By Morten Suhr Hansen
A couple of weeks ago, in this article series, I wrote about my latest subscription purchase: shoes on subscription, in the form of stylish white running shoes from the Swiss lifestyle brand On. I also posted the new shoes on LinkedIn, which sparked quite a bit of attention. Does it really make sense to subscribe to shoes? And is it as sustainable as the company claims? It led to an interesting and lively discussion, but for now, I’m quite happy with the latest addition to my portfolio of subscriptions.
I’ll admit it! I have more subscriptions than most people. In fact, in my own household, we currently have 55 active subscriptions! Is that more than five years ago? Absolutely. But is it the same for the rest of us Danes? That’s what we’ve set out to investigate.
The Scandinavian Subscription Survey is just around the corner
Right now, we’re in the middle of conducting the largest survey on the subscription movement ever done across Scandinavia. We’ve asked 1,000 Danes, 1,000 Norwegians, and 1,000 Swedes about their subscription habits and opinions. How many do they have? What do they think of them? And what are the most popular subscriptions in each country?
Right now, we’re in the midst of analyzing all the responses, and in just a few weeks, we’ll be ready to publish the ‘Scandinavian Subscription Survey 2024’. We’re excited – hope you are too!
In fact, we conducted a similar survey back in 2020, focusing on Denmark and Norway. At that time, the results showed that Danish households had an average of 17 subscriptions each. I thought that was quite a high number, but it will be fascinating to see how this has developed over the past four years. It’s been an extremely turbulent period with the pandemic, inflation crises, and declining consumer confidence. Has the subscription movement been able to maintain its momentum?
What do other studies reveal about the subscription movement?
While we wait for the Scandinavian subscription economy data, we can take a look at what other analyses are telling us about the world of subscriptions.
One of the leading companies in the global subscription economy is the U.S.-based Zuora, which provides software solutions for subscription businesses. In April, they published their annual report on the subscription economy, the Subscription Economy Index, which tracks the growth of more than 600 major subscription companies worldwide. Their report showed that these companies grew their revenues by 10.3% in 2023, while their benchmark of the 500 largest U.S. companies saw growth of just 6%.
The growth among subscription companies is particularly impressive given that 2023 was a challenging year due to inflation and lower consumer confidence. The analysis also shows that new sales for the 600 subscription companies were lower than in previous years. However, churn rates remained stable, and even slightly lower than before, highlighting that subscription businesses are often better equipped to weather economic downturns compared to traditional transaction-based companies.
This positive outlook on subscription companies’ ability to create long-term value is further supported by a 2023 research study from Columbia Business School, conducted by Yue Chen. The study reveals that companies with recurring revenue models, such as subscription services, typically achieve higher valuations and greater financial stability compared to those primarily selling one-time products. This is attributed to the predictability and consistency that subscription revenue provides.
What else can you expect answers to?
These findings, along with many similar studies, paint a picture of a subscription movement that continues to grow. Whether this is still the case here in Scandinavia is something we’ll soon find out. But the report also delves deeper into the subscription toolbox and explores consumers’ attitudes towards more specific subscription topics: What payment methods do we prefer for our subscriptions? Why do we sign up for subscriptions, and what drives us to cancel them? What factors contribute to building that crucial loyalty?
I look forward to coming back with answers to these questions – and much more!
