Monthly Archives: October 2015

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Birchbox, Stitch Fix, these are some of the names of subscription services that was the trend back in 2013. This e-commerce subscription model consisted of paying a monthly fee for different products to be delivered to your doorstep.

However, recently these subscriptions face challenges for consumers as once you join the membership it’s tough to get out, resulting in recurring credit card fees after you’ve cancelled your order.

In my opinion, these subscription box services are a hit and miss depending on the consumers. These boxes come with a variety of different samples thus each month the products delivered to the consumer could be favourable or have the opposite effect.

This service quickly grew because consumers were constantly eager to try new products but after a short time period consumers stopped buying the products after they’ve got the chance to try them out.

These firms should adapt to differentiation in order for their products to appeal to customers to an extent that they would be willing to pay for a monthly subscription creating customer loyalty. Subscriptions are powerful, but it all depends on how firms decide to differentiate their brand. Providing products that can’t be purchased anywhere else or services with strong customer service such as “Netflix” will result in more subscriptions for the firm. As Birchbox stated, building stronger relationships with their consumers has the potential to be translated into increased revenue. Thus they should aim to interact more with their consumers to learn what kinds of product they want in their subscription, helping them create a close relationship with they buyers.

Sources:

http://www.businessinsider.com/the-pros-and-cons-of-subscription-models-2015-9

https://blog.compete.com/2014/03/31/subscription-services-ecommerce/

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Evernote, the note taking application started off worth one billion dollars however fast forward to three years, and the tables have turned.

What was once a firm with 30 million registered users with a total funding of $270 million is now cutting 47 employees and shutting down 3 out 10 of its global offices.

So what caused Evernote’s downfall in revenue?

Former employees believe that its the firms lack of focus on its growth and poor choice in prioritization. Instead of focusing on its core product that helped them attain their revenue in the first place, they spent more time on releasing new products and features. Evernote’s sole priority was making money and they were corrupted with the mindset that producing more new products would help them do so. However, my take on this is that if a firm tries to expand its company into producing different items, if wouldn’t differentiate from other firms. Instead, I feel that Evernote should focus on its core product and work towards enhancing its features to keep its customers.

Thus, Evernote should pursue a focus-differentiation strategy. In order for the firm to achieve long run growth they should focus on how they can differentiate their application from other rivalry such as Noteshelf and Simplenotes. Differentiating their application will allow them to pass higher costs to customers since close substitutes don’t exist.

Before Evernote drifts away from its top status it should prioritize their focus and cut back on investments to improve its cash flow to help maintain their reputation.

Sources:

http://www.businessinsider.com/evernote-is-in-deep-trouble-2015-10