Visioning the future of subscriptions with citizenM

Subscriptions today are no longer limited to streaming services and monthly product boxes — they’re becoming a dominant force across a variety of industries, transforming the way businesses engage with their customers. 

This evolution was the focus of Recurly’s in-person event in Amsterdam, The Future of Subscriptions with citizenM, hosted in partnership with Adyen. During the event, Joe Rohrlich, CEO of Recurly, Joost van Bommel, Head of Membership Products at citizenM, and Amber Bienfait, Commercial Strategy Lead, Digital, at Adyen explored the trends, challenges, and opportunities shaping the future of subscriptions.

Watch it on-demand or continue reading to get the highlights of the event.

The growth of subscriptions and what’s driving them

Yeah. I mean, we just did a study on what's going on. What's the size of the subscription market around the world? How is it growing? Where is it growing? This is important to us, of course. And the sort of big story is it's a very large market today.

It's projected to grow faster than the rest of the economy over the next ten years, and there's really, like, two things that are driving it. The first is what we just talked about, which is that there are new industries that are moving into subscriptions. So retail is a big one, travel and hospitality, health care is a big one. So, and I think we probably all see this, like, more things in our if you if you look at where your money goes every month, more of it is going into, you know, into subscriptions.

The other one is global change. So, today Europe and the US represent the largest or largest markets when it comes to subscription. But we see very fast growth coming in Asia Pacific right now as kind of consumer trends are starting to change towards this. And so that will also drive a lot of growth moving forward.

According to Forbes, the global subscription economy market size is projected to reach $1.5 trillion by 2025 — a massive jump from $650 billion in 2020. No doubt, this rapid growth highlights the strategic importance of subscription business models in driving revenue growth and fostering long-term customer loyalty. 

So what’s fueling the subscription economy’s explosive growth? According to Rohrlich, there are two main drivers. First, the subscription model is being adopted by a range of new industries beyond traditional sectors like streaming media and software. Retail, travel and hospitality, and even healthcare are embracing subscriptions as a way to create recurring revenue and deepen customer relationships (more on this in the next section). 

The second driver of subscription growth is global change. Rohrlich points out that while the U.S. and Europe currently represent the largest subscription markets, the industry is also seeing particularly fast growth in the Asia-Pacific region, largely driven by shifting consumer preferences and increasing demand for subscription-based services. As these trends unfold, businesses around the world will need to adapt to meet this growing demand.

How the subscription model is breaking into new industries

I think it's really interesting to see across our customer portfolio that, where historically really was subscription businesses and non subscription businesses. You've seen those boundaries disappear, and more and more, type of businesses moving into subscriptions for the reasons that Joost is mentioning.

To create more engagement, increase the loyalty.

Because I think, yeah, we also as consumers, you're more likely to go back to a brand where you have a subscription. Myself, I have a subscription on salon mail, shipping for instance. And I do find myself going back to that app.

But I think, yeah, we see it across more industries, even with air that's moving into, all you can fly subscriptions, Nespresso, online retail.

Yeah. So that's really, increasing. So it's a global market, and that's interesting to see.

Early in the discussion, Bienfait highlighted a significant trend: the boundaries between subscription and non-subscription businesses are rapidly disappearing. As a global fintech platform, Adyen has seen firsthand how businesses across all industries are adopting subscription models to drive engagement and enhance customer loyalty.

"We, as consumers, are more likely to go back to a brand where you have a subscription," Bienfait noted, underscoring how subscriptions can foster long-term relationships.

Indeed, many sectors that traditionally wouldn’t have been associated with subscriptions are now embracing this model. Airlines, for example, are introducing “All You Can Fly” passes, giving customers access to unlimited flights and exclusive offers. Similarly, Nespresso has ventured into subscriptions, offering customers a monthly supply of their favorite coffee products. Even hotels like citizenM are getting in on the action, adapting their business models to offer more than just overnight stays, but a broader range of lifestyle benefits including co-working spaces, early access to sales, and food and beverage offerings.

No doubt, this shift reveals a broader trend across the market: consumers increasingly prefer the convenience, personalization, and predictability that subscriptions offer. And as more industries adopt this model, businesses have a clear opportunity to create stronger, more lasting connections with their customers.

