-based aviation marketplace that charges a monthly fee to subscribers to gain unlimited access to flights on private planes.

2. Gaming subscriptions

Gone are the days of heading to the local video rental shop where consumers could rent a new video game and take it home for a few nights to try it out before buying it if they love it. Today many are compelled to buy a game at full market value as soon as it hits the shelves. However, the heart of why people buy is for the feeling that they are getting a good deal, which usually means getting a mix of game selection and flexible volume or playtime for a relatively small monthly fee. Imagine a subscription that enables you to play any game, any time, on any device, and keeps track of where you left off. Google Stadia is one of these ideal gaming subscriptions offering access to an extensive esports content library at a monthly rate of ten dollars a month. Content and ease of access are the primary drivers of the gaming industry right now.

Introducing a subscription service to the gaming systems community can bring a sense of nostalgia back to older players and introduce a new and efficient method of bringing a larger variety of games to new gamers. Game creators can bring their entire catalog of games to market and expand with new or niche content simply by bundling and partnering with other companies.

3. Health and wellness subscriptions

Health and wellness is a broad category so let’s break it down into two: first, education and exercise focusing on preventative health, and second, healthcare and medicine focusing on treatment and health maintenance. Increasing health consciousness and/or preventative health among people across the globe, along with rapid digitalization of numerous industries at a global level, are trends driving the market. In fact, the connected gym equipment market and convenient on-demand workout content is expected to reach $1.048 billion by 2023 with 31.1% CAGR (A.M. Research).

Education and exercise

Subscription services for at-home fitness instruction have become popular and will continue to increase in popularity. Peloton, the interactive exercise equipment company, saw Q4 2020 sales surge by 172% (CNBC). What’s interesting about the company is that they position themselves as a content-creating entity first and foremost. The company’s main product is not their exercise bikes, but the high-quality digital content it creates and publishes. In fact, the content and instructors who take a hand at production and execution are what drive Peloton’s bottom line. That’s because the riveting content is what keeps bikers and community members coming back onto the platform to exercise. Peloton users buy the stationary equipment and then are expected to subscribe to a membership which provides access to exercise classes. A household all-access membership is $49 per month.

Healthcare and Medicine

A subscription model related to healthcare can also be beneficial for those who have skipped important doctor’s appointments in the last year. A telemedicine app that charges users a monthly fee may encourage more people to continue their routine physician “visits.” PlushCare is a telemedicine app that can connect you with a doctor for a same-day appointment, and your care provider can even prescribe medication via the app. Check out Vindicia’s research and recommendations for health and wellness subscriptions to find out how subscriptions can drive growth.

4. Home maintenance and décor subscriptions

Because home maintenance and regular cleaning can be absolute chores for working adults and parents with busy schedules—which is everyone these days—hiring a cleaning service once or couple times a month to assist can be beneficial but also very costly over time.

A cleaning subscription service, on the other hand, can enable adults to prioritize cleaning at a cadence that works for their lifestyles. The subscription model is able to attract customers who prefer a flat rate fee per month, consistent service, and simple booking process. A number of businesses have intentionally adopted the subscription model, proven fit for nurturing relations with customers and delivering great experiences so customers are satisfied and keep returning.

Décor has also been trending as consumers are looking to redecorate and redefine their living spaces. The pandemic’s stay-at-home measures have unintentionally forced everyone to take closer looks at their walls and furnishings. To satisfy to this trend, Restoration Hardware recently eliminated promotions and sales altogether in favor of an annual subscription program that gives members 25% off all purchases in exchange for paying an annual fee. Modern furniture company Rove Concepts also launched the Rove Members Program, an annual membership bundled in with new customers’ first major purchase. Home maintenance and home décor subscriptions are fulfilling consumer desires for more predictability and ease.

How does Vindicia help these industries launch and scale subscriptions?

Vindicia is built to help content or digital service providers in any industry, like those previously listed, launch and scale their subscription model with ease. MarketONE, the all-in-one subscription platform, is designed to help businesses grow with next-generation subscription models that are equipped to create and maintain long-lasting customer relationships while continuously leveraging data insights that we call subscription intelligence.

It’s simple: MarketONE does all the work. It generates the growth of recurring transactions and subscription bundling, so your business can attract and engage audiences and deliver the value and quality experience that consumers expect from a subscription service.

The platform is modular, and features Subscribe, Bundle, and Connect components, each built to let you explore the recurring revenue models that can lead to subscription success, no matter where you are in your lifecycle. When used together, you effectively lay the best foundation to launch and grow your subscription model service, at a lower ownership cost.

  • Subscribe: Launch your subscription offers with go-to-market flexibility and boost transaction success rates.
  • Bundle: Drive user engagement and accelerate growth by bundling your own or partner services.
  • Connect: Create a personalized experience for every user with identity management to boost engagement and retention rates.

If you’re a B2C business and you’re ready to launch or scale recurring revenue models, Vindicia MarketONE is the all-in-one subscription monetization platform for your journey to success. Contact us to learn more about how you can launch and scale your new business model today.

About Author

Nelson Veiga

Nelson Veiga

As Vindicia’s VP of Enterprise - Americas, Nelson’s team drives/delivers desired business outcomes for Vindicia’s clients. A proven cross-functional leader with 20+ years of experience, Nelson has delivered success in senior roles in technology companies across sales, customer success, operations and technical roles. His years of experience include serving as VP of Sales and eventually COO of Duetto, VP of CS at Bazaarvoice, and VP of Latin America Sales at Lithium Technologies. He holds an MS in management information systems from Florida International University.