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A Taxonomy on the Three Archetypes of Product Subscription Models
Source publication
Subscription models have become a popular new way for consumers to do their shopping. This paper presents a taxonomy of the three main archetypes of subscription models and develops a classification scheme with type-specific features relevant to their successful management.
An implementation framework offers managers a guideline to introduce subscr...
Context in source publication
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Citations
... When subscribing to a self-assembled fashion box, customers can choose their preferred products themselves and, therefore, there is no surprise element. This type of subscription offers maximum convenience, making it a particular preference by consumers with more utilitarian motivations (Rudolph et al., 2017). For these consumers, convenience is one of the most important factors in the purchase decision (Kotzé et al., 2012;Sorce et al., 2005;Tao and Xu, 2020). ...
Renting fashion using clothing box subscription is a growing trend in the textile industry. The element of surprise varies according to the box type chosen by the customer: the self-assembled or the curated surprise box. Our study focuses on the effects of consumer characteristics, box type and other attributes on the intention to subscribe. We collected data from 364 German respondents and used choice-based conjoint analysis to estimate these effects. A between-subject design helps to compare the self-assembled versus the curated surprise box type. Price has the highest relative importance in the curated surprise box subscription model. In both subscription models, consumers preferred to rent four fashion pieces rather than two. Sustainable fashion labels increase the willingness to pay in the case of the self-assembled box model. Most consumers still prefer new fashion items over second-hand or upcycled ones, leaving considerable room for circular communication strategies.
... Research to improve relationship quality with customers in the service market has long been consistently conducted, and its importance has been increasing as competition in the market has grown. According to Rudolph et al. [15], companies should not only attract new members but also improve the relationship quality with existing members to gain a competitive advantage in the market. If the focus is on attracting new members in the early stages of service, retaining existing members is an important factor during the growth period, when the business expands. ...
... Recently, with the emergence of new services driven by technological advancements such as the metaverse [18], it is significant to re-evaluate the associations between metaverse service providers and users. To gain a competitive edge in the market, companies must enhance the quality of relationships with existing members in addition to attracting new ones [15]. In technology-based self-service environments, the service characteristics that the customers perceive during their interaction with technology significantly influences their behavior [58]. ...
Background
As non-face-to-face contact has become a daily routine owing to the development of science and technology and impact of the coronavirus disease (COVID-19) pandemic, online technology-based services (TBSSs) have been expanding. Consequently, in virtual metaverse exercise spaces, the number of participants using TBSS is increasing. This study aimed to examine the effects of TBSS characteristics on the quality of the relationship between service providers and users of metaverse exercise services.
Methods
The participants were metaverse exercise service users in Korea, who were selected through purposive sampling (n = 254, 194 men, 61 women). A questionnaire survey was conducted to measure the participants’ TBSS characteristics (enjoyment, stability, usefulness, ease of use, and reliability) and relationship quality (satisfaction, trust, and commitment). We analyzed the frequency, validity, reliability, and descriptive statistics of the collected data. Moreover, correlation and multivariate multiple regression analyses were conducted.
Results
Enjoyment, stability, usefulness, and reliability of TBSS had positive effects on satisfaction; however, ease of use did not have a significant effect. In addition, enjoyment, usefulness, ease of use, and reliability of TBSS had positive effects on trust; however, stability did not have a significant effect. Furthermore, enjoyment and reliability of TBSS had positive effects on commitment; however, usefulness, ease of use, and stability had no significant effects.
Conclusions
This study provides metaverse exercise service providers with management strategies for attracting and retaining members. The results of this study could help develop effective TBSS and aid metaverse service companies facing a fiercely competitive environment.
... In the commercial sector, there is evidence for various benefits, e.g., revenue increases through subscription combined with digital paywalls at publishers [69]. There are different types of subscription models and earning mechanisms [62]. However, as industrial customer relationships are more complex, e.g., because the customer is not necessarily the end-user. ...
... Consequently, the transferability of these results is scarce. While subscriptions have former mostly been applied to information related products, such as maps or books [62], Industry 4.0 is now accelerating the shift from manufacturing to offering services in combination with products. Thus, researchers have provided models that help companies to create value through additional services with the help of Industry 4.0 technologies [63]. ...