Challenges to consider when expanding subscriptions globally 

Think like on a global expansion, I think from a payment perspective, it might also seem very easy to expand. Like there are global payment methods like credit cards, wallets, Apple Pay, Google Pay that are global. I think once customers and Josef mentioning it, are moving into specific countries and then are trying to optimize for revenue and cost, you could quickly see that it's also not a one size fits all approach.

I think both on market dynamics simply also when people get paid, here in the Netherlands we get paid on the twenty fourth, in the US it's twice a week.

I wish it was twice a week.

Twice a week.

Twice a month. Sorry.

But I don't know. That would be great.

Yeah. As well. Thanks for that correction.

But, yeah, that all shows that also like, yeah, there is, also local nuances on when to try attempt the payment, also sometimes differs also for time of the day even.

And, yeah, like, we have machine learning models that help our customers optimize for that. I think also just for payment preferences, just like cultural preferences are also very different across countries. Here in the Netherlands, we like to pay with ideal.

So yeah, as soon as customers, expand globally and really are going global, they can also think about adding new payment methods.

Yeah, those are all, challenges to overcome when, expanding globally.

When going global with a subscription business, there’s almost never a one-size-fits-all approach. On the contrary, as Bienfait explained, every region has its own unique market dynamics, payment preferences, and consumer behaviors. 

For instance, in the Netherlands, employees typically get paid on the 24th of each month, while in the U.S., it's common to receive paychecks twice a month. These nuances influence when customers prefer to make payments, even down to the time of day. Preferred payment methods also vary significantly across countries — for example, iDEAL is the favored method in the Netherlands, while in the U.S., many consumers prefer to pay with credit cards or digital wallets. 

According to our research, 61% of consumers are more likely to subscribe if they can choose their payment date, and 18% feel more valued as a subscriber when offered the ability to personalize their subscription, including payment type. As such, businesses going global must first consider adding localized payment methods and adjusting their strategies to accommodate cultural differences and consumer habits in each market.

Strategies to push customer retention

What we're currently doing already more to retention because we've and what works for us is being more transparent about the value that our product gives, so to give a practical example when you're booking a room as a MyCitizen plus member we show you the actual discount not in percentage, but in currency in euros or in dollars, we show you on your dashboard page what your lifetime savings are, so how much euro or dollar you have saved while being a member, how much bookings you made, and what we try to do there is that we really make it explicit the actual benefits that the member gets from us and we see that working, we see that positively impacts the renewal basically that they that people want to stay longer because they think oh actually it I'm actually saving a lot of money with this, so we haven't found a sweet spot there.

It's still challenging, we're trial and error and I think the last thing, we focused a lot on, in the beginning of on the sleep side, so really on the stay, on discount on your room nights, discount on your food and beverage, discount on and getting a late checkout included in your room, those kind of things, and we're slowly turning the product into work and play as well. So it was only sleep and now it is getting more sleep, work, and play, so we're adding free co working, so as a memory you can co work for free. Also, to really have people value the product as a compelling deal and have it more interact with us, yeah, to keep them in to have them renew etc.

Depending on what industry you’re in, acquiring a new customer can be anywhere from 5 to 25 times more expensive than retaining an existing one — which is why many of today’s businesses are putting a larger focus on keeping their existing customers happy.

For citizenM, boosting customer retention has hinged on being transparent about the tangible value its products and services provide. For example, when booking a hotel room, mycitizenM+ members see their actual discount displayed in their local currency, and on their dashboard, they can track their lifetime savings based on how long they've been a member and how many bookings they’ve made. According to van Bommel, this approach has had a positive impact on renewals, as customers are more likely to stay subscribed when they see how much money they’re saving.

In addition, citizenM has gradually expanded its “sleep” product offering (i.e. hotel stays, room amenities, food and beverage services, and late checkouts) to include "work and play,” adding perks like free co-working spaces for members. According to van Bommel, these enhancements have made the membership an even more compelling deal, allowing for deeper customer engagement and increased renewals.

Fostering loyalty through rewards and exclusivity

Was just gonna add, like, two other examples that we're seeing outside of hotels is basically it's this idea of, your best consumers may pay for exclusivity and access versus rewards back. So two examples like we've seen, we're seeing a lot of professional sports teams like football clubs offering paid, you know, paid subscriptions, paid membership, which give you access to, you know, unique content with their players, unique experiences at their stadium.

