Subscription Economy News - Week of 6/17/19

Every week, we bring you the top stories and analyses from the global Subscription Economy. 

HP Enterprise to Move Toward Subscription Model, Chasing Amazon
Excerpts from an article by Nico Grant in Bloomberg

Hewlett Packard Enterprise Co. will make all its products available through subscriptions, Chief Executive Officer Antonio Neri’s biggest move yet to shield the server maker from growing cloud-computing competition.

HPE’s computer servers, storage hardware, networking gear, and software will be available through a pay-per-use or subscription model by 2022, the San Jose, California-based company said Tuesday in a statement.

HPE made the subscription announcement at its annual Discover conference in Las Vegas. This is the company’s most significant effort to generate more recurring revenue, which can help boost overall sales. HPE’s revenue has shrunk in the last two quarters compared with a year earlier.

“We will reshape HPE and transform the market, with a new and better way to deliver as a service,” Neri said in a statement.

Read the full article in Bloomberg

EA thinks gaming subscriptions will lead to weirder, more creative games
Excerpts from an article by Julia Alexander in The Verge
Nearly every video game publisher wanted to talk about subscription services last week at E3, but some top executives know some will inevitably fail. In an attempt to stand out, however, more game publishers may rely on developers to make innovative, experimental games designed for these services.

Mike Blank, EA’s senior vice president of player networks and the man who oversees the game publisher’s subscription service, is one of those executives thinking about the industry’s pivot.

EA’s big advantage in a quickly crowding space is being far ahead of the competition in collecting data about what players want and don’t want out of a subscription service. The company says it has learned that subscribers need access to new games that people are talking about, but that players will also try or revisit older games simply because they’re available. This allows EA and the company’s various development studios to take a chance on titles that otherwise may have been considered too experimental for a retail release. (EA already runs its own indie publishing label, EA Originals, which announced a trio of new titles last week.)

“The value of a subscription is ultimately, from a business standpoint, how much do players engage with the subscription,” Blank said. “If you can provide them with new and different experiences they might stay for longer. I think we will build new and different games that will fit within the subscription itself.”

Read the full article in The Verge

Walmart Offers Subscription for Unlimited Grocery Delivery
Excerpts from an article by Mike Pomranz in Food & Wine

Walmart began aggressively increasing the areas where they offered grocery delivery last year. Then, just a couple weeks ago, a new twist: Walmart announced the launch of a new service, InHome Delivery, that will deliver items directly into customers’ homes when they aren’t there, including right into their refrigerators. Now, another new wrinkle: Walmart has also quietly added a new unlimited delivery option for just $98 per year, according to TechCrunch.

Called “Delivery Unlimited,” this new subscription service allows customers to forgo Walmart’s per order fees, helping the brand compete with similar programs like Amazon Prime or Instacart’s subscription program. Delivery Unlimited is priced at $12.95 per month or $98 per year, landing the program right in the same general cost as those annual services as well.

Read the full article in Food & Wine.

GNC bulks up omnichannel revenue with new shopping option 
Excerpts from an article by Dan Berthiaume in CSA

GNC Holdings is joining the subscription revolution. The GNC program enables customers to enroll and use subscriptions online and in retail stores. By permitting sales associates to enroll customers with digital in-store experiences, GNC says it has been able to convert many one-time customers into recurring customers.

“By offering customers an easy and flexible way to order and reorder their favorite products, whether in-store or online, we’re seeing enrollment in subscriptions rise and growth in recurring revenue,” said Tricia Tolivar, CFO at GNC.

A recent “End of Ownership” global survey from Zuora and the Harris Poll suggests that an increasing number of consumers are utilizing retail subscription programs. Results indicate 71% of respondents have subscription services, up from 53% who had them five years ago. And 74% of respondents believe that in the future, people will subscribe to more services and own fewer physical goods.

Read the full article in CSA

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