All the news that’s fit to print from the front lines of retail technology

In December, we declared BOPUS to be Acronym of the Year. It’s only February, but we think we’ve got a contender for 2019: the rundle, or “recurring revenue bundle”. Read on to learn more. (And yes, we’re aware that rundle isn’t technically an acronym.)

Popsugar Was a Neuroscientist

PitchBook looks at the science and data behind the subscription box craze, digging into neuroscience concepts behind “novelty seeking” before taking a deep dive into the practices behind some of the more successful subscription box services.

There are great insights and quotes throughout, including this from FabFitFun cofounder Daniel Broukhim: “We are using machine learning to make predictions around what products we should send to customers, and we are using that to increase personalization… We are kind of building ‘micro-communities’ for our customers to provide feedback and our brands to provide engagement and activity to customers, and ultimately increase sales.”

[PitchBook]

A Chair for the Unexpected

Have you considered renting that Vluüaloö chair, rather than buying (and assembling) it yourself? Then you could be in luck — Ikea will be test driving a subscription-based furniture leasing program at some Swedish locations later this month, “in an effort to grow repeat revenue and appeal to customers’ desire for newness…”

As Digiday points out, the subscription model is finding success in unexpected verticals such as home furnishings. Restoration Hardware’s two-year-old membership program is now driving 95% of their core business. You can also check out analysis from Gartner L2, which makes ample use of Scott Galloway’s favorite neologism, the Rundle.

[Digiday]

Selling the Dream

MarTech Today examines the new marketing challenges that arise from the retail industry’s tectonic shift to relationship commerce. Pointing to a McKinsey & Company study that shows “subscription sales to products has grown by more than 100 percent every year since 2014.”

Naturally that means a product’s sales pitch is less about the novelty and more about the experience. SAP Sales Cloud GM Giles House told the pub, “Adoption of recurring revenue services will be driven by the innovation and personalization of the experience.”

[MarTech Today]

The Java Jive

Please indulge us in a little bit of self-promotion, but we can’t help but highlight this Digital Commerce 360 look at how Illy caffe SpA has transformed their sales through subscription offerings (powered by Ordergroove).

We’ll just leave this quote from the piece right here, “Since the Ordergroove technology launched on Illy.com in June 2017, 44% of U.S. Illy subscribers chose the Illy a Casa program, and shoppers in the Illy a Casa program spent 88% more than just normal subscribers. Plus, Illy.com’s net promoter score increased 10%.”

[Digital Commerce 360]

“Since the Ordergroove technology launched on Illy.com in June 2017, 44% of U.S. Illy subscribers chose the Illy a Casa program, and shoppers in the Illy a Casa program spent 88% more than just normal subscribers.”

Così Fan Beauty

PYMNTS’ latest “Retail Innovation Readiness Index” study takes a look at the beauty industry, gauging “8 essential factors that make or break health and beauty consumers’ shopping experience, and measure how prepared merchants are to innovate and able to retain customer loyalty.”

Perhaps the most salient takeaway from the study — 61.7% of merchants said customer loyalty was their top reason for innovating. But the struggle for the right technology and resources appears to be handicapping many newcomers in the space, the study suggests.

[PYMNTS]