Subscriptions: Growth Proves Endurance As New Customer Behaviours Are Cemented
The world witnessed significant changes sparked by the pandemic, and as a result we have changed. In 2020, companies and consumers woke up to the power of digital service models. These services continued to gain momentum in 2021 as the economy began to recover. Our lives are increasingly defined by technology, and technology is increasingly defined by software and complementary services.
This includesbusiness models rooted in recurring customer relationships that users subscribe to, such as ongoing digital services and consumption-based models.
As a result, customers have established new habits and behaviors. Subscriptions have provided resilience at key moments of uncertainty, and enthusiasm for these services continues to grow, as seen by the companies that comprise the Subscription Economy Index™(SEI) report. Over the past decade, the Subscription Economy Index has grown 4.6x faster than the S&P 500, which represents more traditional, product-based businesses (compound annual growth rates, or CAGR, for the 10-year period were 17.5% vs. 3.8%,respectively (Table 1)).