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Subscription Service The Next Big Thing For Online Retail In 2014, Analysts Say

January 22, 2014: 12:00 AM EST
Ecommerce companies are forecast to adopt subscription-based sales platforms in 2014, driven by growing consumer demand for instant gratification and the expanding adoption of mobile devices, according to market research firm Gartner Inc. Online sellers of digital products, such as music, video, and games, are expected to take the lead in adopting subscription services; however, physical goods, such as cosmetics and snacks, are also forecast to become popular. Among the companies trying the subscription waters are Birchbox with the 400,000 subscribers to its cosmetics service and JustFab, which has secured $55 million in funding by convincing investors about the merits of its fashion subscription service. Subscription services offer many advantages for online retailers, such as a regular income, more chances to upsell, and the ability to create deeper interactions with customers. There are also some issues that need to be considered, such as the need to convince customers to stay with the service each month and the inability of current software to manage subscription fully.
Lisa Wirthman, "Subscription Services: The E-Commerce Trend To Watch In 2014", Forbes.com, January 22, 2014, © Forbes.com LLC
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