The Subscription Economy and the Retail Industry


The history of trade extends to more than 150,000 years back, and it kept evolving throughout centuries. The first transaction started with two people exchanging consumable goods of different shapes and quantities, until the creation of the first known coin currency changed the way we valuated goods, almost 5,000 years ago. And from goods being exchanged in-person to the creation of the first local street marketplace, where trading was conceived as one of the very first forms of conducting business.

The evolution of trading never stopped, and the mechanisms of trading kept changing from one era to another. Small in-person type of exchanges evolved to include large wholesale-like transactions. And local street marketplaces grew into different models, such privately-owned shops, up until to what we know in our modern day as retail stores.

Transition from organic walk-in conversions to personalized customer acquisition

The growth of such retail stores had always been fueled by consumer demand and was highly influenced by geography, such as densely populated areas that meant higher conversion rates. This was the success recipe for retailers over the past decades, where their operating model was dependent on large numbers of transactions. According to Forbes’ Mary Allen, some consumer electronics retailers operated on margins as low as 2% but were able to make sufficient profits through volume.

The expectancy of making large volumes of transactions while relying on walk-in conversions had significantly dropped post-COVID-19, if not flattened. Fry’s Electronics shutdown served as a wake-up call to the industry, indicating the need to innovate and develop new ways of enabling consumers to find the products they need, and even uncover the need for new products and services that would make their life more convenient without having to be physically present in a retail store.

According to a recent retail study conducted by Infosys, more than 86% of consumers indicated that personalized recommendations highly influenced their buying decisions. With very little margins in hardware and almost no room to differentiate against competition, consumer electronics retailers are realizing the need to keep evolving and personalizing the way they approach consumers, cross-sell different products, and provide post-sales services more conveniently.

The consumer relationship continuum effect 

An ideal world for a brand is when their consumers are not reactively approaching them to fulfill the demand for a product, but when their consumers become brand advocates and proactively promote them to their network without any external motivation. This is influenced by the relationship the brand manages to build with the consumers over time. 

Since electronics tend to have the longest refresh cycle among other products, it was harder for retailers to reach these consumers as frequently as expected. A consumer is expected to visit a grocery store once a week but visit a consumer electronics retail store once a year. Having had such a small window, consumer electronics retailers are studying and implementing subscription-based models better than others. This is increasing their frequency of communicating with their customers, reducing financial blockers as appliances no longer have to be paid for in advance, and increasing convenience.

Continuously communicating is key to build a sustainable relationship with consumers. Subscription-based services allow retailers to connect with their consumers 12 times more every year and increase their average customer lifetime value. One of the successful models is BestBuy’s Total Tech Support, a comprehensive support service with more than one million subscribers in the first year. Moreover, BestBuy offers their consumers the ability to bundle their products with monthly-based warranty and protection services. These changes are enabling BestBuy to yield higher profits, communicate and engage with consumers more, and improve their ability to cross-sell and upsell different plans and services. 

The future of the consumer electronics retail industry is being reshaped with these significant changes that are helping retailers change the way they sell, make higher margins, increase customer acquisition and retention, and succeed like never before. 

Becoming a services-centric organization  

Consumers are easily adapting subscription-based models as they had been introduced to leasing years back. Consumers understand the flexibility they have when paying in smaller installments, rather than large upfront payments. Subscription-based models bring more than just flexibility in pricing structures. They transform how companies combine different products and services as a part of a recurring offer. This is helping retailers improve their customer ownership, significantly increase their average order value as well as the margins they are able to make on a span of 3-5 years, and eventually enables the consumer with far more convenience. 

Boulanger, a French consumer electronics retailer, was able to take that model ten steps ahead. With consumers introduced to leasing models on handheld devices in the past few years, Boulanger implemented a broader anything-as-a-service model on their catalog and made it easier for their consumers to adopt. They were able to bundle their devices along with warranty, installation, and repair services in a monthly-based subscription fee. This was not limited to handheld phones or tablets as other competitors did, but expanded beyond that to include professional cameras, televisions, coffee machines, and many more. 

