OrderGroove’s back-end technology allows big brands such as L’Oreal, Teavana, and Jockey to offer subscription plans to their customers. For example, L’Oreal customers can subscribe to their favorite skincare products to have them delivered on a regular basis. OrderGroove says its clients see a two- to four-fold increase in customer lifetime value.
But OrderGroove customers also turn to subscription-based models to target a different kind of customer, one who values convenience above all else. Customers checking out of retailers using the OrderGroove platform can set their purchase to auto-reorder after a certain period of time. That comes in handy when you’re buying something you’ve built brand loyalty toward and run out of frequently, such as toilet paper. The auto-reorder based subscription model then becomes convenient for the customer, who no longer has to worry about going out to replace their supplies, and good for the business because it lessens the possibility that they’ll lose the customer to a competing brand.
“OrderGroove’s subscription and club model offers the ultimate level of convenience for retailers to remain in step with shoppers, simplifying the hassle of shopping for essentials as well as introducing the discovery of new passions through curated product discovery clubs,” says CEO Greg Alvo.
OrderGroove just went through a fresh new $7 million funding round from investors including former Walmart CEO, Raul Vazquez.
The subscription model has been criticized in the wake of the Birchbox Effect. But unlike companies such as ShoeDazzle, which built its business around a subscription model only to for a much more traditional pay-per-item strategy a few years later, OrderGroove clients are companies who don’t depend on subscriptions for the bulk of their business.
[Image: Flickr user donireewalker]