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The Subscription Model: The Shining Star of E-Commerce

Subscription sales have become a strong part of e-commerce. Everything from razors to dog toys to movies is being sold on the subscription model, and subscriptions don’t show any signs of letting up.

“Our customers tell us that opening their BarkBox with their dog is one of the best experiences they share every month,” said Allison Stadd, vice president of marketing at Bark, about its monthly dog supply box.

“Typically by the second or third month, most dogs will recognize that box and go crazy when they see it. Nothing makes true dog people happier than seeing their dog go nuts with excitement,” she told the E-Commerce Times.

Bark Box

Subscriptions can be beneficial both for companies, which get a dedicated customer base and steady income stream, and for customers, who get convenience and curated novelty.

“For merchants, recurring revenue is great for business,” said Brent Shepherd, subscriptions team lead at WooCommerce.

“It can increase revenue and revenue growth rates, as well as provide more predictability on future revenues,” he told the E-Commerce Times. “For customers, if you find a consumable good or service you love, it’s far more convenient to subscribe than to purchase it manually each week or month.”

Look for Opportunities

Companies increasingly have been looking for anything at all that might work if offered as a subscription, even if it’s a product that once would have been bought as needed in brick-and-mortar stores.

“Businesses I see enjoying success with WooCommerce subscriptions started with a good or service already consumed regularly — like food, beverage, cosmetics, clothing, media or education,” said Shepherd. “They then added a unique experience on top of that. Only after that do they introduce the subscription model to provide a layer of convenience for accessing their unique offering.”

The combination of offering a regularly purchased product enhanced by thoughtful curation seems to be the winning model in the subscription marketplace.

“Some big successes have been realized by simply looking at long-established business models and reworking them as subscription businesses,” said Darryl Hall, president of Big Innovations.

“For example, not so long ago, consumers purchased mainstream products like razors in single transactions,” he told the E-Commerce Times.

“Unless you are pretty young, you’ve probably purchased them the same way your dad did, and his dad before him,” Hall continued. “Products like that may have generations of customers thoroughly accustomed to a single business model association. Entities like Dollar Shave Club and similar [offer] an alternative. Now a market of razor users subscribe to purchase this kind of product.”

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Innovative Thinking

In the case of Bark, the company looked at a market that it saw as underserved — and could be served perhaps best with a subscription.

“Before Bark launched BarkBox, there was very limited innovation in the pet space,” noted Stadd. “No one was catering to the modern dog person mindset that dogs are members of the family and therefore deserve to have their needs taken seriously. No one in pets was talking to dog-obsessed millennials the way that kid brands talk to parents.”

Bark Bike

That kind of innovative thinking led the company to target an emerging market and adopt a business model that could shape and serve it.

“Bark boomed as unashamed dog obsession in America boomed,” said Stadd.

“When dogs were kept outside in the doghouse, our business might have been different. We also owe much of our rise to a shareworthy product and smart organic social media strategy, which is and always has been all about ridiculously silly dog content that entertains vs. sells,” she continued.

“Without the Internet, Bark wouldn’t exist today,” Stadd acknowledged. “Digital platforms and algorithms have changed, which means the game today has bigger and more expensive barriers, but dog obsession continues to scale and we don’t see that changing any time soon.”

Making Subscriptions Work

One key to a successful subscription model is making the price competitive. The subscription must offer value to consumers, both in terms of the products themselves and the curation of those products.

“A new online subscription model must be competitive,” said Big Innovations’ Hall. “If the market is already accustomed to a price for a kind of product or service you want to introduce, but you want to roll yours out at a much higher price, what about your offering is going to justify your price? Every time a popular, well-established business like Netflix tries to raise pricing by a dollar or two, the marketplace for that kind of service tends to freak out — over a dollar.”

Perhaps more than any other kind of sales, subscription sales are about building relationships between consumers and the companies that serve them.

“Unlike traditional buyer/seller models, subscription models really are relationship sales,” said Hall.

“They are probably the form of selling that must max out the concept. After you jump through what can be many hoops to win a new subscriber, a dominating task becomes keeping them,” he pointed out. “In subscription models you can’t sell them and forget them. The sales job is not done when money first changes hands. Instead, you must then strive to bond with them. Nurturing programs are about building and strengthening such bonds.”

