Consumers continue to vote for the subscription payment model with their wallets. A new report estimates sales of products and services using recurring payments will rise nearly 23 percent in 2022 to $275 billion compared to $224 billion in 2021.
Physical goods will top the list of products that generate the most revenue, according to U.K.-based market research firm Juniper Research. The report identified digital video and digital music as the next two biggest subscription revenue drivers.
While most consumers think of digital video and music when they think of subscriptions, physical goods actually dominate the market. Juniper expects physical goods to account for 45 percent of all recurring revenue by the end of this year. Supply chain disruptions that have caused more delays in online orders are one reason as users look to secure reliable deliveries of important goods, including medicine.
According to Juniper Research, support for alternative payment methods is key to growing future subscription-based services. The firm recommends that sellers who use subscription models consider multiple payment methods, including Open Banking and digital wallets, focusing on the most popular alternative payment methods in their target countries.