Business Model Transformation in Subscription-Based Digital Markets

  • Authors

    • Marco Bianchi Operations Manager, Ferrari, Italy. Author
    • Laura Conti Operations Manager, Ferrari, Italy. Author

    DOI:

    https://doi.org/10.67228/3071642X/IJCFDE-2020PI2B5P

    Published 05-04-2020

  • Subscription Commerce, Business Model Innovation, Recurring Revenue, Digital Platforms, Customer Retention, Subscription Economy, Digital Transformation, Platform Business Models

    Issue

    Vol. 3 No. 1 (2020)

    Section

    Articles

    How to Cite

    Bianchi, M., & Conti, L. (2020). Business Model Transformation in Subscription-Based Digital Markets. International Journal of Commerce, Finance and Digital Economy, 3(1), 01-16. https://doi.org/10.67228/3071642X/IJCFDE-2020PI2B5P

  • Abstract

    Subscription-based business models have emerged as a major force in the digital economy, enabling businesses to generate recurring revenue, enhance customer loyalty, and build long-term relationships. Widely adopted across industries such as software, media, retail, healthcare, and education, these models emphasize continuous value delivery rather than one-time transactions. Technological advancements including cloud computing, mobile applications, artificial intelligence, and data analytics have accelerated the growth of subscription commerce. Various models such as membership-based, freemium, curated, replacement-based, and hybrid subscriptions have evolved to meet changing customer needs. While challenges such as customer churn, subscription fatigue, and pricing optimization remain, innovative strategies supported by AI, predictive analytics, and digital platforms help improve personalization, retention, and operational efficiency. The study finds that organizations implementing innovative subscription models achieve higher customer lifetime value, stronger retention rates, and more predictable revenues, making subscription commerce a key component of future digital business strategies.

  • References

    [1] J. T. Cusumano, S. J. Kahl, and F. F. Suarez, “Services, Industry Evolution, and the Competitive Strategies of Product Firms,” Strategic Management Journal, vol. 36, no. 4, pp. 559–575, 2015.

    [2] W. Reinartz and W. Ulaga, “How to Sell Services More Profitably,” Harvard Business Review, vol. 86, no. 5, pp. 90–96, 2008.

    [3] A. Osterwalder and Y. Pigneur, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ, USA: Wiley, 2010.

    [4] T. Eisenmann, G. Parker, and M. Van Alstyne, “Platform Envelopment,” Strategic Management Journal, vol. 32, no. 12, pp. 1270–1285, 2011.

    [5] P. Weill and S. L. Woerner, “Optimizing Your Digital Business Model,” MIT Sloan Management Review, vol. 54, no. 3, pp. 71–78, 2013.

    [6] S. Vargo and R. Lusch, “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing, vol. 68, no. 1, pp. 1–17, 2004.

    [7] M. R. Solomon, Consumer Behavior: Buying, Having, and Being, 12th ed. London, U.K.: Pearson Education, 2018.

    [8] T. H. Davenport, R. Guha, D. Grewal, and T. Bressgott, “How Artificial Intelligence Will Change the Future of Marketing,” Journal of the Academy of Marketing Science, vol. 48, no. 1, pp. 24–42, 2020.

    [9] E. Brynjolfsson and A. McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY, USA: W. W. Norton & Company, 2014.

    [10] M. Porter and J. Heppelmann, “How Smart, Connected Products Are Transforming Competition,” Harvard Business Review, vol. 92, no. 11, pp. 64–88, 2014.

    [11] F. Reichheld and W. E. Sasser, “Zero Defections: Quality Comes to Services,” Harvard Business Review, vol. 68, no. 5, pp. 105–111, 1990.

    [12] V. Kumar and W. Reinartz, Customer Relationship Management: Concept, Strategy, and Tools, 3rd ed. Berlin, Germany: Springer, 2018.

    [13] P. Fader, Customer Centricity: Focus on the Right Customers for Strategic Advantage. Philadelphia, PA, USA: Wharton Digital Press, 2012.

    [14] G. Parker, M. Van Alstyne, and S. Choudary, Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You. New York, NY, USA: W. W. Norton & Company, 2016.

    [15] K. Lemon and P. Verhoef, “Understanding Customer Experience Throughout the Customer Journey,” Journal of Marketing, vol. 80, no. 6, pp. 69–96, 2016.

  • Downloads

Similar Articles

51-60 of 87

You may also start an advanced similarity search for this article.