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AShot toSubscription Commerce By Martin Vilaboy C halk it up to yet another way the odd realities of 2020 have boosted digital transformation agendas. After years of wrestling with ways to exploit the predictable revenues and higher valuations of subscrip- tion commerce models, a pandemic hit and made the demand for them mainstream. Confined to our homes, we turned to subscriptions for entertainment, meal delivery, razors, clothing and even toilet paper. At work, software as a service products became more important than ever to access, produc- tivity, security and even day-to-day operations. Of course, IT plans took a hit across the board, but for 69 percent of companies, digital commerce initia- tives were accelerated or projects were launched after the COVID-19 pandemic struck, according to a survey of senior executives for AppDirect. The 29 percent of firms that delayed or canceled subscription commerce initiatives was equal to the number that were spurred to launch an entirely new effort. Among the companies that believed they were “completely prepared” to go to market with a new offer when life as we knew it locked down, 64 percent launched a new initiative in response. AppDirect’s survey also found that 95 percent of companies offer at least one subscription-based product, and the majority of those who do not are considering it. And respondents certain- ly do not appear to see their responses as extraordinary or short-term. More than three-fourths of business leaders are focusing their digital strategies on long-term responses to current challenges and as preparation for future business needs rather than reacting short-term to weather economic uncer- tainty, said the survey report. Not that the rush to fill an overwhelm - ing demand for subscription services is an expression of confidence. “This report shows that many organizations recognize just how criti- cal subscriptions are, but significant challenges to implementing and scaling a digital subscription business remain,” said AppDirect CEO Daniel Saks. More than nine in 10 respondents, for instance, said their companies are very or somewhat concerned about launching new digital products, while more than eight out of 10 are concerned about their ability to sustain their rate of digital transfor- mation. Companies more reliant on digital subscription models expressed higher than average levels of concern. Topping a rather long list of tightly grouped issues and challenges was “legacy technology holding our compa- ny back,” followed by difficulty calcu - lated ROI and project complexity. So, it’s no surprise that the vast majority of respondents rely on ecosys- tem partners to streamline the process of bringing digital products to market, while more than two-thirds said they would use a third-party provider to scale or create a new digital channel. About the same percentage uses a third- party provider to launch new products through an existing digital channel. And once again, we see the need for speed coming into play. When asked to consider their top challeng- es in terms of their digital strate- gies and where their company was placing emphasis, “speed to market,” cited by about half of respondents, was top of the list. o BUYERS SIDE Source: CompTIA Pandemic’s Impact on UCaaS Interest Source: Avant Research & A alytics Thinking about your digital strategy, would you say your company is focused more on: Source: AppDirect 249% 212% 174% 163% 131% 197% 163% 156% 140% 114% 148% 129% 159% 107% 122% 103% 100% Speed to market Automating sales and delivery processes Working with external partners Company culture Scaling the product Automating sales and delivery processes Launching a new channel Selling through existing channels Buy it from company leaders None of these 250% 200% 150% 100% NOV 2018 2018 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR 86 Surge in customer interest at start of COVID 47% 46% 43% 38% 35% 35% 34% 34% 27% 2% 12 CHANNEL VISION | September - October, 2020