The future reimagined

The Rise of the Subscription Economy

Changing Behaviour

Can you subscribe your way to happiness? Well, no, but subscription services DO make your life gazillion times more convenient.

Where do you get your music from? Let me guess, Spotify. Where do you head when you need downtime with a mindless comedy routine? Netflix. And what about groceries? It sure would be great to get a box of ingredients with matching recipes delivered to your door every week – and actually, you can. 

All of the aforementioned services have a common denominator: they’re based on a subscription. And their popularity is on the rise. According to Forbes, the subscription e-commerce market has increased by more than 100% percent annually during the last five years.

A prime (pun intended) example of this is Amazon, who have, with the Amazon Prime loyalty program managed to attract an overwhelming 100 million subscribers. The concept combines e-commerce of physical goods and digital services. With a membership fee of $119 per year or $12.99 per month you become entitled to multiple perks including free and speedy shipping (from two days to a couple of hours) and streaming music and video. 

Sadly, none of this is yet available in Finland. But as e-commerce grows, how far along are we in getting our own subscription-based e-commerce service in style of Amazon Prime? Ville Vasaramäki, Head of SME services at Posti, makes educated guesses.  

Order small – swiftly and securely

”To be frank, we are lagging a bit behind”, Vasaramäki says. “On average, Finns order 10–15 packages a year online while those subscribing to Amazon Prime or its Australian equivalent, Shipster, might amount to 50 or even hundreds.” 

We should get on board soon, though. Subscription-based online shopping, Vasaramäki attests, has two great benefits. 

First, it allows customers to make small purchases easily. “Ordering a single toothbrush or shoelaces for €3 makes just as much sense as ordering a pair of expensive sneakers. The sales funnel is open, and shipping won’t cost you any extra.” 

Second, it guarantees fast, trackable deliveries. “Online shopping still contains an element of uncertainty for some. With these kinds of services, one doesn’t have to worry about when their purchase will reach them. This is a very important factor.”

It should come as no surprise, then, that those subscribing to e-commerce loyalty programs spend double or even four times more annually than the average customer.

Megatrends manifest in changing consumer behavior

Sustainability, digitalization and personalization are some buzzwords linked to the changing consumerism of the 2020s. Concurrently, the pace of life is speeding up and work isn’t confined to the traditional 9 to 5 anymore. 

Vasaramäki maintains that the subscription model is a reaction to these demands – and a cure for some ailments, too. 

“These services give you flexibility and freedom. People’s lifestyles and schedules are ever so different. It is easier to manage your life if you can run errands whenever you want and stream your favorite show when you have time for it.”

And while it isn’t entirely clear, which is more green, online shopping or traditional brick-and-mortar, Vasaramäki notes an important sustainability point of view: 

“Online shopping on a large platform provides consumers with a tremendous possibility to compare products and seek information on them. It is much easier to find ecological solutions online than by running around in actual shops.”

Come on, Amazon, Posti is ready for you

Vasaramäki looks forward to Amazon Prime becoming available in Finland – or a domestic e-commerce operator taking on the challenge of creating something similar.  

“For a service like this to be successful it would require a selection of millions of products. The big grocery chains in Finland might be the ones able to pull it off.”

In the meanwhile, Posti prepares to meet the needs of the growing number of online shoppers. Customers are particularly interested in the ‘last mile’ of their purchase. When will they get the product and how? The more orders, the more important this becomes. 

That is why Posti has put efforts into developing its direct delivery and automated pick-up services. The number of Smartpost pick up stations, where customers can collect their packages whenever it is most convenient for them, has tripled in two years from 500 to 1500. And delivery times are faster than ever:

“Actually, Posti’s average delivery time on packages is no more than a day. Sadly, this doesn’t always translate to customers as the previous steps, like pick-up at the warehouse and packaging, operated by the web shop owner, might take considerably longer.” 

And while we still don’t have access to Amazon Prime, at least we have OmaPosti. Posti’s app allows customers to track their deliveries and for example get an extension on a package’s pick-up deadline. Operating everything concerning your order from the serenity of your summer cabin simply by using an app is one step closer to an effortless subscription economy. 

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