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Subscription e-Commerce: Embarking on the New Era of Digital Shopping

By CIOReview | Friday, April 13, 2018

Amid a mundane shopping environment, which is dominated by e-commerce sites, a new phenomenon has taken this landscape by storm collectively known as subscription e-commerce. Such companies mail monthly shopping carts that include fashion accessories, food items, and others directly to customers. Also, these e-commerce innovators stick to a flexible price range that assists their customers in saving costs. When FMCG giant Unilever acquired Dollar Shave Club-the best start-up in the subscription e-commerce space-for a whopping $1 billion, the attention of the world was arrested by this newfangled business strategy, and since then its popularity has skyrocketed. Among the many factors that attribute to the success of box subscription companies, its low startup cost and recurring revenue systems are the major ones. Furthermore, such a framework is extremely flexible and can scale up to consumer demands in no time.

Data Analytics plays a major role in architecting the success of the subscription e-commerce business model. The biggest obstacle facing such companies is the high data processing rate from a technological standpoint and membership cancellation from the purview of business. To mitigate such challenges, box e-commerce companies need to get into the minds of customers and predict their likes and dislikes. This is where AI-based recommending systems come in handy. Such systems allow organizations to know the preferences of their customers and diminish the cancellation rates. Asides, the data churned out in the process can be parsed through analytics tool to gain further insights into consumer trends and behavior.

The application of box-based e-commerce model is gradually gaining traction, and many e-commerce organizations are currently taking notice. To ensure that this turnkey business tactic is successful, sufficient R&D initiatives have to be employed in the forthcoming years.

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