Every week, we bring you the top stories and analyses from the global Subscription Economy.
The Netflix model: How Philips and Husqvarna are embracing the Subscription Economy
Excerpts from an article by Alex Sword in Internet Retailing
Moving towards an access model rather than an ownership model could be a way for retailers and brands to reduce the cost of acquiring new customers, if recent experiments with a Netflix-style business model by major European brands are anything to go by.
Speaking at the Zuora Subscribed conference this week, Marinus van Diggelen, director of digital product marketing and new business models at Philips Personal Care, said that the 127-year-old brand’s healthcare and beauty arm is exploring a range of new business models built around recurring payments as opposed to the traditional “single value exchange”.
Subscription boxes for beauty and food products are now offered by the likes of, for example, Birchbox and Graze. But most such models are still largely limited to the exchange of payment for a product, just on a recurring basis.
Philips wants to take this model further. van Diggelen highlights the “try before you buy” model as a particularly relevant one for Philips. Rather than having to spend a large lump sum on a product like an electric razor, customers pay off the cost of the device in installments over the course of over a year.
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This Company Is Betting You’ll Subscribe to Their Sofa
Excerpts from an article in the Entrepreneur
Michael Barlow and his co-founder Lucas Dickey believe the next big trend in the Subscription Economy is furniture. Their company “Fernish” offers a lifestyle subscription service for the home. “We let people choose the home furnishings they want for however long they want them, for one monthly subscription price. With trends around mobility, ownership and the changing way that people value time, Fernish makes a ton of sense for the 25 million young professionals currently both renting their homes and planning to move within the next 12 months,” explains Barlow.
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Allure Is Growing Its Subscription Service by Treating the ‘Beauty Box’ as Its Own Business
Excerpts from an article by Sara Jerde in AdWeek
Allure is looking to further expand its team working on the brand’s beauty box as the number of subscribers continues to grow.
The monthly box includes beauty products curated by the Allure team, accompanied by a brief pamphlet with a description of each sample-sized product (and sometimes a coupon code to purchase the full-sized version in stores).
Though the Condé Nast title did not say exactly how many people subscribe to the $15-per-month box, the company said membership is at an all-time high and was up 160 percent in June 2018 compared to the same month last year.
“It’s something that’s so core to what we do already because what people really want from us is product recommendations,” said Michelle Lee, Allure’s editor in chief, during the Brandweek summit in September. “When you’re getting a mini magazine that’s written by editors, it all makes sense.”
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Care by Volvo subscription service could soon expand to used cars
Excerpts from an article by Steven Ewing on CNet.com
Slowly but surely, Volvo will expand its Care by Volvo vehicle subscription service to its entire lineup of new cars and SUVs. But Volvo is also looking at the subscription model for another important part of the car-buying space: the certified pre-owned (CPO) market.
“I think that is probably the next step,” Volvo’s North American CEO, Anders Gustafsson, told Roadshow in an interview this week. A used-car subscription service “is probably 50 percent of the questions that we receive from our customers and from our retailers.” As for when we could see something like this come to fruition, Gustafsson ballparks, “Let’s say one year.”
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For more on what’s making news in the Subscription Economy, check out Zuora’s Subscribed Magazine!