2017 Subscription Blog

THINKING OUT OF THE BOX: THE ALLURE AND MAGIC OF SUBSCRIPTION BOXES

Who doesn’t like arriving home and seeing a package at the front door? Even if it’s something you ordered and expected, it’s still exciting. Leading subscription box services such as Birchbox, Stitch Fix, and Blue Apron take this concept and run with it. They combine curiosity – what’s in the box? – with convenience and exclusivity. So, it’s not surprising that subscription boxes and services are leading the way in millennial and luxury markets.

EXPONENTIAL GROWTH

Visits to subscription box websites have grown more than 3,000% in the past three years, up from 722,000 visits in 2013 to 21.4 million in 2016. The number of subscription services has grown exponentially, too. Now, boxes contain anything from useful everyday products to purely entertaining trinkets. One service provides a new razor every month, while another packages up neat superhero gadgets. Products vary from healthy snacks, household items, makeup, clothing, accessories, books, underwear, to flowers, coffee, pencils, and games. In fact, this summer Hasbro is piloting its Gaming Crate at $49.99 per crate. Subscribers will receive four crates per year, and can choose to receive either adult-oriented boxes or one that’s geared towards families.

There are different types of subscription boxes, too. Some ship orders on a consistent basis with the same products each time (think Gillette on Demand – razor heads when you need them), acting as somewhat of a refill or the newest edition of a product (think, Sock of the Month Club, a different pair of funky socks every month). Alternatively, some subscriptions provide curated bundles of products selected specifically for an individual shopper. Companies like the Trunk Club or Stitch Fix compile clothing pieces in-line with a client’s fashion preferences.

All kinds of subscriptions share a common goal: they’re designed with a busy shopper in mind, taking the time, effort, and mindshare out of shopping. Cancel that trip to the mall or the convenience store for the refills. What’s simpler than opening a box that includes preselected content aligned with your taste and preferences? Or, what’s more enjoyable than getting a unique trinket that you didn’t know you wanted – until it was delivered?

Each of the top performing subscription box companies boasts aesthetically pleasing websites, marketing, and packaging. Each reinforces simplicity, exclusivity and, to a certain extent, intimacy – as in, we know you, we understand what you like, and we’ll send it to you when you want – or when you need more. And, given growth in the subscription box market – in five years the top 10 subscription-based startups in retail have raised over $543 million in venture capital – they seem to be onto something.

EXCLUSIVITY SELLS

With big brand names like Hasbro and Amazon getting in on the action, the subscription world is likely to have traction as a market opportunity. Trunk Club, for instance, boasts a ‘try before you buy’ idea. They ship a wide assortment of carefully selected clothing pieces for subscribers to sort through and choose what to keep. Of course, Trunk Club isn’t the only company innovating their approach. They are doing a few things to stand out – along with other market leaders:

  1. Greater packaging quality: With so many options for subscription boxes and each one with its own unique twist, brands must do something to stand out. Better packaging and designs, for instance, can increase brand recognition and loyalty.
  2. A focus on service: Not only do the best subscriptions have great products and packaging, but they also offer amazing service. If you call to ask a question or make a complaint, they are extremely happy to help and make sure you are satisfied. Many of the CEOs of these companies will respond to customer emails personally to ensure their customers are happy. This also ensures that they keep a finger on the customer pulse.
  3. Increased exclusivity: Giving loyal buyers discounts or access to exclusive items makes them feel special – and customers want to feel special. Special offers and member-only discounts also encourage customers to buy more.

Right now, subscription box services continue to innovate and improve, catering to what customers are asking for in the most effective ways possible. These self-gifted packages aren’t going away anytime soon, and more big players and smaller startups are likely to surface with new, gotta-have-it ideas.

 

https://www.inc.com/christina-desmarais/heres-data-showing-the-crazy-growth-of-subscription-box-services-infographic.html

http://www.deborahweinswig.com/wp-content/uploads/2015/05/FBIC-Global-Retail-Tech-Report-on-Subscription-Business-Model-May-13FINAL.pdf

http://www.cnbc.com/2017/06/19/hasbro-wants-to-deliver-board-games-to-your-doorstep-with-its-new-subscription-box.html

 

Leah Montgomery

Marketing Intern with PFS, Leah is interested in learning everything about corporate marketing. She hopes to delve into the world of professional marketing after graduating in May 2018.