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.
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Product ownership is a thing of the past. 68% of international adults believe that a person’s status is no longer defined by what they own. (Graphic: Business Wire)
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 press@zuora.com.
Please see www.deloitte.com/about
to learn more about Deloitte LLP.
Source: Zuora Financial
View source version on businesswire.com: https://www.businesswire.com/news/home/20190429005110/en/