On the Value of Subscription Models for Online Grocery Retail

Demand Management for Attended Home Delivery – A Literature Review

“…The discussed contributions provide valuable insight into relevant aspects of strategic demand management. Compared to the operational and tactical level, the set of research methodologies is more diverse and includes prescriptive analytics (Bruck et al, 2020;Wagner et al, 2021), simulation and scenario evaluation (Agatz et al, 2021;Boyer et al, 2009;Lin & Mahmassani, 2002;Manerba et al, 2018;Phillipson & van Kempen, 2021;Ramaekers et al, 2018;Ulmer, 2017), and game-theoretic (Belavina et al, 2017;Gümüş et al, 2013) and empirical (e.g., de Magalhães, 2021;Milioti et al, 2020) analyses. We explain this observation by the strong interdependencies of strategic demand management with other domains.…”

“…The authors conclude that the subscription model tends to be more environmentally friendly because the reduction in food waste emissions outweighs the increase in delivery emissions, but they still recommend the per-order model for high-margin providers that operate in sparsely populated areas. Wagner et al (2021) show that on average, the increased order frequency entails a profit loss as the increase in assembly and delivery costs outweighs the increase in revenue. The authors explain this effect as a result of higher expectations of subscription customers; i.e., they choose narrower and more popular time windows.…”

Innovating agri-food business models after the Covid-19 pandemic: The impact of digital technologies on the value creation and value capture mechanisms

“…In addition to this, the use of sophisticated technologies such as robots and micro-fulfillment centers in stores optimize picking and inventory management in such an efficient way that physical stores become strategic points for quickly fulfilling orders placed online, sometimes devoting themselves entirely to this function, as in the case of “dark stores” ( Grewal et al, 2020 ; Kraak, 2020 ). The use of food retail stores for activating e-commerce BMs brings new value creation and capture mechanisms, including the reduction in time spent and information asymmetries for customers ( Güsken, 2018 ; Mason, 2019 ), the definition of new resources and activities to manage customer demand, transport, and fulfillment issues ( Hübner et al, 2019 ; Davies et al, 2019 ; Vazquez-Noguerol et al, 2021 ), and the development of subscription options ( Belavina et al, 2016 ; Wagner et al, 2021 ).…”

Case Article—The RealPro Customer Benefits Program: Rekindling Shopper Loyalty Through a Subscription Service

“…A large increase in online purchases of beauty products based on the membership in a subscription program is reported by Iyengar et al (2020). Wagner et al (2021) investigate the effect of subscription services in the context of online grocery retailing. They find that subscription customers spend more per month and place more purchase orders.…”