From the peaks experienced during the pandemic, e-commerce sales are beginning to drop off as the cost of living crisis really kicks in. But there are some aspects of the industry that are defying the downward trend. On the back of the success of Amazon Prime, subscription-based models are leading the way in the new ecommerce revolution.

When experts first noticed the surge in online shopping due to the pandemic, they predicted that many would not go back to bricks and mortar stores. And at first, this prediction seemed set to play out. But now that the world has been plunged into yet another crisis, the future appears a little less certain. As a result, e-commerce retailers have been looking for ways to draw in customers and keep them returning time and time again — and subscription models have provided an innovative solution.

Perhaps unsurprisingly, online retail giant Amazon was one of the first to lead the way, introducing its Prime subscription model. For a small monthly fee, customers gain a whole host of benefits, including free next-day shipping, streaming services, exclusive discounts and more. As well as bringing in extra revenue for the company, this approach also makes customers much more likely to choose their subscribed service over any competitors — creating even more benefits for the supplier.

Now, other companies are getting in on the act, such as new start-up Ordergroove, a platform that enables competing retailers to build their own subscription services. Recently, Ordergroove announced that it had received a staggering $100 million in funding, enabling them to roll out their services across the board. 

Currently, Ordergroove provides some of the world’s biggest retailers with the tools they need to offer tailored subscription services. But their approach works just as well with smaller ecommerce companies as well. And there are interesting plans in place for the future, too, such as prepay subscriptions which offer discounts on goods or services purchased in advance.

It’s a technique that has seen the current downward trend in ecommerce flipped on its head. In fact, at Ordergroove gross merchandise value is growing at levels equal to those seen during the pandemic — and customer retention is almost 90%. When compared to other sectors of the industry, where sales have dropped by several percent, it’s a pattern that many online retailers will seek to recreate.

So are subscription-based models the future of ecommerce? Or are they merely another trend that will fade and disappear over the years? Only time will tell.