2Checkout Report Shows Subscriptions Grow to 77 Percent of Total Sales
Eighty-one percent of all 2Checkout merchants have at least one subscription-based product or service.
Earlier this week, monetization platform 2Checkout released its Q1 Benchmark Report on Digital Commerce Trends in Software and Online Service Sales. The information in the report comes from millions of global transactions using the 2Checkout platform between March 2018 and February 2019. According to the report, subscription-based products and services now represent 77 percent of total sales volume, compared to 76 percent in 2018 and 75 percent in 2017.
For the top 10 countries (U.S., U.K., France, Canada, Germany, Australia, Italy, Japan, Netherlands, Spain), subscription-based products and services represented 78 percent of all ecommerce sales.
“We continue to see the subscription-based revenue model gain steam within the software industry as companies shift from one-time purchases to a recurring approach, reflected in the findings of this year’s benchmark report. This trend is coupled with the diversity of local markets and buyer preferences; therefore, we will maintain our focus on delivering a monetization platform capable of supporting global commerce with a local approach as well as a variety of business, payments and subscription models,’ said Erich Litch, president and chief operating officer at 2Checkout in an April 9 news release.
- Of 2Checkout merchants, 81 percent sell at least one product that has a subscription
- The average spend per customer for software, SaaS and other online services grew from $48 to $56, or average order value (AOV) of $50. Two years ago, the AOV was $8.
- Cross-selling in cart, thank you pages, upselling, cart abandonment prevention and in-app tools helped to increase AOV.
- Up-sells and cross-sells combined made up about 15 percent of sales, on average.
- Visa and Mastercard account for 70 percent of global online sales, followed by PayPal at 20 percent, American Express at 6 percent, Discover at 1 percent, and all others – including local and regional payment times making up the remaining 3 percent.
- The U.S. leads in global sales of software, SaaS and other online services, followed by the UK at 6 percent and France at 5 percent.
- The top 10 non-English speaking countries generated 20 percent of digital sales worldwide, down from 22 percent last year.
- Affiliate sales generated 23 percent of revenue for merchants connected to the Avangate Affiliate Network.
- Sales through partners or resellers represented 25 percent of revenue for merchants using Channel Manager.
- Promotional sales made up an average of 33 percent of merchants’ revenue, for those who use promotions as a sales and marketing tool.
It is always interesting to see real data supporting the economictrends that we hear about in the news every day – subscription sales are growing; software, SaaS and online services are utilizing the subscription model more and more; and sales come from a variety of techniques and sources – up-selling, cross-selling, promotions, affiliate revenue and partnerships.