Millennials are Leading the Shift to a Subscription Economy
As millennials continue to exert greater control and influence over today’s economic climate, it has become mission critical to understand their real-time spending patterns and methods to optimize effective marketing strategies and engagement.
Millennials are leading the adoption of subscription services, in particular, subscription box services as you can see in this chart. If your focus is selling a subscription box, for your business to remain viable, you need a critical emphasis and focus on who is adopting your service.
With each passing year, millennials show a demonstrable preference to monthly payment models offer in terms of freedom, convenience, and flexibility for everything from television programming and music, to food delivery and clothing. This change in buying patterns is leading to many marketers to investigate new ways to package their products and services to satisfy the need of this important segment and their changing preferences.
Tien Tzuo, CEO of the subscription billing company Zuora, addressed this trend during an interview with Forbes. “Over the past few years we’ve seen a seismic shift in growth strategies for business brought about by a growing preference on the part of both businesses and consumers to subscribe to services, rather than buy products.” Tzuo went on to point out some of the biggest attractions to these services. “Companies are allowing their customers the adaptability to either pay as they go, or pay per subscription monthly, or via a long-term contract. The point is to have flexibility.”
Millennials continue to demonstrate their preference for access rather than ownership; The vast majority of subscription services do not require an upfront financial commitment. The feature that allows customers the capability to instantly leave these programs for a “better offer” is seen as a comfort & benefit.
The rise of all consumers, including millennials, to prefer and embrace a subscription-based relationship with their choice of products and services demands that smart companies re-evaluate and optimize the way they currently engage with their customers and prospects.
For the millennial generation, these types of connections with brands are “table stakes” in terms of affinity and loyalty. This generation has a much different sense of values and expectations when selecting vendors and service providers.
In order for companies to remain viable, there must be a mission critical emphasis and focus on their customers and quickly act based on their changing needs and wants. Dated strategies and tactics will simply not connect with this audience and/or their buying patterns.
Winners in this new marketplace must examine their strategies and tactics with an eye towards total readjustment and transformation. Failure to adapt to this hyper changing shift in media consumption and engagement patterns could spell disaster. It is paramount for any marketer that is serious about maintaining and/or increasing its level of engagement & profitability with Millennials, develops new and innovative ways to engage the audience and deliver their products/services.