Podcast March 17, 2021

What makes the digital supply chain different?

In retail, digital transformation is everywhere and obvious. You buy a product online, it gets delivered to your home. No more browsing aisles or waiting in checkout lines.

But B2B lags behind — especially when it comes to subscriptions. Why is that? 

Today’s guest, Daniel Saks, President & Co-CEO at AppDirect, says it’s all to do with the demands of the digital supply chain. 

And at AppDirect, he’s helping companies meet those demands. 

What we talked about:

  • AppDirect’s place in the digital supply chain
  • Why recurring digital goods are so different from one-time physical goods
  • Why embedded finance is the future

How AppDirect works

AppDirect is the leading subscription commerce platform for selling digital goods. 

It might be helpful to think of them as the Shopify of the B2B subscription good space, a retail commerce platform that helped transform retail to such a degree that, as of this year, the majority of retail shopping is done online.

AppDirect’s platform is similarly helping businesses in the B2B subscription world.

“AppDirect enables merchants or sellers of technology to have all the tools and technologies they need in order to offer a suite of technology services to a business.” — Daniel Saks

And they’re homing in on 3 key elements to get this done:

  1. Monetization: The experience of selling services. 
  2. Engagement tools: The experience of how merchants can use a different suite of services to better manage their customers.
  3. Financial services: These are geared around accelerating AppDirect’s merchant’s growth in the ecosystem. 

Recurring goods and the digital difference

Much of the way companies like Shopify have transformed the consumer experience into a digital one by tackling the supply chain and making it more efficient for merchants to get their products into the hands of their customers. 

When it comes to digital recurring goods, the best approach is still to improve the supply chain capabilities of merchants. 

Only, the digital supply chain looks entirely different. 

“The digital supply chain to sell recurring goods is so different from the physical supply chain to sell one-time physical goods.” — Daniel Saks

B2B services are typically sold in-person or through sales over the phone, a website or sold embedded in a physical device. 

In order to help B2B merchants in a similar manner to Shopify, AppDirect needed to create an omnichannel commerce platform that could similarly handle the shipping of digital products.

Instead of CDs or boxes being shipped, what AppDirect does is trigger API calls that provision the technology. And they’ve become the open standard for enabling a digital good based on a digital vendor, giving them APIs to be resold digitally. 

And because it is a recurring subscription, they then manage the ongoing lifecycle, while taking care of security and the provisioning.

Embedded finance’s role

AppDirect’s platform is open, extensible, and agnostic. 

They have a set of capabilities that can be extended by their merchants — allowing them to use the providers of choice — and that gives these merchants plenty of ways to embed commerce into their supply chain. 

They have clients in the manufacturing space creating IoT products that allow for the ability to incorporate app stores into these products. For example, a checkout could be embedded at a mobile charging station and, while there, consumers could subscribe to different services to process metering, monitoring, and all the transactions being done. 

Daniel sees this as the future for commerce and for the company, since AppDirect is at the forefront of being able to help facilitate these types of transactions.

“I believe the future is embedding commerce into different workflows.” — Daniel Saks

Of course, to get there, the infrastructure behind such services needs to be updated. 

And much like how something like PayPal or Stripe transformed digital consumer transactions, Daniel is clear that AppDirect’s services are not anything new. 

It’s not that the company has invented a whole new form of shopping. 

No, what made PayPal and Stripe so revolutionary was not a new product, it was efficiently organizing the workflow and methodology that already existed in a painless process that was very customer-centric. 

That’s AppDirect’s approach — and it’s how they’re shaping the infrastructure needed to pull B2B into the modern commerce world B2C already lives in.

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Until next time!

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