Five years ago Tien Tzuo, CEO of Zuora was introducing a concept called the subscription economy. In Tzuo’s opinion, consumers were moving from a product purchasing society, to an outcome society. In other words, people no longer wanted to buy a product, but only wanted to experience the outcome. User’s no longer care how they get from Point A to Point B, they just want to be at Point B.
With less and less people buying items at stores, the subscription model is allowing consumers to sign up to businesses and receive deals, products, and services in advanced. Society has entered the world of automation and big data. Because of this, more companies are selling the idea of tracking past usage and using predictive analysis to help serve customers. In today’s economy the service is no long the transaction but the analysis of the transaction.
Tzuo believe’s that in 5 years, the subscription economy will be everywhere and no one will actually purchase anything on a one off basis. According to Tzuo businesses are more invested in updating client’s data and retaining consumers for the long term.
In a bold prediction, some believe that in 5 years, half of today’s Fortune 500 companies will cease to exist due to outdated business models. Companies like GE and IBM are two examples of organizations evolving their offering concepts. In order to survive and succeed into the future, an evolving business model must take place, and subscription may be the answer.