The Driving Forces Behind Subscription Model Popularity
Subscription models have been taking the United States by storm, and for good reason. They offer an unprecedented level of access and convenience for most people. With a simple auto payment set up for each month, millions of people can receive a huge variety of services and products. Some people cite the usage based pricing model being especially appealing. Essentially, subscribers would only have to pay for what they actually use, and the service would track when they need to replenish their order.
Gen Z and Millennials are appearing to be the most receptive to subscription based models. Almost 40% of Millennials are subscribed to a digital or physical subscription service. Gen Z is lagging the older generation, at 21.9%, but this number is projected to grow as they grow both in maturity and wealth. Baby boomers are proving to not be very receptive yet, at 9.4%, but this is due to their lack of familiarity with this type of business model and unfamiliarity with some of the required technology.
However, across all generations there might be higher adoption rates after the COVID-19 pandemic. Subscription based businesses grew by 11.6% due to the inability to receive goods by normal channels.
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