Subscribe to the future

Brands will use subscriptions as a way to create direct relationships with the consumer, expanding their insights and offerings.

In 2019, we’ll see the sharing economy continue to give way to the subscription economy. Subscriptions that provide on-demand products and services will become the norm for a growing number of sectors and products. The subscription model can reframe the brand beyond the category, radically changing the business model and profoundly changing how marketers need to approach the entire product development, distribution, and go-to-market process. Subscription appeals to virtually every consumer, giving them access to highly personalized just-in-time inventory without the need to invest in big-ticket items.

Older generations are generally accustomed to subscribing to a relatively small number of product categories—periodicals, cable television, smartphones, apartments, insurance—and those subscriptions tend to be static (you don’t get much flexibility in changing product preferences mid-subscription).

But millennials and Generation Z are changing the paradigm and turning to flexible on-demand subscription services for cars (Access by BMW), luxury jewelry (Flont), textbooks (Cengage), cooked pet meals (Butternut Box), clothes (airCloset), furniture (Lisa), cars (Zipcar), office space (WeWork), and probably soon much more. Surf Air, for example, is called the “Netflix of Airlines”: members get limitless access to flights for a monthly fee. All these companies are building a brand by starting with customer wants and needs, attacking pain points, and growing a loyal subscriber base.

In stark contrast to machine learning or algorithm-based advertising, subscription services make consumers feel empowered because they control the information they provide and the services (what, when, how much) they receive. Even platforms such as Facebook may need to move to a subscription model as consumers begin to react more negatively to AI-based advertising with ad blocking.