Another key is to think of the value that will be released over time, since unlike a one-time purchase, a subscription is ideally spread over time and into the future.

“Fundamentally, the most important variable is based in how it delivers its value,” said Hall. “The most successful online subscription models will release their value in a relatively steady stream over time. We borrow a term from big pharma when exploring such models with clients. Whatever they are thinking about as seeds for their own subscription model is strengthened as a concept if it has ‘time-release’ value. If those seeds deliver the bulk of their value in one big deliverable, there’s little motivation for subscribers to persist their subscription.”

With all of the benefits of the subscription model, it’s likely to remain a vital part of the e-commerce ecosystem, as consumers come to expect subscription options for many of the products they want and need.

“We’re seeing increasing demand from consumers for the convenience of the subscription model,” said WooCommerce’s Shepherd. “This demand may evolve into an expectation from consumers that a subscription will be available for things not traditionally offered on subscription but well suited to them, like groceries. This expectation creates new opportunities for existing businesses and startups alike.”

Vivian Wagner has been an ECT News Network reporter since 2008. Her main areas of focus are technology, business, CRM, e-commerce, privacy, security, arts, culture and diversity. She has extensive experience reporting on business and technology for a variety of outlets, including The Atlantic, The Establishment and O, The Oprah Magazine. She holds a PhD in English with a specialty in modern American literature and culture. She received a first-place feature reporting award from the Ohio Society of Professional Journalists. Email Vivian.

GetAccept’s workflow and e-signature platform for sales secures $7M Series A funding

Many years ago every sales deal was sealed with a handshake between two people. Today, digitization has moved into the sales process, but it hasn’t necessarily improved the experience. In fact, it’s often become a more time-consuming affair because information and communications are scattered across multiple channels and the number of people involved in a deal has increased. That means lots of offers and quotes are get lost in the mix.

GetAccept a startup which provides an all-in-one sales platform where video, live chat, proposal design, document tracking and e-signatures come together to simplify the life of a sales team.

It’s now convinced investors there is such a need, raising a $7 million Series A funding round led by DN Capital, with participation from BootstrapLabs, Y Combinator and a number of Spotify’s early investors including ex-CFO of Spotify, Peter Sterky. The former CMO of Slack and Zendesk, Bill Macaitis, will also join the company’s Board of Directors.

The new capital will be used to scale sales and marketing, and accelerate product innovation for GetAccept’s industry leading document workflow solution for sales.

This round brings GetAccept’s total financing raised to $9M after then won their first seed round in 2017.

Samir Smajic, CEO, GetAccept says while CRM systems have made it easier for sales teams to manage pipeline and broker deals, “60 percent of all contracts are lost to indecision or simply go unanswered… Prospects no longer have to interact with reps to get basic information about a product or service, making the sales process highly impersonal. But prospects still need a rep to guide them through an increasingly complex B2B sales process in order to make better-informed buying decisions.” He believes GetAccept bridges this growing “engagement gap”.

GetAccept integrates into a company’s sales pipeline through technology partnerships with CRM and sales automation platforms including Salesforce, HubSpot, Microsoft Dynamics 365 and others.

It’s pitched as an all-in-one sales platform which compete with several separate tools including well-financed solutions likeDocsend, Pandadoc, Showpad, Highspot, Docusign, and Adobe Sign. Their ‘sales pitch’ is that companies can do all of the things in those products but the single GetAccept platform is actually geared toward to sales reps and includes the important features that help sales reps to actually move deals forward.

“Getting a deal to the point of contract has become increasingly difficult because buyers now get most of their information online,” said Thomas Rubens, Partner at DN Capital. “GetAccept honed in on this growing issue early on and built a best-in-class platform for managing document workflow and engagement across the entire sales cycle.”

GetAccept has so far signed customers including Samsung, Stanley and Siemens . It’s also expanded to the US and EMEA including Norway, Denmark and France.

E-Commerce Startup Bolt Snags $68M to Grow Checkout Biz

E-commerce checkout platform vendor Bolt has raised US$68 million in a Series B funding round co-led by Activant Capital and Tribe Capital, bringing the total amount raised so far to $90M.

