Curation and Consumables: Two Keys to Growth in the Subscription Box Market

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SubscriptionBoxes_Blog_r1v2.pngFor consumers, one of the most popular subscription type is the subscription box—that curated collection of goodies that subscribers receive on a regular basis (often monthly, but not always) which the box purveyor hopes will delight and surprise its recipient. Beauty boxes such as Birchbox were an early success story, along with BarkBox for dog owners, and Loot Crate which provides “epic collectibles” and seeks to “unite and inspire the world through the shared celebration of fandom.”

Of course, the subscription box market has seen its trends, with various categories of boxes waxing and waning in popularity from one quarter or year to the next. Some boxes however are perennial favorites, with fans who are so devoted, they create “unboxing videos” that they upload to sites like YouTube so that others can see what’s in that month’s box and the recipient can provide their own commentary on each item’s appeal.

The other type of box provides consumables is less about curation and the element of surprise and delight. Instead, the consumables category focuses on the automatic delivery of needed supplies such as razors (and their contrast, beard grooming supplies), diapers, household goods, and more.

Subscription Insider, for one, is very bullish about subscription boxes, stating that they’re the fastest growing sector within subscription commerce, with many subscription box offerings growing their subscriber base at “unprecedented rates.” The article, “What You Can Learn From the Subscription Box Industry” outlines a number of key strategies that subscription box companies can pursue to increase their subscriber rate and revenue, with advice from industry heavy-hitters, such as Leslie Emmons Burthey, the VP of marketing at FabFitFun.

eMarketer provided data points from a survey earlier this year by AYTM Market Research which asked consumers about their experience with subscription boxes, the types of boxes they prefered, their plans to purchase them in the future, and what were the drivers of that decision. And while eMarketer in its article acknowledges that some product category boxes may be reaching a saturation, newcomers continue to enter and find success in the market.  

The eMarketer article also notes the following:

“‘To stay the distance, brands using a subscription model need a very strong point of difference and superior customer service,’ said Sarah Boumphrey, global lead of economies and consumers at Euromonitor International. She added that subscription services also need to come up with other avenues of revenue. For instance, Birchbox, a leader in the space, has brick-and-mortar stores.”

Yes, just as some brick-and-mortar stores are launching their own subscription services (Walmart, Target, and Restoration Hardware are a couple of examples), Birchbox is an example of a subscription service expanding its reach through a brick-and-mortar presence. After the success of its first store, opened in the SoHo neighborhood of New York City in 2014, and a number of pop-up stores in the U.S. and Europe, Birchbox recently announced the opening of a second store in Paris, further solidifying this growth strategy. The company notes that shoppers at its NYC store have a 3x higher lifetime value with the brand.

To remain competitive, subscription boxes also need a robust, flexible, and scalable subscription commerce platform. To learn more about how Recurly can support your subscription box business, give us a call at (844) 732-8759 or sign up for a demo here.

 

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