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Subscription models: prospects for stability in retail

The economic outlook remains uncertain. Consumers and buyers are changing their behavior: They are buying less, cheaper or not at all. Many retail companies are feeling the pain of this. In view of this rather subdued outlook, subscription models are proving to be remarkably stable.

At least that is what the SEI Subscription Economy Index reports for the first half of 2022. It confirms that subscription companies have achieved higher sales growth than companies in the S&P 500. According to the SEI, companies with recurring sales based on subscription models have increased in terms of new customer acquisition and sales. Cancellations were also lower than before the pandemic.

The SEI report is supported by many parties, including Deloitte. Deloitte confirms significant growth in the area of subscription. In its “Subscription Report 2022”, Deloitte distinguishes between three fundamentally different subscription types:

Overview of subscription models in retail

Product subscription

Subscription to consumer products with regular home delivery. These include:

  • Box subscriptions
    Including diet boxes, cooking boxes, beauty boxes and surprise boxes.
  • Product subscriptions
    Delivery of preferred items such as cosmetics or food supplements at fixed intervals.
  • Rental subscriptions
    Use of a product on the basis of a rental or leasing contract. Typical products are cars or laptops.
  • Cloud software subscriptions
    Software use from the cloud on the basis of term contracts and use per user or “pay as you use”. Typical solutions are purchased software, apps and rental software

Service subscription

Customers receive access to services. Examples are:

  • Membership programs
    Discounts on goods, personalized offers, direct interactions between customers and companies. In addition, digital services such as experience-oriented shopping supported by 3D technologies or virtual reality.
  • Support and consulting subscriptions
    Subscription to regular training courses and access to teaching materials.
  • Data subscriptions
    Customers have access to special data and information that is regularly updated, such as new deliveries combined with special purchase options.
  • Cloud services
    Purchase and streaming of audio or video files.

E-Commerce-Subscription

Value-added services such as free delivery, express delivery or discounts on a specific platform for a fixed upfront fee.

There are no limits to the imagination: The number of variants will grow. Retail companies are called upon to seize their opportunities, rethink their traditional business model and way of working and create a co-existence of old and new.

Automated invoicing processes with bill-to 365

bill-to 365 lays the technological foundation for this transformation. The latest module in our product range has been specially developed for the fast and efficient processing of recurring invoices. The most important advantages include:

  • Flexible and easy-to-use control of subscriptions and recurring invoices.
  • Different billing models, such as licenses and consumption, which can be combined in the same subscription.
  • Simple and individual parameterization of your invoice texts.
  • Seamless integration into Microsoft Dynamics Business Central.

And much more.

Simply register now for our next webinar to find out more about bill-to 365. To the information and registration: Webinar dates.

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