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Plateaued sales can feel like being a ship stuck at sea without any wind to sail. You have everything you need for success, but you're missing that extra push to get things moving again. That's where recurring commerce comes in, offering you a chance to set your sights on new horizons.
Remember the explosive growth we saw in SaaS (Software-as-a-Service)? Well, that wave has crashed into e-commerce. By 2026, the global e-commerce subscription market is expected to reach a staggering $904.28 billion USD.
This significant uptick isn't just a trend—it's a reflection of changing consumer preferences. People are increasingly favoring online shopping over in-store experiences, especially when it comes to subscriptions that offer additional benefits and greater convenience.
Think about it: avoiding crowds, easily comparing prices between competitors, lower travel costs, and instant access to customer testimonials and reviews. For many, the e-commerce subscription market is nothing short of shopping nirvana.
For merchants facing plateaued sales, recurring commerce presents a significant opportunity. This business model could be just the gust of wind you need to lift your ship out of stagnant waters and into smoother, more profitable seas.
Say you’re a runner training rigorously for an upcoming competition. While you’ve woken up early every morning to hit the track, you can’t seem to beat your record.
It’s frustrating because, while you’re consistently fast, you can’t outperform your best time. And if you don’t make it to the next level, it won’t be enough to qualify for the race.
The same scenario can play out for merchants that are working hard to grow. Not everything in the world of e-commerce is a straight-up boom or bust. There’s a middle ground: plateaued sales.
Merchants can reach a point where sales performance remains stagnant or shows minimal growth, even if baseline sales targets and revenue goals are being met.
Whenever this happens, it’s often time for you to reevaluate your strategy and explore new approaches to stimulate growth. Before you take the first step, you need to know the signs and symptoms of plateaued sales.
You might not always immediately recognize the signs and symptoms of plateaued sales. They can creep up on you if you aren’t sure what to look out for.
By keeping an eye on these indicators, you can address any issues as they arise and make adjustments to keep your sales on the right track:
If you’ve come across any of these signs and symptoms, it might be time to switch things up and try something new. And that’s where recurring commerce enters the scene.
Recurring commerce takes place when people sign up to regularly receive a product, service, or both. Rather than one-time purchases, customers make ongoing, repeat purchases, which often happen on a subscription or membership basis. For merchants, this ensures a steady, predictable stream of income.
Right now, 70% of merchants believe that recurring commerce models are the future of business. Simply put, this isn’t a passing trend but a fundamental shift in how e-commerce businesses operate.
While this is the case, just 10% of merchants have already implemented recurring commerce models. For merchants worldwide, there is enormous growth potential waiting to be unlocked. With this in mind, let’s explore some examples of recurring commerce.
Consumables are products with a shorter lifespan that are quickly used up and need to be replaced. These can include personal hygiene products, office and household supplies, and groceries.
So, think of everything from flowers and coffee to ink cartridges and baby diapers. All of these consumable products must be regularly replenished.
For merchants offering consumables, the key is to make your products and services so convenient and personalized that customers wouldn't dream of buying these items anywhere else.
This could mean offering a coffee subscription with ethically sourced beans from across the globe or a tailored skincare kit that changes based on the season. Either way, you personalize the entire experience to fit the individual preferences of subscribers.
Durables are products with longer lifespans that can be used over an extended period. These can include home appliances, furniture, electronics, vehicles, and tools and equipment,
So, think of everything from power drills and microwaves to boats and gaming consoles. As these products are often owned by merchants and rented out, there’s an economic incentive to ensure they are high quality, don’t break, and can be easily repaired.
By moving to a recurring commerce model, you can invest more in making better products. This is possible because you'll earn more from each item over time, rather than just making a one-time sale.
So, your customers get access to top-notch products without the huge upfront cost. Simultaneously, you get to build longer-lasting relationships with your customers.
In a perfect world, instead of chasing new sales every month, merchants would welcome steady income. And this doesn’t have to be a far-flung dream. The best part about recurring commerce is that it sets you up for long-term success.
You don’t have to board the feast-or-famine rollercoaster. Instead, you can sit back and enjoy sustainable growth. So, if you’re feeling stagnant, it might be time to give recurring commerce a shot.
Recurring commerce isn’t only about your bottom line. It’s also about building stronger, more meaningful relationships with your customers. Through regular interactions, merchants get to be an ongoing part of people’s lives.
So, you have more chances to impress your customers with personalized experiences and introduce them to products that they’ll love and adore you for.
As your e-commerce business grows, so does your ability to plan for the future. In turn, you can invest in new ideas, expand your offerings, and dream bigger than ever before. It's a win-win for everyone.
Imagine running your e-commerce business with the financial stability of a steady paycheck. That's the power of recurring commerce.
Just as a 9-to-5 job allows you to plan your personal finances, recurring payments provide your business with a reliable financial foundation.
With predictable revenue, you can:
The impact is significant. According to a Zuora report, recurring commerce models have outpaced the S&P 500 in revenue growth by five times over the past decade.
Recurring commerce reduces the uncertainty inherent in fluctuating income streams. It empowers you to make informed decisions about your e-commerce business's future, fostering sustainable growth and long-term success.
Did you know that 80% of growth for successful merchants comes from generating new revenue from existing clients? That's what McKinsey found, underscoring why it's crucial to create a harmonized, seamless customer journey.
Here's why focusing on retention is smart business:
The impact on your bottom line can be significant. Bain & Company discovered that a mere 5% increase in customer retention rates can boost profits by 25% to 95%.
This statistic illustrates well how predictable revenue streams from recurring commerce can bolster customer loyalty and drive long-term profitability.
With a steady stream of predictable revenue, you can focus on enhancing the customer experience for new and existing customers.
Recurring commerce provides you with the stability to consistently invest in improvements. This creates a virtuous cycle of customer retention, increased lifetime value, and sustainable growth.
Without a substantial investment in the customer experience, merchants will turn people off. That’s why:
On the flip side, positive experiences lead to impressive results:
You’re not just making one-time sales with recurring commerce. Instead, you're building ongoing relationships that provide multiple touchpoints for strategic upselling and cross-selling.
And the proof is in the pudding. Take these statistics for instance:
There’s no doubt about it: recurring commerce creates endless opportunities for upselling and cross-selling.
When customers are interested in a product or service, an upsell presents them with a more expensive and higher-value option.
Let’s say a customer has added a winter jacket to their cart. An upsell would offer up an enhanced version of the original, perhaps one that is waterproof or insulated, at a higher price.
And when you offer options like these to customers, the results are significant:
While upselling presents customers with an upgraded or premium choice, cross-selling suggests related or complementary products.
So, if an upsell is a better winter jacket, a cross-sell would ask the customer if they would like an entire outfit. Maybe that’s simply a pair of matching pants or even a hat, gloves, and a scarf.
Giving people the chance to add products to their order can have impressive outcomes:
If you believe you are experiencing plateaued sales, it might be time to consider recurring commerce.
With this model, your e-commerce business can enjoy:
• A steady stream of income (no more nail-biting over next month's numbers).
• Customers that stick around longer (because you're making their lives easier).
• More chances to impress customers with great experiences and cool new products.
Keep in mind, e-commerce isn't just about selling products anymore. Instead, it's about building relationships, making life easier and more convenient for your customers, and growing your business in a way that feels less like a roller coaster and more like a smooth escalator upwards.
So, ready to give recurring commerce a shot? Move past the stagnancy of plateaued sales and sail towards new horizons with Firmhouse. Book a demo with us today.