Individuals in the retail field also kicked in money. They include Benny Joseph, head of engineering at environmentally friendly footwear manufacturer Allbirds; Jonathan Tam, Revolve Clothing’s director of operations; Dave Heath, CEO of sock maker Bombas; and Melissa Mash, CEO of handbag maker Dagne Dover.

Bolt has earmarked the capital for the following uses:

  • Increase its engineering team, which now totals 20 people;
  • Invest in additional enterprise functionality for larger retailers;
  • Partner with best-in-breed e-commerce tools, shopping carts and payments platforms;
  • Build advanced features, functionality, and optimizations around the shopping experience; and
  • Expand global functionality.

Bolt launched publicly in January 2018. It claims to have reached an annualized payment processing volume of more than $1 billion, conducted more than 1.5 million transactions through its platform, and helped customers realize more than $25M in new revenue.

The Bolt team grew from 10 people working out of a loft in San Francisco to more than 125 employees across three offices.

Upwards of 100 online merchants reportedly had adopted Bolt systems as of January 2018, including Invicta,, Brian Gavin Diamonds, and HUF Worldwide.

Everything Under One Roof

Bolt’s platform combines checkout, payments and fraud detection to provide a better buying experience for shoppers and maximize conversions for retailers, according to the company.

Conversion is crucial. Only 48 percent of etailers converted visitors to purchasers in Q2 2018. The study covered 673 merchants collectively accounting for 73 percent of e-commerce sales in the United States.

Overall, the average cart abandonment rate is nearly 68 percent. That translates to about $4.6 trillion worth of merchandise over a year.

Bolt’s Technology

Bolt claims its checkout page is up to 10 times faster than the competition because it reportedly uses a preprocessing technique that loads elements and code in seconds.

“Speed always matters,” observed Ray Wang, senior analyst at Constellation Research. “You want to make sure clients can quickly make impulse purchases and accelerate their ability to close out a deal.”

Bolt probably “connects with Google or Facebook or other online accounts that already have that information stored, with permission, so the user doesn’t have to type it all in again,” suggested Daniel Elman, research analyst at Nucleus Research.

Its platform eliminates the need for consumers to enter a billing address. Its mobile page is no-scroll and above-the-fold. Shoppers can choose to sign up for an account after they have entered their payment information instead of before doing so as is the norm.

Still, consumers would at some point need to set up an account with Bolt that contains [billing and shipping] information, said Michael Jude, program manager at Stratecast/Frost & Sullivan.

“Think Paypal. You don’t need to enter anything except your PayPal account ID and password, and it charges your credit card and provides the billing and shipping information to the merchant,” he told the E-Commerce Times.

Checkout and payment processing tools are crucial for e-commerce SMBs. However, they are “very expensive” to invest in, Constellation’s Wang told the E-Commerce Times.

Bolt’s payments processing back end reportedly is fully compliant with PCI level-1 rules, and the platform has built-in A/B testing features that let developers push improvements continuously.

Fighting Fraud

Online retailers will lose $130 billion worldwide in card-not-present fraud over the next five years, Juniper Research has predicted.

Fighting fraud doesn’t come cheap.

“We estimate 17 to 19 cents on the dollar is spent on combating fraud in luxury items and gift cards,” Wang said. Overall, retailers spend 11 to 15 cents on the dollar combating fraud.

To fight fraud, Bolt’s platform reportedly captures mouse pointer locations, typing speeds and accuracies, copying and pasting behaviors, and other browsing, cart and checkout data. Its machine learning algorithms analyze more than 200 variables in each transaction, and a dedicated team reviews every declined transaction.

Customers flagged as potentially malicious can provide additional information to get their orders approved.

“It seems like the fraud prevention measures are currently effective, but, like anything else regarding cybersecurity, they’ll be useful until some malicious actor decides to work around them,” Nucleus Research’s Elman told the E-Commerce Times.

“If the NSA can be hacked, a company like Bolt doesn’t stand much of a chance against determined bad actors,” he said.

Bolt covers 100 percent of fraudulent chargebacks.