We're seeing airlines starting to there's the there's the example we saw recently of the, travel all you want, but we're seeing more like citizen now.

Small, very small fee, you know, five euros a month, ten euros a month, but getting first access to special fares, to special seats on the plane. And so I think this is where we see a lot of brands experimenting more on the sort of exclusive access side.

According to recent Recurly data, 82% of consumers would stay subscribed if they were given loyalty incentives. Typically, these incentives come in the form of lower costs, discounts and promotions, and the like. 

However, Rohrlich pointed out that beyond traditional rewards programs, many businesses are now fostering loyalty through exclusivity and early-access offers. Rather than receiving standard rewards, today’s consumers are often more willing to pay for privileged access. 

For example, Rohrlich highlighted that some professional sports teams are offering paid memberships, which provide access to exclusive player content and unique in-stadium experiences. Additionally, Rohrlich echoed Bienfait's earlier mention of airlines offering “All You Can Fly” passes, but added that some airlines are experimenting further with exclusive access to special fares or preferred seating for a small monthly fee.

This shift toward exclusivity and early-access perks is becoming a popular way for brands to experiment with loyalty strategies, delivering a sense of VIP treatment that strengthens customer engagement.

Predictions for the future of subscriptions

On the frictionless, topic, I think what we've been seeing is also that online customers were already hyper focused on making online checkout as frictionless as possible also for subscription.

What we've been seeing recently is that, customers that and have online presence but also in store or in a hotel that they, move the sign up process also to the store. So, Nespresso is a good example when some people like their to buy their machine online and subscribe there, but some people like to go to the store, taste the coffee, buy the machine, and, we see them facilitating a very frictionless sign up process there with, our terminals.

So I see that frictionless sign up process going to other channels as well. As well as, of course, looking at retention, you were already, saying AI and ML, and of course it's a buzzword, but, like, how can you practically apply it?

We were, already talking about it. It's, we're it's an avenue that, we're exploring. How can you, present the payment methods that will give you the longest customer lifetime value at the beginning of the stage.

Bank accounts have a longer lifetime than cards typically.

So those are all areas to explore to really, yeah, improve the the customer lifetime value.

Yeah, and I because you you triggered me as well with, having the sort of the in store purchase, I think that was also is for a super, important and also a territory that we we haven't explored yet, and I mentioned earlier that we are now also having made co working part of our product, and I think those are people entering our hotel who not necessarily made a booking online, so not necessarily also purchased the membership online, but then having like a point of sale touch point that will be super nice for us as well.

The discussion wrapped with the panel giving their predictions for the future of subscriptions — where is the industry headed? And how can merchants be prepared? 

For Bienfait, it’s all about the growing demand for frictionless subscriber experiences, particularly in online checkouts. Today, customers are hyper-focused on seamless, effortless payment processes, and merchants will increasingly integrate subscription signups into their brick-and-mortar stores to meet this demand. 

Take Nespresso for example: While some customers prefer buying a machine and subscribing online, others prefer to visit in-person to taste the coffee and complete their subscription signup via in-store payment terminals. By bridging the gap between online and in-store experiences, this approach allows merchants to offer a frictionless experience across various channels.

In terms of retention, Bienfait touched on the growing role of AI and machine learning. While these technologies are often seen as buzzwords, Adyen is actively exploring how they can be applied practically to boost customer retention, such as identifying which payment methods lead to the highest customer lifetime value. For example, bank accounts tend to have a longer lifetime value than credit cards, so presenting the right payment options early in the customer journey is a potential strategy for extending retention.  

Wrap up

For companies looking to stay ahead of what’s next, the key takeaway is clear: the future of subscriptions isn’t just about recurring payments — it’s about building long-term relationships with customers and delivering ongoing value.

With consumer demand for personalization, flexibility, and convenience at an all-time high, subscription models are proving to be a powerful tool for growth. As highlighted by Recurly, citizenM, and Adyen, success in this space will require businesses to continually adapt, using data-driven strategies to retain customers, expanding thoughtfully into global markets, and leveraging technology to deliver exceptional subscriber experiences.