Subscription Models for more Sustainability: A Planet B doesn’t exist

A Planet B doesn’t exist! How do subscription models help to increase sustainability and profitability?

Subscriptions are advantageous for consumers and companies, which has been shown many times in recent years. Scalable growth and predictable revenue streams for companies on the one hand, flexibility and cost efficiency for consumers on the other hand. In the wake of the ongoing sustainability issue, more and more companies change to or offer subscription models or offering complementary models. Morten Suhr Hansen, CEO of Subscrybe, has compiled some concrete examples of sustainable value-creating companies, Meaningful Brands, for you in his book “The Subscription Movement and How To Succeed In It”. We answer the question of how subscription business models can both promote sustainability and optimize the profitability of a business.

Ikea as a pioneer of sustainable furniture Subscriptions

There is no such thing as a Planet B. Ikea, the Swedish manufacturer and retailer of furniture, is well aware of this. The company stated that it wants to be a circular and environmentally friendly company by 2030. To achieve this goal, IKEA has published a plan to introduce sustainable furniture in 30 different markets over the next few years.

IKEA wants to move away from the “buy and throw away” mentality. Instead, the company wants customers to rent their furniture – to subscribe to it. In other words, this means that customers use furniture flexibly and sustainably as needed and return it to IKEA after a certain period of use so that it can be reused by other customers. In this way, IKEA aims to create a sustainable circular model for its furniture. And – the financial figures also prove Ikea right. Despite the Corona crisis, Ikea managed to increase its sales from 41.3 billion annually in 2019 to 41.9 billion in 2021 since the introduction of furniture subscriptions.

Subscription sustainability: Aarstiderne as an example

Another example of a Meaningful Brand is Aarstiderne, a Danish food box company. How many food boxes do you think the company produces per week? The answer is simple: as many as they sold! No excess, no waste, no waste of resources. Because it is a subscription company, Aarstiderne has a recurring clientele. The company knows how many boxes to produce and distribute each week.

On the other hand, there are normal supermarkets, where food is stored on the shelves. Every day, unpurchased or expired food must be removed or thrown away, especially fruits and vegetables, dairy products and meat. A 50% waste rate for fruits and vegetables is not unusual for supermarkets. According to the UN, food waste is one of the biggest climate challenges. Aarstiderne is able to reduce waste to less than four percent with its subscription model.

The digital publishing industry takes a stand on sustainability

The media industry is also significantly affected by the sustainable subscription movement. Many digital publishing companies in particular are showing an increased awareness of sustainability in line with the current zeitgeist, which reflects consumer needs and at the same time opens up new revenue opportunities.

E-books have become an integral part of many companies’ product portfolios. But how can sustainable e-books be made even more attractive for the consumer and more economical for the company? Quite simply – through subscriptions. One of many successful subscription models can be seen in the example of Egmont Publishing. Egmont Publishing is one of Scandinavia’s largest media houses, which discovered the advantages of subscriptions for itself back in 2015. The company introduced a now very popular “All-you-can-Read” app for thousands of magazine contents as a monthly subscription. The “All-you-can-Read” model not only gave the company new revenue opportunities, but also expanded the reading variety for its customers.

Meaningful brands are more than just zeitgeist

Especially in the B2C sector, it is now more important than ever to make a positive contribution to society. Meaningful brands serve a purpose that goes far beyond a company’s profit and growth. Meaningful brands are about responding to customer needs and societal expectations, about creating real added value. Sustainable subscriptions create such added value.

Havas Group’s 2021 Meaningful Brands study found that 73% of the 395,000 consumers surveyed globally believe brands must act for the good of society and the planet, and 64% of people prefer to buy from companies with a good reputation. It’s no surprise, then, that Meaningful Brands are generating above-average numbers.

No Planet B – Society in Transition

Today, consumers can subscribe to a variety of consumer goods such as bicycles, washing machines and more for the benefit of our wallets and the planet. We are responsible for our actions, our consumption and the future of our planet. We are creating the basis for future generations, there is no Planet B.

IKEA, Aarstiderne or Egmont Publishing are just a few examples of companies that use the subscription model to make their business more sustainable and at the same time more profitable – to operate as Meaningful Brands. As sustainable, value-added business models, you improve the image of your brands, increasing growth and profit.

Conclusion – More sustainability by offering and using subscriptions

The past few years have shown that the subscription movement and the ongoing sustainability trend open up many opportunities for companies, but also close many doors if companies react too late or do not follow consumer demand.

It can be said that the subscription business model has the potential to change the world for the better, while enabling benefits for consumers and businesses. Since we can’t turn to a Planet B, it’s up to us to keep our world livable in the future with sustainable choices. The bottom line: subscribing instead of buying is the best decision for consumers and businesses alike.