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2Checkout Releases 2019 Global Digital Commerce Benchmark Study; Highlights Continued Global Adoption of Subscription-Based Revenue Model
• Subscription-based products and services continue to rise to 77% of total sales volumes
• Top 10 countries account for 78% of overall sales
• Average Order Value grows from $50 to $56
• Visa/MasterCard preferred payment method at 70% while local payment options remain a strong preference in countries such as China, Brazil and the Netherlands
ATLANTA, GA - April 09, 2019: 2Checkout, the leading all-in-one monetization platform for global businesses, today released its Q1 2019 Benchmark Report on Digital Commerce Trends in Software and Online Service Sales. The Digital Commerce Benchmark is based on millions of worldwide transactions moving through 2Checkout's platform between March 2018 and February 2019. 2Checkout continuously tracks trends and statistics, empowering digital commerce merchants to make better business decisions.
Key trends from the report include:
- Subscription Services on the Rise - The growth in subscriptions continues steadily, with 77 percent of total online sales in the last 12 months coming for subscription-based products and services, compared to 76 percent in 2018 and 75 percent in the previous year. Within the 2Checkout merchant base, 81 percent of companies sell at least one product with a subscription attached to it, a level very much in line with Gartner's prediction that by 2020, more than 80 percent of software vendors will offer subscription-based business models.
- Average Order Value Grows - The average amount customers spent within the last 12 months for software, SaaS and online services increased by $6 to $56 from the previous year, which had the Average Order Value (AOV) of $50. This is even more meaningful in comparison to data from two years ago where the AOV was $48. A widespread usage of commerce tools such as cross-selling in cart and on the Thank You page, up-selling, cart abandonment prevention, in-app tools and so on are contributing to the increase in AOV.
- Variations in Payment Methods - Credit cards such as Visa and MasterCard continue to be the most popular payment methods globally, with a slight gain from last year, now accounting for 70 percent of global online sales (compared to 68 percent in 2018), followed by PayPal at 20 percent (up one percentage point) and American Express with a slight decrease from last year's 7 to 6 percent. Local and regional payment methods are not to be ignored and continue to hold a solid percentage of sales in several countries such as iDEAL in the Netherlands (44% percent), Alipay in China (43% percent), Boleto in Brazil (14% percent).
- Movements Amongst the Top 10 Countries - The United States continues to lead in global sales of software, SaaS and online services, accounting for 49 percent of sales worldwide, followed distantly by the UK holding 6 percent and France holding 5 percent. Germany and Canada share the fourth spot this year after Canada's sales increased slightly over last year. The top non-English-speaking countries account for 20 percent of global software sales, a slight decrease from 22 percent last year.
- Additional Revenue Sources - There are several additional revenue sources that have proven consistent value. Affiliate-generated sales continue to show strength as an additional marketing channel for the software industry. Returns increased slightly this year to 24 percent for companies connected to 2Checkout's award-winning Avangate Affiliate Network. Additional revenue was generated from promotions influencing 33 percent of revenues and cross-selling and upselling accounting for 15 percent of all sales, on average.
According to Erich Litch, President and Chief Operating Officer at 2Checkout, "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."
For more insight into 2Checkout's Benchmark, please view the Q1 2019 Digital Commerce Benchmark infographic.