What is the reason for the increase in subscription-based businesses?

The size of the global e-commerce subscription market is expected to rise from $72.91 billion in 2021 to $904.2 billion by 2026. That is a total increase of $784 billion. The demand for subscription businesses increased because of the convenience of recurring goods and the instant gratification of services.

Fun fact: Amazon was the first company to capitalize on the subscription business. The businesses which followed amazon were FabFitFun, Birchbox, and BarkBox. 

The top 3 types of subscriptions are: 

1. Subscription Boxes 
2. Digital Content Subscriptions 
3. Service Subscriptions 

Subscription Boxes 

The demand here started when the covid pandemic began as people started preferring online purchases catering to both household and beauty needs. When businesses provide a customized experience, 80% of consumers are likely to buy. Personalization with subscription memberships promotes customer retention and increases revenue. 

Digital Content Subscriptions 

This is a popular model among authors, content creators, and publishers. Digital subscriptions started with Netflix. These business models let brands create and grow sustainable income streams besides having a direct connection with their customers. 

Service Subscriptions 

Amazon offers service subscriptions, which include fast and free shipping, where 79% of members in the U.S. receive same-day or next-day shipping. The members also have the option to cancel the subscriptions, this gives them the freedom to opt out any time they want to. This feature reduces the fear that users may have of this subscription commitment and gives them control. 

To Conclude: The Impact of Subscription 

The above-mentioned subscriptions provide users access to what they want, whenever they want at a reasonable price. Subscription memberships have been proven to increase purchases and enhance revenue. Further, it is proven that the users are ready to pay for subscription membership as it is convenient and affordable. This also lets merchants provide a direct user experience that attracts, retains, and benefits customers long-term. Merchants also see long-term results. 

Mobolutions, as a leader in the digital economy, focuses on innovation to help customers position their businesses by accelerating the adoption of technology. Our mission is to build value and impact by partnering with our customers and implementing innovation by leading with purpose.

Using SAP BRIM Implementation, SAP Entitlement Management, SAP Subscription Billing and S/4 HANA solutions, Mobolutions assists customers in implementing revenue sharing business models, flexible consumption models, and transformational needs.

By building robust, agile, and automated solutions with our BRIM accelerators, our customers realize time to value faster. Combining our deep industry expertise in TPA, High-tech, Energy, Aerospace & Defense, Utilities, Manufacturing, Retail and Media / Entertainment industries with end to end solutions and capabilities, we set the standard for building complex solutions that optimize our client's business models with ease and faster ROI.

Revolutionize your SAP Subscription journey with brimignite Implement SAP BRIM right away and streamline billing processes, increase revenue streams, and enhance customer experiences, all in a fast, reliable, and scalable platform.