The way in which we buy and consume products is rapidly changing. The world we once knew - where we owned physical products like CDs, DVDs, newspapers and even cars - is rapidly coming to a close.
Instead of buying products upfront, more people are subscribing to services and renting consumable products. At Zuora, we have dubbed this phenomenon the Subscription Economy.
Subscriptions aren't just about magazines anymore: There are subscriptions for everything. WhipCar offers people an alternative to car rental and ownership, Girl Meets Dress lets you rent a dress for any occasion. The Larder Box is a monthly subscription service that delivers food and recipes straight to your door, and of course there are Boris Bikes where you subscribe to a bicycle service, ride it where you like, then return it, ready for the next person. You can even hire dogs: FlexPetz offers access to fully-trained dogs for a few hours or days, depending on what you want.
So how does it work? You pay a monthly subscription fee and get access to products on a per-usage basis. Businesses offer different subscription packages according to the frequency of use each customer wants, and provide updated versions of products as they become available.
Think about it like this: when was the last time you bought a CD or DVD? Now it's more likely that you listen to music through Spotify. Or compare watching movies on demand through LoveFilm or Netflix to buying a DVD from Amazon or renting from Blockbuster. What about your vehicle? Unsurprisingly, cars sit idle 92 per cent of the time. WhipCar - a company like Airbnb but for cars - is capitalising on this. Owners rent their vehicles to peers for short periods, minimising waste and running costs.
Or how about your business life? Many companies also subscribe services for their needs. For example, your company subscribes to Salesforce.com and your financial team probably subscribe to the CRM you're using. The copier and coffee machine are also rented or leased.
And, what about the opportunities this brings? A different car when you want it, more songs and movies - the list goes on.
This fundamental shift away from owning a product to the Subscription Economy is unmistakable. Right now we think that there are potentially more than 15 million companies in North America and Europe that are using the subscription model or could adopt it.
So what are the implications? Imagine stepping out of the door of your weekly-rented house, with your rented dog in tow, dressed in the latest designer outfit which arrived the night before, just in time for the party you are heading to. You get into your neighbour's car, which you have rented for the night. All this after you have eaten your breakfast of fresh delicacies that you subscribe to have delivered on a weekly basis. The concept is easy to understand and convenient to live with; within 10 years it's conceivable that you won't own anything at all - and you won't care.
For consumers and business people alike, it allows more freedom and variety in the way they consume products. You can make small regular payments in return for use of services instead of buying them outright. Think Zipcar: it lets members hire cars by the hour rather than being financially responsible for their own. And more and more goods are going from single transactions to subscribed, continuous relationships. So if you're regularly buying things like toilet paper, milk, or cereal you may be rewarded with a service that suits your specific need. It's about businesses providing customers with what they want, where they want it and how they want it - each customer is unique.