A new study released by AppDirect, the leading subscription commerce platform company, details the pace and pressures of digital transformation in the COVID-19 era. As the global pandemic speeds an enterprise-wide shift to digital commerce, more than two-thirds of companies (69%) report that they have accelerated digital plans or launched new projects, according to the AppDirect study “The State of B2B Subscription Commerce in the New Normal.”
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Adapting to the New Normal
The report reveals that companies are stepping up to meet the skyrocketing demand for subscription products. The survey found that 95% of companies offer at least one subscription-based product and the majority of those who don’t are considering it. Additionally, 67% of senior executives said most of their products are subscription-based, demonstrating the role recurring revenue streams already play in the digital economy. However, while the majority of companies have subscription products, only about a third feel completely prepared to launch new digital offerings, a fact that underscores the complexity of scaling a recurring revenue model.
“It’s clear that companies today face unprecedented challenges, and embracing a recurring revenue model is key to driving resilience in uncertain times,” said AppDirect CEO Daniel Saks. “This report shows that many organizations recognize just how critical subscriptions are, but significant challenges to implementing and scaling a digital subscription business remain. We hope this data will help business leaders understand how to move forward and succeed in the ‘new normal’ that we are facing.”
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The Impact of the Pandemic
“The State of B2B Subscription Commerce in the New Normal” report surveyed senior executives to uncover the trends organizations are seeing as they launch new projects to enable digital business and what concerns remain for launching, scaling, and sustaining such initiatives. While the full effect of COVID-19 has yet to be truly understood, the report shows that its impact on business has been swift and extensive.
Additional key findings include:
- Anxiety about keeping up with pace of change. Nearly all (97%) of those surveyed said that the pandemic affected their digital commerce initiatives and 83% are concerned about sustaining their rate of digital transformation.
- Subscriptions increase concerns about digital transformation. Whether or not a company has subscription products plays a deciding role in how concerned organizations are about various issues, particularly legacy technology and making the right investments to drive digital transformation. In fact, of companies that worry that their digital transformation efforts don’t go far enough, 32% have all or mostly subscription products while 4% have no subscription products.
- Investing for the long haul, and the new normal. 77% of business leaders are focusing their digital strategies on long-term responses to current challenges and preparation for future business needs rather than reacting short-term to weather economic uncertainty.
- Software ecosystem partners are key. Despite uncertainties, there is clarity around the tools and technologies organizations are utilizing in digital transformation initiatives and the launch of digital products. Nearly all (97%) noted that they rely on ecosystems to bring digital products to market and to do so faster than they could accomplish on their own. Over two-thirds said they would use a third party to scale or create a new digital channel or launch third party products through an existing digital channel.
- Fortune favors the prepared. Just 37% of organizations said they were completely prepared to launch a new digital offering, but those that were ready had a clear headstart on competitors who were unprepared. Among “completely prepared” companies, 64% launched a new initiative in response to COVID-19, while only 25% were forced to delay.
“The State of B2B Subscription Commerce in the New Normal” report can help enable enterprises in any industry to chart a path to tackling challenges in order to plan, launch, and scale a successful digital transformation strategy in the era of subscription commerce.
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