That “could quickly become table stakes to compete in the space.” Elman said. “With the growing prevalence of card-not-present fraud, customers are going to be wary of the threat and will choose the vendors that best offer protections.”

Vesta also offers 100 percent chargeback protection.

“You have to be good to cover 100 percent of fraud,” Wang said. “Only a few folks can do this. Vesta is a good alternative, but they need to invest in expanding their network and reach.”

Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. Email Richard.

Signpost Secures $52M to Expand Its SMB Marketing Reach

Cloud marketing company Signpost has raised US$52 million in new funding to “increase the scale of our business and invest in our technology,” CEO Stuart Wall said Tuesday.

The funding was provided by HighBar Partners and BMO Bank of Montreal as well as previous investors Georgian Partners and Spark Capital.

Signpost expects to add employees in all three of its offices — in New York; Austin, Texas; and Denver, Colorado — and will move its New York headquarters to Seventh Avenue this month.

The company’s Software as a Service platform for small and mid-sized businesses consists of artificial intelligence-based customer relationship management and marketing automation technology powered by automated data collection and cross-channel marketing.

Narrow Focus

“Many local business owners are seeing their competitors benefit from adopting CRM and marketing technology in terms of getting more and better reviews and executing better marketing,” said Wall.

“Also, many are recognizing that investing in technology is the best way for them to delegate manual tasks and reclaim time to focus on their businesses and serving their customers,” he told CRM Buyer.

“What sets Signpost apart is that it has designed a system specifically for small businesses that are managing customer lists, customer emails and online consumer reviews,” noted Nicole France, senior analyst at Constellation Research.

“That’s a distinct, and narrower, set of priorities from what large enterprises need, but more than just email marketing,” she told CRM Buyer. “Though the company has incorporated some AI and automation, it’s applied to these particular areas of focus.”

Signpost’s latest round of fundraising follows a banner year. It achieved cash flow break-even ahead of schedule early this year, as well as 43 percent year-over-year growth in its core product and less than 1 percent customer churn.

This strong growth “indicates just how much demand exists for solutions tailored to the needs of small and very small businesses,” France pointed out. However, SMBs “can’t afford to pay for technology they don’t use.”

Platform Features

After a five-minute onboarding process, Signpost connects seamlessly to users’ phone systems, email services, and other key business platforms, and automatically gathers all of their customer contact information.

Behavioral data collected from more than 70 million U.S. customers help Signpost’s users convert prospects, drive repeat business, and generate new reviews.

Signpost’s platform enables small business owners to do the following:

  • Capture customer contact information whenever prospects and customers call, text, email, or buy their products or services;
  • Automatically send texts and emails to drive more feedback, new customers, better reviews, referrals, and more repeat business;
  • Make payments effortless with Signpost Payments, a complete card payment solution with free equipment; and
  • Draw on digital marketing expertise from Signpost’s Customer Success Managers to drive more reviews and increase revenue.

“The main challenge is for local business owners to find the time to figure out how they’re going to get more reviews or develop effective marketing programs,” Wall said. “It’s why Signpost has invested so much in automating its platform and making it as easy as possible for business owners to get results.”

Signpost’s depth of automation is a differentiator, observed Daniel Elman, research analyst at Nucleus Research.

“Most CRM systems are primarily a system of record to organize customer information and track engagements,” he told CRM Buyer. “In order to be effective they require consistent manual data entry by the user.”

Many competing offerings “leverage AI to recommend next action for sales reps and discover trends in data, but Mia, Signpost’s AI-powered CRM, is more hands-off and can virtually eliminate the manual data entry step,” Elman said.

“Additionally, having data from 16 million customers built-in to pretrain the AI is a key differentiator,” he pointed out. “This allows it to be immediately viable for SMBs that often don’t have the years of historical data needed for training an AI system, or the resources to build these capabilities organically.”

Integration With Key Business Partners

The platform offers easy integration to Quickbooks Online, Constant Contact, Mailchimp and Square.

Signpost’s AI feature, Mia, syncs all the contact information and transaction data, and will send feedback and review requests for new purchases.

More than 1,200 customers have used Signpost’s integration.

