Subscription Commerce

Coca-Cola Joins Subscription Gold Rush

You may subscribe to The Wall Street Journal, Apple Music and very likely to Netflix, among the monthly services people sign up for. That’s awesome. But are you subscribed to Coca-Cola?

The carbonated colossus has a new monthly subscription box service called “The Insiders Club” promising Coke swag and new flavors. On the surface it looks like another cool marketing push from possibly the most recognized consumer brand on earth. Under the surface, however, some market watchers think Coke is trying to reverse a recent and unexpected 4 percent slide in brand value. Other unlikely names — Arby’s and Dairy Queen among them — are testing the waters of recurring monthly boxes of stuff we’ve never thought of “subscribing” to before.

Decoding market dynamics around these trends, the latest PYMNTS Subscription Commerce Tracker®, done in collaboration with Recurly, supplies answers and actionable intel on why and how more companies are using recurring subscription revenue as a cornerstone of business.

Consumer Sea Change?

The subscription gold rush is one of the more fascinating stories in business right now, as it subsumes not only aspects of connected commerce, but also deeply held beliefs about affordability and sustainability that resonate with today’s most avid consumers.

The February 2020 PYMNTS Subscription Commerce Tracker® details transformative experiences tailored for the sharing economy. It’s being dubbed “the end of ownership” and a 2019 Harris Poll conducted for platform provider Zuoro suggests that it’s growing mightily. Close to 90 percent of U.S. adults polled by PwC now think sharing is more economical. Reflecting that, revenue grew 21 percent for the top 100 subscription apps in 2019.

If one name typifies the new power of subscription revenue it’s Patreon, the content membership platform widely used to monetize podcasts. The company’s model of “patrons” pledging recurring monthly donations to podcasters caught on fast and was on its way to becoming a verb (or at least a noun) when Patreon tried to pass fees onto customers. Platform creators freaked, along with their listeners. Patreon changed the policy and learned a valuable lesson about inserting itself in between podcasters, their audiences, and their recurring revenues.

Wyatt Jenkins, senior vice president of product at Patreon, told PYMNTS, “It’s our job to respect the relationship between creators and their fans. We help [the former] acquire fans and retain fans, but we don’t get in between [them and their] fans. That was a pretty important lesson for us, and you can see a lot of that in our rollouts since.” The rollouts he’s referring to are the tiered pricing models and fee flexibility that Patreon adopted after the subscriber kerfuffle.

Rent the World

Very few were thinking “sustainability” when sharing first took off; it was about personal economies, not macroeconomics. But the fact is that sharing — which in many cases means renting and even fractional ownership — is catching on for its sustainable nature as much as anything. From Cadillac cars to clothing, we’re entering a phase where almost everything you can buy will also have a “for rent” sign on it, too. That’s the direction of subscription commerce.

Considering that more than 30 percent of U.S. adults intend to increase their subscriptions in the next two years, it’s no wonder that master marketing organizations including Coca-Cola want to get in on it. Those that do increasingly go with established platforms offering secure payments.

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