It's safe to say the global markets were largely caught off-guard by the COVID-19 pandemic. It is worth noting, however, that certain types of businesses, particularly those with subscription models, have seen unprecedented growth and success over the past year. When we look at examples of organizations thriving during the pandemic, companies can gather valuable insight towards updating their own business models for a post-COVID world.
Netflix
Most businesses did not weather global stay-at-home orders with ease. The same can't be said for streaming service Netflix, which gained tens of millions of new subscribers during the first quarter of 2020. Netflix shares have soared more than 60% since the beginning of the year, and to compare, the S&P 500 is up just 6.5% in 2020. The firm's billionaire co-founder and CEO, Reed Hastings, has pocketed nearly $2 billion during the pandemic. Hastings launched Netflix as a DVD subscription service in 1997 and owns roughly 1% of its shares, which is now worth about $5.4 billion, according to Forbes.
As a whole, streaming services have done well as a result of lockdowns. With movie theatres and other entertainment venues closed or restricted, people are looking for safe and effective ways to pass the time. Netflix's huge back catalog, given periodic boosts through new and exclusive content, keeps people coming back for more.
Takeaway: With its massive incoming revenue from subscriptions, Netflix leverages a huge catalog that meets high consumer demand. They've succeeded by offering more than their competitors by investing in user-focused services.
Zoom
Another company thriving amid the COVID-19 pandemic is videoconferencing powerhouse Zoom. As businesses transitioned from in-person to hybrid and work-from-home (WFH) models, Zoom's paid subscriptions skyrocketed. By the May-July period of 2020, their revenue had more than quadrupled from the same time the year before, hitting $663.5 million. While the pandemic has certainly driven everyone, from small businesses to large corporations, toward videoconferencing, there's a reason so many of them have chosen Zoom to host their meetings. Zoom's high-quality and accessible platform quickly made it the most popular option amid a crowded market.
Takeaway: Zoom prospered during the pandemic by fostering the growth of its existing reputation for clear and accessible communication. They've succeeded by doing what they do better than their competitors.
Flower House Dubai
From global giants to local businesses, subscription services continue to do well. Seeing an opportunity to help people beautify their homes during the lockdown, Flower House Dubai offers both weekly and bi-weekly delivery of fresh flowers right to their customers' doorsteps. Because each week's design is fresh and unique, customers always have something new and beautiful to look forward to.
Takeaway: Flower House Dubai developed a business model that flourished during the past year by building a sustainable stream of anticipation and excitement around their existing products and services.
On the whole, companies that favor a subscription model have fared well during this pandemic year. With in-person shopping on the decline due to public health concerns, e-commerce and hybrid commerce models are on the rise. Everything from software to streaming services to meal kits, pajamas, and pet supplies can now be ordered through regular subscription models. Whether it's offering more, better, or unexpected services to clients, any business model that uses creative solutions that focus on a client-first approach will always reap the rewards.
3 strategies to adopt in 2021
Be nimble. Empowering leaders and management to develop and execute new ideas and processes can result in faster response rates to consumer trends.
Understand your strength. Knowing your edge against your competition and focusing on making processes leaner with greater client value will keep you on top.
Invest in client satisfaction. Reevaluate your business and your priority towards client retention. Happy clients means a longer, more fruitful relationship.