The usership economy has had uninterrupted growth over the past decade. This economic model, helped by the rise of digital technology in our day-to-day lives, attracts customers who prioritise use over possession. How do we explain this evolution and shift in mentality?
Customers are looking for simplicity through usership economy
When surveyed about their reasons for subscribing to a product or a service, the majority of customers responded similarly: convenience. Basically, they prioritise use over possession. According to a study done in 2018, only 9% of French people prefer to purchase and own goods. This shift in mentality towards usership economy seems to stem from the younger generation—according to the same study, 64% of 18 to 24-year-olds are subscribed to at least one product or service.
The rise of day-to-day digital interactions also plays an important role in the relationship consumers have with subscription services. Today, it’s so simple to subscribe to a service in a couple of clicks, especially when you can download a mobile app. This is evidenced when we look at the changes on the Apple App Store—the number of available apps has exploded from 71,000 in 2009 to 3.4 million in 2020. It’s no wonder the subscription market has taken off in the space of only a few years when French people spend on average more than three and a half hours per day on their smartphones.
The Software as a Service (SaaS) model is also experiencing remarkable growth in the work world. The market was previously dominated by the On-premises model but managers now are more open to adopting flexible solutions known to have simple implementation.
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The usership economy was boosted by the pandemic
The Covid-19 health crisis paralysed many businesses’ activities but the same certainly cannot be said for the subscription market. Between 2020 and 2021, global subscription revenue went from 142 billion euros to 186 billion euros.
In general, the health crisis brought to light new needs. For example, entertainment subscriptions like streaming platforms exploded during confinement periods. Sports coaching apps also saw a colossal 240% rise. Mobile app downloads increased by 33% and had a 20% increase in consumer spending in 2020.
Other companies also discovered new needs as they were forced to adapt to new situations. Work From Home contributed considerably to the rise in SaaS solutions. Platforms like Slack or Microsoft Teams leaped appreciably in just a few months. The most distinctive example is still Zoom—30 times the previous number of subscribers gained in only six months!
Business managers’ mentalities also shifted during the health crisis and now they see digital technology as a key transformation factor causing many businesses to change their economic model. The usership model gained the most ground.
Usership economy with personalized offers and services
The key reason consumers are turning to a subscription-based model and usership economy is growing, is the personalization options. Companies need to get to know their customers so they can successfully satisfy and engage them. According to a study by One Spot, 87% of consumers say that personalized content influences their perception of a brand.
An Insider Group survey shows 78% of the questioned American Internet users said seeing personalized content increases the likelihood that they will buy the product. Little wonder then that collecting and analyzing customer data has become the heart of corporate strategies.
The more responsive the brand, the more loyalty it inspires in customers. Companies can use invoicing software like Billwerk+ to identify their customers’ needs and start building brand loyalty. Billwerk+ offers a SaaS solution in the Salesforce ecosystem that companies can be used to sort and analyze data collected in real-time.