Signpost’s partnership with machine learning ad platform Acquisio in 2017 lets Signpost users leverage Acquisio’s Promote platform for search engine marketing on Google Adwords.

“Given the long tail of SMB opportunities, particularly among very small businesses, Signpost’s investors likely see the company’s current growth rate as a good indication that there’s still plenty of room for growth in this market,” Constellation’s France said. “An effective but carefully tailored set of capabilities that meet the distinct needs of small businesses has ample opportunity.”

For example, Mailchimp this spring unveiled an all-in-one marketing platform that includes CRM.

“SMBs are looking for solutions that help them do four basic functions: collect, organize, understand and act, and our marketing CRM is the center of that process,” said Darcy Kurtz, Mailchimp’s VP of global product marketing.

“We anticipate rapid adoption of our full-service marketing suite, as SMB tech is a largely untapped market, but the opportunity is massive. Small businesses contribute to 48 percent of the national GDP,” she told CRM Buyer.

Signpost’s Solutions

Signpost offers three solutions:

  • Basic, the most popular, is for businesses that communicate with customers primarily through email and only want new reviews;
  • Standard is for customers who want to add phone and text communications; and
  • Pro is designed for businesses that want marketing strategy support on top of all that.

Customers pay a flat fee of $200 to $400 a month, depending on the solution, Wall said. There is a discount for annual upfront payments.

There are also several vendors that offer CRM packages for small businesses at no cost.

The upside of CRM solutions for SMBs, said Constellation’s France, “is greater market reach and the ability to punch above their weight in name recognition and growth.”

Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. Email Richard.

Workers’ Prime Day Strike Could Pose a Problem for Amazon

By Jack M. Germain
Jul 9, 2019 10:18 AM PT

Amazon workers at the Shakopee, Minnesota, fulfillment center plan to strike for six hours on July 15, the first day of Amazon’s annual Prime Day sales event.

The strike threat reportedly is linked to unsafe working conditions at Amazon’s warehouses, caused by low wages and pressure to meet shipping demands. Union officials also want a larger portion of temporary warehouse workers converted to full-time employees.

Amazon started the Prime Day sales event five years ago as a one-day offer for deep discounts on products to attract and retain Prime subscribers who get free shipping and other perks. Prime Day last year lasted 36 hours. This year, Amazon is turning the sales circus to a 48-hour event.

Striking for the stated reasons will amount to a wasted effort, Amazon said Monday, because the company now offers what the workers are seeking.

“The fact is Amazon offers already what this outside organization is asking for,” said Amazon spokesperson Katie Loughnane.

“We provide great employment opportunities with excellent pay — ranging from (US)$16.25 to $20.80 an hour — and comprehensive benefits including healthcare, up to 20 weeks parental leave, paid education, promotional opportunities, and more,” she told the E-Commerce Times.

Amazon encourages anyone to compare its pay, benefits and workplace to other retailers and major employers in the Shakopee community and across the country, Loughnane said. The company invites doubters to see for themselves by touring the facility.

Earlier Activism

Worker unrest at Amazon facilities are common in Europe, where unions are stronger. Amazon’s U.S. workers have not initiated strikes until now. In response to worker unrest and attacks from U.S. politicians to levy targeted taxes against the company for labor issues, Amazon last year committed to paying all employees at least $15 an hour.

Three women from a Minnesota warehouse this spring filed a federal complaint against Amazon, alleging they faced racial and religious discrimination while working there and calling for an investigation.

The women feared taking time off to pray, fast, or go to the bathroom, they said.

White workers were promoted over East African and Muslim Somali workers and given better jobs, they maintained.

About 250 union pilots for Amazon and DHL Worldwide Express staged a brief strike in advance of Thanksgiving in 2016. A federal judge ordered them back to work, thus eliminating any disruptions during the peak holiday shopping season.

Fighting Back

Much of the worker discontent at Amazon’s warehouses reportedly involves East African Muslim immigrants. Strike organizers claim those workers compose the majority of the company’s workforce at multiple Minnesota facilities.

Union leaders reportedly want Amazon to lower productivity quotas that they contend make the jobs unsafe and insecure. Those demands could be bolstered by promises of support from within the Amazon hierarchy. Many of Amazon’s white-collar engineers are expected to rally around warehouse strikers.