There are hundreds of different consumer electronics retailers across Europe, where each of them is able to supply the same devices and appliances to consumers at ease. What made Boulanger unique was the way they packaged their value-added repair and maintenance services, along with warranty and guarantee services, on top of the products they sell at a simple two-digit subscription fee on monthly basis. These services-led bundles enabled Boulanger to attract more consumers, helped increase their operating margins, and dramatically increased their average order value. 

Transformation brings a fresh new perspective 

The transformation the as-a-service economy is bringing to the game, changing the dynamics of the industry, and changing the way large retail giants plan and operate. Fueled by the pressure and disruption the pandemic is bringing to the consumer electronics retail landscape, COVID-19 was way more influential than the evangelism efforts for digital transformation over the past years yet continues to bring to show that change creates innovation, improvement, and growth. Other consumer electronics retailers that are still deciding on their transformation must understand that to further grow and differentiate themselves among competition. Joining Fry’s Electronics shutdown queue is not far from any consumer electronics retailer if transforming their business is not a priority on their roadmap 

Get in touch with CloudBlue to learn how we are helping consumer electronics retailers offer a wider array of offerings through bundled solutions, device as a service offering, and open marketplaces. For additional information, read how consumer electronics retailers can achieve even greater growth by maximizing customer convenience and expanding their catalog of solutions and services offering. 

Mike Jennett, Director of CloudBlue Platform Strategy, is an accomplished business and technology executive. With a deep focus on product development and go-to-market strategy, he plays a pivotal role driving strategic growth and market expansion. Mike’s career is characterized by his adeptness in driving technological advancements and his commitment to leading digital transformations with experience including IDC where he was VP of the Mobility and Digital Transformation IEP practices, and HP where he held numerous leadership roles. Mike’s expertise is also reflected in his published works and contributions to multiple tech publications. Mike holds a B.A. from California Polytechnic University.
Having previously to strategic product management, agile transformations, and user experience in CloudBlue, Taylor Giddens heads the Services & Solutions team where he ensures smooth delivery, operations and solution growth for our partners and customers.

The team includes technical account management, managed services, support, custom solution development, and customer enablement.

Prior to CloudBlue, his resume boasts leadership of some of the world’s largest companies during their digital transformations and marketplace launches. Taylor is a practitioner of servitude leadership when it comes to enabling his team to drive positive outcomes on the road to operational excellence.
Laurens van Alphen, a visionary entrepreneur with over 29 years of internet technology expertise, serves as Director of Technical Managed Services at CloudBlue, responsible for Operations and Delivery of CloudBlue SaaS.

As a Dutch racing champion and car enthusiast, he brings the same drive to the tech realm, steering Keenondots from a managed hosting firm to a global cloud enablement leader. Laurens is celebrated for his outcome-driven leadership, deep industry insight, and passion for balancing business innovation with client engagement.
Lincoln Lincoln is CloudBlue’s Head of Global Sales; having been with the company since November 2017. Leading CloudBlue’s global go-to-market organization, he’s responsible for driving accelerated and sustained mutual growth with CloudBlue’s customers and partners, as well as forming new customer partnerships across the Vendor and Provider ecosystem. As part of CloudBlue’s leadership team he is responsible the organisation’s revenue and continued market leadership by delivering and supporting products, services and solutions to organizations in established and new markets around the world.

Before joining CloudBlue, Lincoln was AppDirect’s Regional Director, Asia Pacific & Japan, responsible for forming, building and leading AppDirect’s business and operations across the APJ geography. He built and led AppDirect’s fastest growing and highest performing region globally within 3yrs.

Before joining AppDirect, Lincoln was EMC’s Practice Manager, Cloud Service Providers, APJ, working with the leading Service Providers to maximise their Cloud Business presence & market success. Lincoln joined EMC in 2007, and has over 20 years’ experience in the IT industry, having been based out of Singapore, Australia and the UK. Prior to EMC, he was in range of sales and channel positions at Symantec and VERITAS.

Lincoln has an Honours degree in Business Administration from Kingston University in the United Kingdom.
Brent Clooney is the Executive Director and Associate General Counsel for Ingram Micro Inc., and lead counsel for CloudBlue.