... Several researchers highlight the need for research on successful shifts to a subscription business model [48], [66]. Recent studies define and classify different types of subscription business models for industrial goods [48], [62], [83], analyze their implementation [42], [61] or examine specific obstacles to implementation, e.g., pricing [17], [85]. Other studies of similar business models, e.g., software subscriptions or free digital add-ons, have detected a positive impact on the customer relationship. ...
The implementation of Industry 4.0 often entails various changes to a company's business model. Not all companies take advantage of the new technological capabilities or create new digital revenue streams. In this regard, subscription business models are growing more prevalent in the market for industrial goods. Although just a few pioneers have integrated subscription offerings in their portfolio so far, an increasing number of companies are considering doing the same. This article contributes to this subject by examining the transformation from a component supplier to a subscription service provider and its impact on customer relationships. The findings are drawn from three in-depth case studies, two interviews per each case and ten additional interviews with experts to gather further information. Agency theory provides the theoretical framework. We identify enablers and challenges of subscription business models during the consideration, implementation, and operation phase. This article provides practical insights into the transformation of a provider's business model in conjunction with subscription, thus benefiting companies in every step of the transformation process. Moreover, we contribute to the theoretical literature on Industry 4.0 and servitization by structuring the transformation toward a subscription business model in phases and correlate features with each phase.
... What most appeals to firms launching any of these models onto the market is the thought of ensuring recurring revenue and a solid customer base (Rudolph et al., 2017). However, the viability of these business models has to be questioned on seeing that so many firms have disappeared shortly after reaching the market. ...
... Increasing customer demands (Bischof et al., 2020) and complex operations, together with numerous errors in service, have led to a large number of customers abandoning their subscriptions early on, leaving the firms to go bust . Replenishment models are particularly critical in this aspect, which is due to their two main features: the search for a long-term relationship with customers, in line with their recurrent purchase; and the need for a greater level of monitoring of operations to ensure that the commodities are replenished (Rudolph et al., 2017;Bischof et al., 2020). ...
... Only a few studies have looked in isolation at the subscription box business model (see e.g., Warrillow, 2015;Rudolph et al., 2017;Andonova et al., 2021). Nonetheless, the literature on subscription boxes still lacks support from a strong theoretical framework that enables analysis of the business model as a whole and serves as the basis for ensuring the model's viability, which represents a common gap in e-commerce literature (Rodríguez-García et al., 2016). ...
Nuestro estudio desarrolla el modelo de negocio de las subscription boxes de reposición para encontrar las claves de su viabilidad. Para ello, utilizamos el Business Model Canvas (BMC) en un estudio de caso longitudinal de cuatro años sobre una destacada start-up del sector. Nuestro estudio muestra que el éxito de estos modelos radica en un servicio altamente personalizado a los suscriptores para reducir la tasa de abandono. Además, las empresas necesitan una mejor asignación de recursos de marketing debido al alto coste de las pruebas gratuitas y estandarizar los procesos de reposición desde las primeras etapas de desarrollo.
... A subscription business model presupposes a long-term provider-customer relationship [4] based on a periodic payment (e.g., a monthly fee) which entitles the customer to unlimited use of the contents until the customer cancels the subscription. Various subscription models have recorded a tremendous growth, marking a 30-fold increase in demand between 2013 and 2016 alone [5]. The proliferation of the subscription model can be primarily attributed to the online distribution of digital content (e.g., Netflix and Spotify), and this new business model has been adopted by a growing number of businesses across a wide range of industries, including food, clothing, software, automobiles, airline tickets, and healthcare services. ...
... A subscription business model presupposes a long-term provider-customer relationship [4] based on a periodic payment (e.g., a monthly fee) which entitles the customer to unlimited use of the contents until the customer cancels the subscription. Various subscription models have recorded a tremendous growth, marking a 30-fold increase in demand between 2013 and 2016 alone [5]. The proliferation of the subscription model can be primarily attributed to the online distribution of digital content (e.g., Netflix and Spotify), and this new business model has been adopted by a growing number of businesses across a wide range of industries, including food, clothing, software, automobiles, airline tickets, and healthcare services. ...