Some Amazon workers at the Minnesota plants have taken their complaints to the federal government. Their activism earlier this year was punished illegally, they say in a claim to the National Labor Relations Board.

The board has received about 50 complaints about Amazon, most of which have been withdrawn or dismissed. The Shakopee worker complaint stands out since it alleges collective mistreatment of more than a dozen staff.

Amazon Counters

The reasons put forth for the threatened Prime Day strike by warehouse workers are baseless allegations, according to Amazon’s Loughnane, who maintained that in particular, there has been no shortage of full-time job offers.

On average, 90 percent of Amazon associates at the Shakopee fulfillment center are full-time Amazon employed, she said. Year-to-date, more than 100 temporary associates have converted to full-time Amazon positions, and more than 30 were offered Amazon roles last week.

“Productivity metrics have not changed since November 2018, more than seven months ago,” said Loughnane. “Associate performance is measured and evaluated over a long period of time, as we know that a variety of things could impact the ability to meet expectations in any given day or hour.”

Amazon’s policy is that more than 75 percent of associates already are exceeding rate expectations before any changes are considered. The company supports people who are not performing to the levels expected with dedicated coaching to help them improve, she said.

False Media Perspective

Amazon runs its operations meticulously and plans for contingencies, so functional disruption to its operations as a result of a strike at one location will not have material impact, according to David Camp, managing partner at Metaforce. He previously headed marketing at Amazon Wireless.

“From a PR perspective, a symbolic strike of even a small order will of course prompt widespread media attention, given that the media often likes to portray Amazon as evil overlord of e-commerce,” he told the E-Commerce Times.

Most people employed at Amazon warehouses are happy with their jobs, Camp said, but “Amazon’s institutional arrogance” may have contributed to slowness in shaping the narrative of its employment practices. As a result, the company is now on the defensive.

“Still, Amazon labor practices and benefits to warehouse workers are comparable to if not better than industry standards,” he said.

Little Impact

While it’s unlikely that the upcoming strike will disrupt Amazon sales in the short term, it will have a critical effect on consumer perception and awareness that could influence purchase behavior in the longer term, observed Anjali Lai, senior analyst at Forrester.

It could encourage coworkers elsewhere to stage similar job walkouts, she told the E-Commerce Times. Empowered consumers and employees are not averse to leveraging their passion to make a coordinated statement.

“Especially because white-collar workers plan to join the protest in solidarity, Amazon should recognize that its brand is not immune to values-driven uprisings from any employees at any level or in any function,” said Lai.

The planned protest has the potential to exceed the damage done by previous publicity about Amazon’s dubious company practices. So far CEO Jeff Bezos has been extremely nimble at crisis control.

However, “this planned protest poses a bigger problem because of what it represents,” suggested Lai.

“This potential walkout comes at a time when consumer and employee emotions around company values run high,” she said, “when consumers and employees want to be a part of the solution — not just recipients of the latest top-down decision — and when a stellar customer experience is no longer enough to buffer against a lacking employee experience.”

What to Do

Amazon needs to treat its employees with the same degree of “obsession” that it claims to treat its customers, according to Lai. She suggested five helpful company responses:

  • listen to and acknowledge employee demands;
  • demonstrate alignment between company values and employee values;
  • encourage employees to view their work as a means to a higher purpose;
  • facilitate a sense of community among employees with shared values; and
  • show gratitude for employee dedication to ensure that employees feel validated.

“Although raising wages and tweaking company policies may appear to appease employees for now, these tactics don’t address the underlying issue and won’t stave off future protests that are likely to grow in scale and intensity,” said Lai.

Amazon also must assess its role as an industry leader, said Metaforce’s Camp. The company should better recognize that its position at the top of the food chain comes with greater expectations of corporate responsibility and transparency.

“Further, Amazon should be more proactive in promoting the reality of its labor practices with data and facts,” he said, “and bring the faces from the factory floor to the fore of the conversation to illustrate how most workers are in fact happy to have their jobs.”

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open source technologies. He has written numerous reviews of Linux distros and other open source software. Email Jack.