Brent is a Canadian based corporate lawyer with more than 20 years of experience as a strategic legal advisor both in private practice and as in-house counsel to large multi-national companies. Prior to joining Ingram Micro in 2008, he worked at a well-respected corporate law firm in Toronto, Canada and later served as general counsel for Toshiba Canada. During his 15-year tenure at Ingram Micro, he has held positions of increasing complexity and responsibility, and since being promoted to his current role in 2022, Brent is the legal lead for both Ingram Micro’s Canadian and global cloud businesses, as well as CloudBlue.

Brent holds a law degree (LL.B.) from Queen’s University, a Psychology degree (B.A. Honours) from Lakehead University, and has been admitted to the bar in Ontario, Canada since 2002.
Anurag serves as the Head of Product Management for CloudBlue and is responsible for product direction and driving innovation. His leadership has been marked by a keen focus on customer needs, growing the ISV ecosystem, and ensuring the continual evolution of CloudBlue’s product portfolio.

Anurag joined Ingram Micro in 2017 and has been instrumental in, positioning CloudBlue as an industry leading monetization platform for MSP’s, Telco’s and Distributors. Previously Anurag worked at Oracle and Microsoft where he managed many technology projects and programs.
As VP of Engineering of CloudBlue, Rony oversees the development and engineering efforts of the company. He is a recognized leader with more than 25 years of experience in Technology and Product.

Prior to joining CloudBlue Rony lead the R&D efforts at Tripwire acquired by Thoma Bravo, and Cedexis acquired by Citrix. Rony is a leader with extensive experience in transforming both complex technology problems into products that customers love and disjointed organizations into agile high performing teams.
Coen is a distinguished leader and entrepreneur in the realm of cloud technology. Currently serving as CEO of Keenondots and the Global Director of CloudBlue SaaS. He is passionate about driving innovation, fostering collaboration, and leading high-performing teams to achieve transformative results.

With a background as Managing Director of INTO Cloud and a pivotal role as Director of Products of KPN, he brings a wealth of experience in steering organizations through the complexities of the digital landscape.

Beyond the boardroom, Coen is a marathon enthusiast, demonstrating endurance and discipline in pursuit of both professional and personal goals.
Alyson has over twenty years of experience in demand generation, marketing automation and data management. She is responsible for leading the strategy and direction of the company’s brand, performance, and digital marketing.

Prior to CloudBlue, Alyson served as Ingram Micro’s Director of Global Business Intelligence Marketing Automation driving channel partner campaigns. Her tenure in marketing leadership at prestigious companies such as Western Digital, Ocean Institute celebrates redefining marketing campaigns and building top performing teams based on trust, experimentation, and results.

Alyson resides with her husband and three children in Orange County and is an active volunteer and donor within her children’s sports and education programs.

Darek Tasak is leading Customer Success & Value Creation for CloudBlue. In his role, he looks after CloudBlue customers globally during the entire lifecycle of our relationship: from the initial on-boarding, through in-life account management, always ensuring they build successful businesses leveraging our technology. Additionally, he is also in charge of Partnership & Alliances, as well as Pricing Management for everything we commercialize.

Before CloudBlue, Darek managed Ingram Micro’s Services division for hi-tech customers in Europe & APAC. His prior experiences include also launching and leading pan-European services business for TDSynnex, as well as strategy consulting with Boston Consulting Group (BCG).

As President of CloudBlue, Uddhav is a distinguished leader and visionary with nearly two decades of platform-building experience. He is an industry leader in digital commerce, the subscription economy, and monetization platforms.

Notably, at SAP, he spearheaded the transformation of their platform business into a multi-cloud platform-as-a-service, offering enterprise and developer-friendly subscription models. At Pure Storage, he championed the efforts to successfully disrupt the storage industry by creating revolutionary Storage-as-a-service, AIOps-as-a-service, and Disaster Recovery-as-a-service offerings with cutting-edge features and establishing a sophisticated subscription commerce infrastructure that is channel-friendly.

At CloudBlue, Uddhav guides and empowers businesses to rethink their monetization strategies by unlocking the power of digital ecosystems and marketplaces. CloudBlue provides enterprises with a mature multi-tier, multi-channel marketplace and monetization platform that enables usage-based subscription models and global delivery of Anything-as-a-Service solutions. Uddhav has played a pivotal role in shaping the future of the subscription economy through his innovative thinking and impactful contributions.

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