Subscription box businesses continue to succeed since the model experienced a 900% increase in growth from 2014 – 2018.
More than half of all online shoppers (54%) are enrolled in at least one subscription box service, according to new research by Clutch.
This article helps explain how subscription boxes work, why consumers embrace them, and how businesses can capitalize on them.
How Subscription Box Services Work
Three types of subscription boxes are popular with online shoppers:
- Curated
- Replenishment
- Exclusive access
Curated subscription boxes dominate the industry with 55% of all enrollments.
Curated subscription boxes ship a variety of products to members, usually on a monthly or quarterly basis. Members pay a flat-rate fee and agree to allow the company to select products for them so they can enjoy a collection of pre-selected items.
For example, Globein’s subscription box service curates a monthly collection of artisan products from fair trade craftspeople around the world.
Source: Globein
Some subscription services balance the element of surprise with personalization by providing members with product options or curating collections based on individual member surveys.
Replenishment subscription boxes send the same products to customers each month, allowing subscribers to tailor product selections and shipping frequency to fit their needs.
For example, Nike Adventure Club requires customers to select a new pair of shoes before each shipment. Other services, such as Dollar Shave Club, automate shipping the same products unless customers request a change.
Replenishment subscription boxes encourage customer loyalty and help brands develop a strong base of return customers.
Exclusive access subscriptions provide exclusive access to unique products or deep discounts to members.
For example, Fresh-Pressed Olive Oil club provides members with exclusive access to rare, imported olive oils that aren’t available in the U.S.
Beauty buyers club Beauty Pie delivers extreme savings on high-quality cosmetics and skincare products, allowing members to purchase luxury beauty products at 75% – 90% below retail prices.
Exclusive access subscriptions provide customers with a way to receive unique products while allowing businesses to build a highly-niched audience.
Why Subscription Boxes Appeal to Customers
Nearly all subscription boxes provide convenience, and curated boxes also deliver unique and novel experiences.
These three reasons – convenience, value, and novelty – drive consumer appeal for subscription box services.
1. Subscription Box Services Provide Convenience
Subscription boxes can save customers’ time and ensure that they don’t run out of essential items, creating a convenient alternative to in-store or online shopping.
For example, Grove Collaborative ships monthly boxes filled with environmentally-conscious cleaning and home supplies.
Source: Grove Collaborative
Grove subscriptions save customers the time it takes to shop for and order cleaning products while helping them to avoid running out of cleaning supplies for their homes.
One of the most popular subscription services, Ipsy, curates a monthly “Glam Bag Plus” beauty subscription box. Ipsy is the 2nd most popular subscription box brand according to Clutch’s survey.
Ipsy provides a highly-personalized experience by selecting products tailored to members’ skin type and color. The service saves its members time by researching new brands and products for them and making decisions about which items they should try each month.
Subscription boxes make shopping more convenient and free up time for people to enjoy on more valuable activities such as spending time with family and friends.
2. Subscription Box Services Deliver Value
Subscription boxes also provide customers with the benefits of economies of scale. Many subscription boxes allow members to enjoy products they might otherwise never experience, while also providing significant product discounts.
For example, the NewBeauty TestTube subscription box provides members with hundreds of dollars in savings every shipment. A typical box delivers over $200 of beauty care products for a flat-rate fee of $30, giving subscribers the opportunity to test products they might otherwise never experience.
Successfully-curated subscription boxes provide clear and unquestionable value to subscribers.
3. Subscription Box Services Create Novel Experiences
Curated subscription boxes deliver human experiences that can be fun, exciting, and motivating.
Opening a box of surprises and experimenting with new products adds an element of fun that can activate the “novelty-seeking” section of the brain, which motivates people to keep learning, working, and succeeding in life.
A Beauty Pie member explains on the service’s website, “Joining BEAUTY PIE is like being Charlie when he first enters the chocolate factory. It’s hard to believe your eyes, but it is all true and all available to you.”
Many subscription box services also cultivate social media communities where members share tips, questions, and support about the service or its focus.
These niche communities contribute to novel experiences while adding a human connection to the online shopping experience.
How Businesses Can Capitalize on the Subscription Box Trend
Thanks to review and spoiler sites such as Hello Subscription and YouTube unboxings, subscription boxes present several marketing opportunities for brands. These include
- Promoting products
- Generating inbound links
- Increasing website traffic
If you’re considering launching a subscription box service, e-commerce platforms such as Cratejoy and Subby provide tools and resources that can help you get started.
Souce: Cratejoy
Businesses worried about the effort needed to package and ship products on a regular cadence can seek out the help of logistics consultants to figure out what process works best.
The subscription box business model works for a wide variety of popular and niche e-commerce products. Personalizing the experience to the desires of your target audience is an essential element of subscription box services.
Subscription Box Services Offer Several Marketing Advantages
The subscription box business model provides a way for brands to add additional customer benefits, such as convenience, value, and novel experiences, onto a variety of product lines.
The growing subscription box industry also provides an opportunity for other businesses to gain visibility for their products, earn positive impressions, and grow their customer base.
