April 10, 2018
The subscription model is hot and companies that are not thinking about leveraging it somehow—no matter what the product is—could be missing out. In the digital age, consumers have become very used to paying for digital products like streaming video, music and games via subscription. But from cars and clothing to razor blades and prepared meals, shoppers are increasingly comfortable paying for tangible products this way, too. A new report from Dutch financial institution ING puts some figures around the growth of this category in Europe.
ING pegged the total subscription economy in Europe at €350 billion ($431 billion). Of this total, €80 billion ($99 billion) consists of durable and consumable goods with several drivers pointing to increases in the future, especially with younger consumers and those in eastern and southern Europe.
“European households report spending a monthly average of €130 ($160) on all subscriptions,” the report’s authors wrote. “This amounts to some 5 percent of total European household consumption. The subscription economy will grow further, enabled by technological developments, shifting consumer preferences, favorable regulation for product design and the current low-interest rate environment. If all those considering any subscription in the future were to convert, the amount spent could grow by an additional €190 billion ($234 billion) yearly.”