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New AppDirect Study: 69% of Companies Have Accelerated Digital Commerce Initiatives in Response to Pandemic-Era Challenges

Wednesday, October 14th, 2020

As demand skyrockets, the subscription era has arrived – report finds just 5% of companies say they lack a subscription offering.

San Francisco, Calif. – October 14, 2020 – A new study released today 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.”

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.”

“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 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. You can learn more and download the report here.

For ongoing information and best practices on driving transformational change within your organization, you can listen to Decoding Digital, a new podcast series hosted by AppDirect co-founder and co-CEO Dan Saks. The podcast features insights from a range of business leaders, including Eric Ries, author of “The Lean Startup,” and Michele Romanow, president and co-founder of Clearbanc.

Methodology

AppDirect commissioned Wakefield Research to conduct an online survey of 500 senior executives who have participated in the launch of a new digital product to enable digital business. The survey was conducted in June 2020.

About AppDirect

AppDirect offers a subscription commerce platform that removes the complexity of building a recurring business model. Sell any product, through any channel, on any device—as a service. Our platform opens up endless opportunities for commerce innovation, giving businesses the freedom to grow. We power millions of subscriptions worldwide for organizations like Jaguar Land Rover, Comcast, Sage, Keller Williams, ADP, and Deutsche Telekom.

©2020 AppDirect, Inc. AppDirect is a registered trademark of AppDirect, Inc. in the United States and other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s).

For Press inquiries, please contact marketing@appdirect.com.