June 25, 2014

Study finds that more than half of French people are moving away from traditional models of consumption

Summary of findings:

1 in 2 French people wish to consume more products by subscriptions

This figure increases to 61% among young people, 57% in higher socio-professional categories and 54% in the Paris region

This trend is most visible among cultural products which more people purchase by subscription (print, movies, music)

This new model of consumption will affect many more products in the future – from travel (according to 58% of respondents), mobile phones (55%) and IT (51%), to toys (43%), fashion accessories (41%), clothes from top brands (38%), household appliances (30%) and furniture (23%)

Early adopters of the Subscription Economy associate this model with freedom (35% of managers and 34% of young people), fun (33% of managers) and social status (35% of young people)

Foster City, CA – June 26, 2014

Zuora, the subscription billing, commerce and finance leader, today unveiled the results of a study conducted by the Institut Français D’opinion Publique (IFOP), highlighting profound changes occurring in the consumption patterns in French markets. Although ownership is still the dominant consumption model, the study reveals that it is increasingly challenged by the emergence of the Subscription Economy.[1]

Study results show that current ownership models no longer meet the demands of consumers who now favor flexibility and unlimited access. The French associate subscription models with values typically associated with the Cloud ​​(innovation, freedom and shared services).

SUBSCRIPTION ECONOMY DISRUPTS TRADITIONAL CONSUMPTION MODELS IN FRANCE

An analysis of the IFOP survey reveals the extent of this disruption in traditional consumption patterns in France: 49% of those surveyed expressed a desire to subscribe to more products and services in the coming year, with another 5% saying they want to do so much more. Early adopters of the Subscription Economy (already using it or those who are ready to make more use of it) are young (61%), affluent (57%) and urban (50%), with a large sample living in the Paris region (54%). This appetite for the advantages that come with these new consumption models is stimulating further development: For an increasing proportion of French people, the ability to easily renew their contracts and to have the latest models are increasingly important benefits: 37% and 29% respectively. This commitment to renewal and innovation is found especially among the younger population (52% and 43% respectively among 18-24 year olds) and those with the lowest incomes (less than 1200 euros: 50% and 40% respectively).

THE SUBSCRIPTION ECONOMY: ESPECIALLY POPULAR WITH THE AFFLUENT AND WELL-EDUCATED

To the French, subscriptions are an attractive alternative to traditional consumption, with French people calling subscriptions innovative (53%), unrestricted (53%) and shared (57%), values that are typically associated with the Internet. Equally important are the concepts of sustainable development, diversity of choice and immediacy, attributed to this model by almost half of the French population (respectively 47%, 47% and 49%). Conversely, the term “accumulation” evoked negative connotations with those sampled, suggesting that traditional models of ownership are not compliant with the desire for “responsible consumption” among a large majority of French (70%).

For young people, and professionals, the values ​​of freedom (35% of managers and 34% of young people), fun (33% of managers) and social status (35% of young people) are the drivers for growth for the subscription model.

THE SUBSCRIPTION MODEL IS ANCHORED IN THE DAILY ROUTINE OF THE FRENCH AND WILL BE MORE WIDELY ADOPTED THROUGH ALL PRODUCTS AND SERVICES

The success of the Subscription Economy is best represented among intangible cultural products such as printed media, movies and music (22%, 10% and 9% of French are already subscribed). The young and higher socio-professional categories are most likely to subscribe to products and services.

73% of French believe that this model of consumption will grow more in the future. Although the survey showed that intangible products are best adapted to this new model of consumption, this trend is expected to spread to a wide range of products and services. In fact, 87% of French people see this model as suitable for the film market, 74% for books and cultural products, and 69% for music. In the future, all products and services could be consumed in this way. More than half of the French people sampled predict a future for the subscription model in the automotive (69%), travel (58%), mobile phone (55%) and computer hardware (51%) industries.

Finally, a large proportion of French also predict that more intimate products such as toys (43%), fashion accessories (41%), clothing brands (38%), household appliances (30%) and furniture (23%), will also be consumed through subscriptions.

SURVEY METHODOLOGY

This survey was conducted by IFOP among a sample of 1,001 representatives of the French population, aged 18 years and over (an accurate representation of the population was ensured through regional and social profiling). The interviews submitted their responses online (CAWI – Computer Assisted Web Interviewing), between May 26-28, 2014.

Zuora Commentary:

“While the ownership model is still dominant today in France, subscription models are challenging traditional consumption models by better meeting market needs and offering flexibility and freedom for consumers,” explains Philippe Van Hove, Director Southern Europe at Zuora. “This change in consumption trends creates new opportunities for businesses. The Subscription Economy is an opportunity to leverage new business models, stimulate consumption and create new sources of income”.

ADDITIONAL RESOURCES:

· Blog: Allez Le Subscription Economy: New French Consumer Trends

· Infographic: Ownership is Dying: Subscriptions are Emerging as a New Mode of Consumption in France

About Zuora, Inc.

Recently ranked #11 on the annual CNBC Disruptor 50 list, Zuora is the global leader in Relationship Business Management solutions, helping companies in every industry transition to the Subscription Economy. Enterprise leaders and high-growth companies alike use Zuora’s multi-tenant cloud platform to launch, scale, and monetize their subscription services. Built from the ground up by SaaS industry veterans from salesforce.com, PayPal, and Netsuite, Zuora services innovative customers like GDF Suez, TripAdvisor, Liberacion, Neopost & Sage. To learn more about Zuora, please visit www.zuora.com.

[1] The Subscription Economy (consuming by subscription) is defined as a means for leasing a product or service, and using it throughout the duration of the subscription, without actually owning it.