This study examined changes in consumer perceptions of product types and purchase intentions when a subscription model is introduced for products normally sold on a one-time basis. It then proposed product types likely to affect consumers’ purchasing intentions in the subscription economy and product categories best suited for the subscription economy. To this end, an experimental study was conducted with experts and general consumers using 99 subscription business cases. It was found that a regular delivery of products on a subscription basis gradually changes consumer perceptions of the products from utilitarian to hedonic and from search to experience ones. It was also found that consumption motivation is an important predictor of consumer purchase intentions in the subscription economy. In addition, experience-utilitarian and search-utilitarian products were associated with the highest purchase intentions among experts and general consumers, respectively. This suggests that a company’s strategy should be adjusted in line with consumers’ understanding of the subscription model. Therefore, suppliers need to understand the full implications of the new model, such as changed consumer perceptions and purchasing intentions, and strive to design a subscription model that is suitable for the target segments and product selections.
... Given the number of firms moving to leverage this model and the number of failed subscription services from well-known companies, it is clear that managers need guidance on how to successfully navigate the SBS landscape. However, both the academic and practitioner literature has paid limited attention to subscription services (e.g., Bischof et al., 2020;Rudolph et al., 2017;Sivathanu, 2018;Noorda, 2019). Therefore, the purpose of this article is to assist managers who wish to navigate this industry. ...
... More specifically, we build on past investigations on subscriber characteristics (Woo & Ramkumar, 2018), subscriber motivations (Chen et al., 2018), subscription types (Bischof et. al., 2020) and subscription competition (Rudolph et al., 2017). These four elements create a foundation for understanding the subscription box industry. ...
... These four elements create a foundation for understanding the subscription box industry. For example, several studies (e.g., Bischof et al., 2020;Rudolph et al., 2017) have identified and legitimized the need to understand subscription box categorization (categories) from a strategic perspective as each category holds a different value proposition. ...
The subscription box e-commerce industry has experienced tremendous growth over the last five years. Given the growing size of the industry, this business model warrants direction for firms currently offering subscription services as well as companies considering entering this industry. This paper presents a detailed overview of the subscription box industry and proposes a framework for understanding subscription offerings (the 4 C’s). Second, it identifies challenges and opportunities facing this industry. Lastly, it provides managers with guidance in the form of five tenets on how to navigate the subscription box economy.
... Foto: © iStockphoto D ie Umstellung vom Lizenzverkauf zu Subskriptionsabonnements hat Unternehmen im B-to-C- [1] aber auch im B-to-B-Bereich zu einem immensen Wachstum beflügelt. Subskriptionsmodelle verschieben allerdings durch die Reduzierung von Wechselkosten das Machtgefälle hin zum Kunden [2]. ...
Zur Erhöhung der Wertschöpfung beim Kunden führen immer mehr Unternehmen eine neuartige Position ein: den Customer-Success- Manager. Firmen wird bei der Einsetzung dieser Rolle empfohlen, auf eine klar definierte Aufgaben- und Rollenverteilung sowie auf eine kundenzentrierte Incentivierung und Weiterbildung zu achten.
Der Artikel erschien in der Swiss Marketing Review, der Verbandszeitschrift des Verbands "Swiss Marketing".
... Although this might be difficult to apply to the machines, it might be possible to apply to machine components, given a modular design. Customers also enjoy a significant financial Risk Sharing In order to establish a trustful long-term relationship with the customers, successful subscription providers take upon more risks than in traditional business models [14]. At the same time, risk sharing creates an intrinsic motivation for providers to improve their performance continuously. ...
Machinery and equipment manufacturers especially from high wage countries are increasingly under pressure to extend their competitive differentiation. Studies show that innovation in business models can create stronger differentiation than innovation in products and processes. Especially in the software industry, subscription-based business models have recently formed new champions who dominate the markets. Unfortunately, it is so far unclear what “subscription” means in the machinery and equipment industry, what offers it can contain and how the offers can be delivered. This work supports machinery and equipment manufacturers by answering these three fundamental questions. Firstly, an adequate definition of subscription business models in the machinery and equipment industry is introduced. Secondly, a holistic understanding of potential offers within a subscription business model is provided. Thirdly, supporting success factors and requirements for the creation of the offers are identified.
... Moreover, the majority of these shoppers are using curated subscription services that provide personalized products including food, beauty, and apparel (Chen, Fenyo, Yang, & Zhang, 2018). Consumers' changing demand may drive this business model to thrive (Rudolph, Bischof, Böttger, & Weiler, 2017); in particular, the fashion consumers' demand is changing rapidly, where inspirational and fun shopping experiences become a part of the consumption in addition to convenience (Randall, Lewis, & Davis, 2016). A curated fashion subscription service provides convenience to consumers by bringing the trial room experience to the door . ...
