Survey of Retailers Reveals Mainstream Adoption of Recurring Revenue Programs in 2019

Eighty-Three Percent of Retailers Surveyed View Converting One-Time Buyers into Recurring Customer Relationships as Very Important for Their Overall Retail Strategy in 2019

According to a new study commissioned by Ordergroove, the leader in Relationship Commerce, retailers view converting one-and-done shoppers into recurring customers as very important for their business and expect that recurring revenue programs will be a significant driver of revenue for their organizations in 2019. Findings from the study, “Retail 2019: The Year of the Recurring Revenue Model” will be presented at National Retail Federation (NRF) 2019: Retail’s Big Show, to be held in New York City on January 13-15, 2019.

83% of retailers surveyed agree that converting one-and-done buyers into recurring customers is very important for their overall retail strategy. Get the full results of Ordergroove’s survey: #relationshipcommerce #NRF2019

Recurring revenue programs – such as subscriptions, reordering, and membership programs – enable brands to transform shopping experiences from one-time consumer transactions to frictionless, recurring relationships that drive predictable, profitable revenue streams.

Retail 2019: The Year of the Recurring Revenue Mode
Retail 2019: The Year of the Recurring Revenue Mode

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Key findings from the study, which surveyed retail leaders representing companies with an annual revenue exceeding $100 million, include:

  • 83 percent of retail leaders surveyed agree that converting one-and-done buyers into recurring customers is very important for their overall retail strategy.
  • 54 percent expect significant growth in revenue in 2019 and beyond from recurring customer purchases.
  • Today, 65 percent of respondents offer subscription programs; additional 22 percent are thinking of adding them in 2019.

Relationship Commerce Also Equates to Value for Consumers

Retailers are experiencing a clear correlation between recurring customer purchases and customer satisfaction, with 86 percent of respondents indicating that their subscription customers are more satisfied than their non-subscription customers. Additionally, more than half state their overall Net Promoter Score (NPS) has increased since launching subscription offerings.

“In today’s on-demand world, consumers have more choices than ever and are choosing those retailers and brands who make their lives’ easier,” said Greg Alvo, CEO, Ordergroove. “Retailers who are not investing in frictionless relationship commerce programs are merely acquiring customers and absorbing the Cost of Customer Acquisition (CAC), only to lose profitability and Lifetime Value (LTV) to Amazon. Amazon’s investments in programs like Prime for memberships, Subscribe & Save for subscriptions, Dash for IoT reordering and Alexa for voice reordering are all part of a master plan to build a recurring revenue business centered around the highest level of consumer convenience.”

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Alvo continued, “It’s clear from this study that retailers are responding with their own recurring revenue programs and are putting a relationship commerce strategy in place, elevating recurring revenue programs from a sideline to a business imperative.”

Results of the study will be highlighted at the National Retail Federation (NRF) 2019: Retail’s Big Show during the Big Ideas session: “The Big Shift – Moving from transactional to relationship-driven commerce,” on Tuesday, January 15, 2019 at 2:45 p.m. on Stage 6, EXPO Hall, Level 3. The session will feature Ordergroove CEO Greg Alvo and Colin Watts, Consultant and former CEO of The Vitamin Shoppe. Ordergroove will be at Booth 4364 during NRF.

The survey was conducted by NAPCO Research in November 2018 among close to 300 retailers. Results of any sample are subject to sampling variation.

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