aserviceofRetail2019:TheYearoftheRecurringRevenueModelBRANDADOPTIONOFRELATIONSHIPCOMMERCEISTHENEWNORMAL2EXECUTIVESUMMARYWhileeveryretailbusinessisunique,theyallshareonecommontrait:adesiretogrowreve-nueandprofits.Thechallengetodayisthatthetraditionalmodelforacquiringandretainingcustomersisnolongerenoughtokeepyourbusinessgrowing.Consumershavemorechoicesthaneverbeforethankstotechnology.Accordingly,theirex-pectationshavechanged.Theirbuyingdecisionsarenowdrivenbybrand,notjustprice,aswellasadesireforafrictionlessandconvenientshoppingexperience.Wheneverandwher-evertheybuy,theirpurchasesshouldbepartofanongoingrelationshipwiththeretailer.Tostrengthenthoserelationships,alwayskeepingcustomersatthecenter,manycompanieshavedevelopedastrategyandspecificprogramstoencouragerepeatpurchasebehavior.Theresultisabusinessmodelthatcreatesarecurringrevenuestream,whilereducingcustomeracquisitioncost(CAC)andboostingcustomerlifetimevalue(LTV).Toprovideinsightintohowretailersarefosteringlong-termrelationshipswiththeircustom-ers,relationshipcommercecompanyOrdergroovecommissionedNAPCOResearchtosurveyretailersaboutthesignificanceofrecurringrevenuetotheirbusinessstrategy,aswellastheircompany’suseofprogramstodriveongoingcustomerrelationships.Thesurveyresultsshedlightonthestateofrecurringrevenueprogramsinretailtoday,aswellasidentifyareasofopportunityforfurthergrowth.3Anoverwhelming83percentoftheretailerssurveyedagreedthatconvertingone-and-donebuyersintorecurringcustomersis“veryimportant.”Sixty-fivepercentsaidtheyalreadyoffersubscriptionprograms,andanother22percentareconsideringaddingthemin2019.Fifty-fourpercentsaidtheyexpect“significantgrowth”inrevenuein2019andbeyondfromrecurringcustomerpurchases.Amajorityofrespondentscitedbenefitsfromrecurringrevenueprogramssuchas“greaterrevenue”(67percent),“greaterprofitability”(61percent)and“greaterrevenuepredictability”(50percent).Surveyrespondentsareleadersintheirmarket-places,representingcompanieswithannualreve-nuesexceeding$100million.Theiranswer...
