The subscription e-commerce market has continued to grow exponentially year after year. To take advantage of the many benefits the subscription model offers, it’s important to understand current trends in terms of product offerings, growth beyond recurring revenue, and plan structures.
The Recurly Research team set out to analyze these variables within the e-commerce industry. Our analysis included data from over 900 sites over a 24-month period, segmented by industry, product offering, and plan type.
One interesting trend that emerged was the relationship between sites enabling one-time purchases and the amount of monthly TPV these purchases generated. For example, the Box of the Month industry had the second-highest number of merchants with one-time purchases enabled, at 40%, and generated the most TPV from these purchases, at 13.1%. This shows that offering separate items in addition to the traditional recurring box of goods can be a great way for businesses in this industry to generate substantial additional revenue.
However in the OTT industry, while 38% of streaming sites enabled one-time purchases, these purchases only generated 1.5% of TPV. The popularity of one-time/pay-per-view events likely drives their relatively large enablement rate. But, because these types of events are infrequent, they don’t generate substantial revenue and are thus more effective for subscriber acquisition than for significantly increasing TPV.
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The value of Recurly is that we no longer have to worry about the different aspects of subscription management. Instead, we can focus on things that are our core competency, like adding value to our service and expanding our offering. That’s been a huge win for us.