Nordic Subscription Economy: Week 31 -2021

By  Recuro
Aug 4th 2021
Read time: 
3 minutes
Table of contents

Weekly news roundup

1. Stjärnurmakarna’s subscription service for watches is out of the starting pits  -

Two months ago, the Swedish retail chain Stjärnurmakarna presented a subscription service which allows customers to choose watches and jewelry, which can later be changed, for a monthly cost. The chain’s CEO Peter Simonsson, says customers are interested, but that the service is not up to full speed yet.

“We see, for example, some families who get a family subscription where the children, mother and father can each have a watch because you can have up to four watches on the subscription.”

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2. Norway’s electric car subscription service imove receives $22.3M in funding - Techcrunch

Imove is a white-label platform offered to the automotive industry to enable it to offer car subscription services under their own brands. Imove’s platform allows users to subscribe to electric vehicles from 18 different manufacturers and more than 50 different models.

“While imove is clearly moving fast in Europe, there are several players offering technology for car subscription and fleet management. These include Ridecell (U.S.-based), Clutch (U.S.-based, owned by Cox Automotive), Fleetonomy (Israel) and Vulog (France). So there’s plenty to play for in this race yet.”

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3. Tesla launches subscription service for advanced driver assistance software - Reuters

The EV makes has now introduced an option for some customers to subscribe to its advanced driver assistance software, dubbed "Full Self-Driving capability", for $199 per month, instead of paying $10,000 upfront.

“Tesla has previously said its subscription service would generate recurring revenue and expand the customer base for pricy features including lane changing on highways and parking assistance.”

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4. Pearson launches $14.99 per month textbook subscription service - Edscoop

In addition to its traditional sales model, the publishing house Pearson has unveiled a subscription service that includes more than 1,500 digital textbooks.

“While 70% of Pearson’s higher education revenue already comes from digital products, Pearson+ is also designed to help us regain a portion of the more than 14 million textbooks lost to the secondary market and non-consumption”

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5. Amazon launches a monthly vinyl subscription service -

Streaming music is all the rage these days, but vinyl has seen a major resurgence in the last few years. To cater to analog sound lovers and vinyl fans in the US, Amazon is launching a new subscription service called Vinyl of the Month Club. The service will deliver surprise 1960’s and 1970’s vinyl records to customers’ doorsteps, every 30 days, for $24.99 USD.

“[...] albums that don’t meet the subscriber’s musical taste can be returned at no extra cost (as long as they’re sealed and unused), and the subscription can also be canceled at any time.”

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Weekly analysis roundup

1. 32 % of 16-24 year olds in the US have a subscription for a physical product - Emarsys

In the last nine years, the subscription economy has grown nearly 6x and young people are leading the way. According to a survey by retail tech company Emarsys, 32% of 16-24 year olds in the US have a subscription, whereas only 7% of those aged 55+ have one.

“According to Emarsys’ research, “Emotional factors are central to people’s motivations for signing up [to subscriptions], as 32% of US consumers surveyed admitted they signed up to the subscription because it feels nice to receive something every month.”

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2. Trust: The most important element of a successful subscription model - Vindicia

When a customer subscribes to a product or service, they have no choice but to trust the company every single day, writes Vindicia in a blogpost breaking down what trust means in a subscription based consumer relationship.

“[...] if a business can’t be trusted, why on earth would any customer open their wallets? And for subscription companies, the question is even bigger: what does it take to get customers to trust enough that they are willing to open their wallets automatically and continually, every week or month?”

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3. How much of your subscription revenue should be coming from usage-based pricing? -

Looking through three years worth of data from the Zuora Platform, Tien Tzuo, CEO at Zuora, finds that having a rate of 1-25 % usage-based pricing, as opposed to a more rigid pricing structure, is the sweet spot for subscription companies wanting to optimze their revenue growth and churn.

“[Companies] with 1 to 25% of their revenue generated through usage-based pricing showed the best performance across overall revenue growth (25%), average revenue per account growth (13.6%) and churn (26%). In contrast, companies with no usage-based pricing had slightly slower revenue growth (19%), ARPA growth (9.4%), and higher churn rates (33%).”

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