Under this model, the consumer is charged for periodic delivery of goods and services. Pay as your Go model is simple and hence highly popular. The main types of subscription economy models are a) Pay as you Go, b) Curation model c) Replenishment model and d) Access model.
Subscription economy may have different meanings for different businesses as firms may choose to implement their own versions to suit their requirements and resources. It is likely that by 2023, 75 percent of the companies dealing in direct selling will adopt subscription model for their clients. However, it should be noted that the model has proved to be so successful that it has not only been implemented in B2C segment, but also in B2B sector. While the payments under this model are expected to be made regularly, the plans may be customized to best meet the individual requirements of the consumers. Under this business model, the consumer is willing to use the goods or services on periodical basis instead of making a one-time commitment. Currently, many companies are moving away from traditional model towards subscription economy due to change in consumer taste and needs. Such periodic payments are called subscription and the model is known as subscription services model. This implies that instead of charging a lump sum amount to the customers, the goods or services are provided in lieu of periodic payments. In simple words, it may be defined as the practice of businesses to offer subscription to their customers. It also means that the businesses are now able to better handle their cash inflows and improve their liquidity. This mode has changed the way consumers pay for different products and services. One of the most disruptive innovations facilitated by technology is the proliferation of subscription economy.
Technology has brought newer avenues to the customers and has offered them more choices.
This is primarily due to change in consumer needs and perceptions. Technology has changed the way businesses are conducted.
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