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BizReport : Ecommerce : April 13, 2016


Study: Subscription economy to skyrocket

Over the next four years, marketers can expect a sharp uptick in subscriptions. That's the word from a new MGI Research report which suggests the subscription economy could push past the $100 billion mark by 2020. Researchers believe about 20% of Fortune 1000 brands will adopt subscription tools.

by Kristina Knight

Boxes of food, boxes of razors, boxes of...whatever. According to new research the subscription economy, in which consumers subscribe to a service and have the goods they want delivered to their door, will show significant growth over the next four years. The kicker? The 'new' subscription service isn't so much about which product is delivered and will be more about the experience the consumer receives from it.

"We have claimed that all companies are moving to the Subscription Economy, and this study shows that to be true," said Zuora® CEO Tien Tzuo. "It's clear to us that the shift to subscription business models requires Relationship Business Management (RBM)™ tools that will drive deep subscriber relationships and create opportunities to monetize virtually anything. We will continue to lead the industry in supporting our customers' need for rapid innovation, flexibility, and agility to grow and prosper in the future."

Some interesting findings from the report include:

• North America has the largest total addressable market (TAM) currently with $50 billion
• Asia holds about $24 billion TAM
• 80% of all TAM is represented by brands making $1 billion or more per year
• IoT is expected to drive more subscriptions

Tags: MGI Research, subscription ecommerce, subscription service trends, Zuora










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