Online Retail Subscription:

How and why does it work?

What is an online retail subscription? It is a product-by-subscription business

model.

Customers pay a monthly fee, similar to a Netflix subscription, in order to

receive exclusive membership benefits.

What are the benefits of a membership?•Exclusive prices

Shoedazzle offers members a lower “VIP” price

•Free shipping and returns on any order

•First chance at sales

Receive alerts before items go on sale

•Occasional free spending credit

How does it work?

New customers are drawn in with a special one-time promotion plus free shipping and returns

Shoedazzle offers new customers 25% off first purchase and free shipping

After your first purchase, you are given the option of becoming a VIP member to continue receiving benefits.

A VIP member pays a monthly fee.

Monthly Fee = Store Credit aka VIP dollars (for you to spend or save)

Some sites will give you the option to “skip the month”

Some sites will automatically make you a member after the first purchase

Why does it work?#1. Visual Gain vs. Visual Loss

Would you rather see:$35.95 + shipping $4.95

Order Total: $40.90

OR

$35.95 - VIP dollars $9.95

shipping: FREE

Order Total: $26.00

•Every month your credit card (CC) is automatically charged the monthly fee $9.95 and that fee becomes your VIP dollars.

•VIP dollars are for you to spend on purchases and are deducted from the order total, appearing as if you received a discount

Every month your credit card (CC) is automatically charged the monthly fee $9.95 and that fee becomes your VIP dollars.

VIP dollars are for you to spend on purchases and are deducted from the order total, appearing as if you received a discount

#2. Accumulation and Expiration

• If you do not spend your VIP dollars, they will accumulate, but they will expire after a certain number of months

• As the number in your account increases (VIP dollars: $19.90...$29.85) and/or the expiration date gets closer there is an incentive to spend it.

Even if the customer does not make a purchase every month, Shoedazzle can still expect to earn at least

$9.95 a month per member.

#3 Loyalty

“A subscription model allows you to establish long-term relationships with customers as opposed to selling them

one pair of shoes and hoping they come back.” ~ Co-Founder Brian Lee

Membership

Incentive to stick to Shoedazzle

Familiarity

Trust

Loyalty