Have you made more online purchases recently than you did prior to the pandemic? For most of us, the answer is yes. COVID-19 has created a new normal for digital commerce, with consumers and businesses alike turning to their screens for a vast array of transactions they may have previously completed in person.

Not surprisingly, this shift has also affected most companies’ digital commerce plans. A recent survey from AppDirect found that 97 percent of companies’ digital commerce initiatives were impacted in some way. In fact, a majority—69 percent—reported the pandemic accelerated their existing plans or spurred them to launch new projects. As they’ve done so, it’s been with thoughts that the trends sparked by COVID-19 will continue once the pandemic subsides: A full 77 percent are making longer-term investments in their digital strategy to prepare for this new normal.

One such investment is in subscription commerce. The AppDirect survey found that 95 percent of companies now offer at least one subscription-based product or service.

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Subscription commerce: a very different kind of offering and value

Subscription commerce is a unique area of digital commerce with many advantages for providers, including predictable revenue streams, better customer retention, and higher valuations. But subscription commerce—at scale—also presents new levels of complexity beyond what many traditional eCommerce platforms can accommodate, particularly if the company is offering a combination of its own and third-party products. A previous post explored how complexity can be a hidden pitfall when companies adopt a subscription commerce strategy.

Take the banking sector, for example. As interest rates hit all-time lows, and the cost of maintaining physical branches remains high, banks are facing a trial by fire to implement new subscription models, manage the complexity that they can bring, and do it fast. As it turns out, banks aren't turning to single subscription solutions to solve these problems; they are creating software ecosystems to offer more value to customers, generate new revenue streams, and reduce churn.

In fact, nine out of 10 banks are strongly interested in creating customer-facing ecosystems to attract and retain customers. In order to succeed, however, banks need to implement the right business architecture, technology and services, while mastering the art of managing partner relationships. While the shift to this new operating model can be complicated, already there are companies that understand these challenges and are simplifying their processes.

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9 out of 10

The amount of banks interested in customer facing ecosystems that attract and retain customers.

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Case in point: Q2 Software

Q2 Software is a great example of a company that’s making the shift and evolving its offerings to respond to the increased demand for ecosystem-based subscriptions. With roots in digital banking, Q2 knew that its customer base of small, community-centered financial institutions were being outpaced in digital innovation by larger competitors, even before the pandemic hit. The company had a long-term vision of offering a platform that would enable its clients to integrate and sell third-party digital products and remain relevant in a digital era.

But while Q2 had a stream of potential ideas and partnerships that financial institutions could capitalize on, it lacked an optimal way to distribute digital solutions to its banking clients, as well as the banks’ customers and members. Could the company build the kind of platform that could meet its customers needs? It could, but it would take at least 18 to 24 months to get to market with baseline capabilities and would come with some financial risk. With a massive backlog of ideas and a market opportunity prime for disruption, Q2 realized it needed a better alternative that would enable the company to quickly scale an ecosystem and begin delivering value.

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Subscription commerce—at scale—presents new levels of complexity beyond what many traditional eCommerce platforms can accommodate, particularly if the company is offering a combination of its own and third-party products.

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The answer was to partner, which Q2 saw as a far better option than a multiyear investment to build its own platform or trying to cobble together the requisite capabilities through acquisitions. Q2 teamed with AppDirect to deploy a flexible platform through which Q2’s clients can deliver a world-class experience to their end customers with in-demand third-party applications across lending, collections, security, retail banking solutions, and more. By using AppDirect’s subscription commerce platform as the foundation, Q2 was able to launch applications in a fraction of the time it would have taken to build them from scratch, and at far less cost.

Today, Q2 is rolling out the next phase: offering marketplace-as-a-service that financial institutions can use to curate a selection of subscription banking products for their customers and, thus, enable them to drive greater digital engagement, generate non-interest income, and create “stickier” customer relationships. Looking forward, the company intends to steadily grow its catalog to serve all its customers' needs.

As the subscription economy continues to accelerate, we expect to see many more examples of business innovation along the lines of what Q2 is pursuing.

Disclaimer: This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks. This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

Kevin Dobbs

Managing Director – Accenture Consulting


Vikrant Viniak

Managing Director –​ Accenture Strategy

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