Subscriptions: ready to shake up e-commerce (Image: iStock)
The global subscription economy is expected to reach $275 billion in 2022; rising from $224 billion in 2021 as the model takes off in physical goods, as well as music and video.
After evaluating 10 key subscription-based markets, researchers at Juniper Research have identified that physical goods will represent the greatest opportunity for subscription revenue and are expected to represent 45% of global revenue by 2022.
The report confirmed that subscriptions to physical goods have seen an increase in user demand as users want to secure reliable sources of medicines and essentials in the face of the pandemic.
Additionally, the report revealed that subscriptions to digital services, including music, video streaming, spoken word and video games, will be a major source of revenue; accounting for 39% of the value of the global subscription market in 2022. It predicts that the growing adoption of new emerging device types, such as smart speakers, and the increased availability of streaming content will drive further adoption .
The report, Subscription Economy: Future Strategies and Market Forecast 2022-2026, also found that increased user demand for reliable and recurring deliveries of key items, due to the Covid-19 pandemic, and support for automation of subscription services, are the main reasons for the adoption of subscription services in these three verticals; accounting for 75% of global subscription market revenue in 2022
]The study established that support for alternative payment methods is critical to the growth of future subscription services. In turn, he urges providers in the subscription economy to support multiple payment methods, including Open Banking and digital wallets, to improve end-user convenience.
Juniper Research recommends that platform providers focus on the most popular alternative payment methods in their target countries to minimize friction in the payment process, and thereby reduce churn.
