How Fnac successfully sells software in
the era of SaaS subscriptions
Nexway fueled leading software reseller’s transition from one-time license sales to recurring sales by building and growing an effective subscription program
Market Context
To maintain its leading market position as a combined software and hardware (bundle) reseller, the team at FNAC realized that the company needed to evolve its business model to better adapt and align with how digital-first consumers make purchases today. This involved shifting the company’s longstanding one-off in-store sales model to a more dynamic in-store and online sales and renewal model. The primary goal: to maintain a strong relationship with existing customers, all in an effort to prevent them from purchasing via brands directly.
This was in direct response to a few marketplace trends threatening FNAC’s core business:
- Software companies have already shifted their business models away from one-time “out-of-the-box” sales — which was the de facto method for software sales about 10 years ago — to a more digital-friendly SaaS-based model. Today, software licenses are predominantly sold as subscriptions, which are no longer limited to the once-standard “one computer, one software license” installation model.
- As more software companies have embraced the SaaS-based sales model, they have also started to render software purchases via third-party resellers practically obsolete. Consumers today can easily engage with software and tech brands directly to manage all aspects of subscriptions on their own. This has had a negative impact on the revenue once attributed to software sales for resellers like FNAC.
- This is also happening at a time when the rise of pure online-only players in the tech and media space has dealt a swift and severe blow to brick and mortar retail. This has given retailers no choice but to double down on their online presence and provide customers with a more dynamic, omnichannel shopping experience.
The Challenge
FNAC needed to future-proof its business model by introducing new consumer-facing subscription and billing models as well as offering enhanced payment and commission incentives for its software partners — all while incurring minimal operational implications for FNAC’s in-store and back-office teams. Not an easy feat by any means!
Our solution
FNAC looked to Nexway to help them implement a full-service subscription and renewal management program, powered by the Nexway Monetize platform, to allow the company to sell its software bundles — from well-known brands like Microsoft, Oodrive, and FSecure — via a more modern Saas-baSed model. This included the following:
- Automated Software Add-On Suggestions: For every computer sold in-store or online, purchasers are automatically prompted to add one of two software bundles to their purchase: “Starter Pack” or “Serenity Pack.”
- Branded Fulfillment Experience: Purchasers choosing to add software bundles are guided through a FNAC-branded online or in-app fulfillment process.
- Personalized Renewal Process: As with the initial fulfillment and installation of software (above), the renewal process is completely FNAC-branded and automated. This includes renewal reminder emails, dedicated landing pages, and a personalized shopping cart — powered by customer profile information (via SSO integration).
- Automated Vendor Management: Invoicing, fulfillment, and license management, between FNAC and its software partners, is fully automated by API-triggered events that both simplify and streamline typically manual administrative processes.
- Level 1 Customer Care: Nexway’s world-class customer support, available in 12 languages, is on-hand to address customer needs via email, phone, and chat.
The Results
FNAC’s new subscription and renewal management program, powered by Nexway Monetize, was not only implemented with minimal impact on day-to-day operations, as requested, but it also allowed the company to create a dynamic omnichannel shopping experience that both creates a more cohesive online-to-in-store experience and prevents customers from transacting outside the broader FNAC ecosystem.
In the year following its implementation, FNAC has achieved the following:
- ~1 million software bundles sold
- €3 million in new revenue
- 50% renewal rate
This quickly proved to be a highly scalable and customizable solution that has empowered FNAC to further solidify and extend its customer relationships through additional cross-selling and upselling opportunities (like offering new software bundles).
This has also helped FNAC achieve a stronger relationship with its major software partners. Not only did this solution give them a single point of contact for invoicing, fulfillment, and license management, but it also allowed FNAC to actively support and amplify the existing SaaS strategies of its software partners like never before.
Looking for the future
This is just the beginning. FNAC has already started thinking about how to leverage Nexway Monetize to grow the success of its subscription and renewal management program. Key growth objectives include:
- Increase customer retention by both shifting some products into auto-renewal mode and developing a renewal center in the FNAC customer portal that makes it easy for customers to manage payments, subscriptions, renewals, and more.
- Expand the subscription offering beyond computer-based software to include digital security products, music, and other mobile offerings.
- Create a robust cross-selling program tied to each computer sold by FNAC that generates long-lasting initial subscription and renewals revenues.
“
We are excited to partner with FNAC and Nexway on this innovative “Starter Pack” solution for license delivery and renewal. It’s important for our resellers to offer viable, long-term solutions that both enhance the end-user experience — all within a reseller’s branded environment — and increase subscription renewal rates.
Aymeric Soullard, Microsoft’s Retail Sales Director at Microsoft France
Why Choose Nexway?
Product & cart management
Subscription & billing
Payment in 140+ countries – fraud & chargebacks management
Automated retention & cross-selling campaigns
Customer insights
B2B & reseller management
VAT & tax processing
Smooth integration into your existing store & back-office tools via API
About Fnac Darty Group
Operating in eleven countries, Fnac Darty is a European leader in the retail of entertainment and leisure products, consumer electronics and household appliances. As ofend of December 2017, the Group, which has 26,000 employees, hasa multi-format network of 728 stores, including 502 in France, and is ranked France’s second most visited e-commerce site (nearly 20 million unique visitors per month) with its two retail websites, fnac.comand darty.com. A standard-setting omni-channel retailer, Fnac Darty posted pro-forma revenues of €7.4 billion in 2017.