Subscription Boxes: A New Type of Online Shopping

Who doesn’t like a monthly surprise delivered to their door?

Online shopping is continuously getting more advanced, with faster deliveries (Amazon’s drones), easier price comparisons between retailers, and coupons being directly emailed to you on a daily basis. So, what is the latest trend in online shopping? Subscription boxes. Consumers subscribe to receive a box every month filled with a variety of products. Choices range from beauty boxes, to health food products, to cookie boxes, or even subscription boxes for your dog!

 

An Effortless Surprise

For most subscription boxes, consumers complete a user profile, and then customized boxes are sent to their door every month. The customer does not choose the products; they just receive a surprise every month directly to their doorstep, without lifting a finger.

 

These boxes can range from $10 – $100+ a month. There are entire blogs dedicated to reviewing the different subscription boxes, such as mysubscriptionaddiction.com. And there are countless websites reviewing and ranking the different types of subscription box services.

YouTube’s Role 

A particularly influential digital medium for subscription boxes so far, has been YouTube. YouTube personas often feature videos where they unbox and review a particular subscription box. For certain channels, the YouTuber will have received the box as a gift from the company, so that they may review the box and give their subscribers a coupon code for the subscription box service at the end of the video.

 

And this medium has proven to be highly effective for the subscription box industry. A search for “subscription boxes” on YouTube yielded “182,000” videos (YouTube, 2014). And the comments on these videos prove how effective this marketing initiative is – viewers feel that the can trust the YouTuber, and feel comforted in visually seeing what to expect from the subscription.

The Industry

In a Forbes article, Marianne Hayes credits subscription box company Birchbox as “put[ting] the subscription box retail trend into motion with its 2010 launch.” (Hayes, 2014.) Birchbox currently has over 800,000 subscribers, which translates into annual sales reaching $96 million (Hayes, 2014). This industry is growing quickly, and can be adopted by most forms of retailers whether it is health food, pet products, beauty products, clothing, shoes or more.

Why does it work so well?

This form of online shopping offers many benefits that appeal to consumers. Firstly, once a month, a box full of surprises arrives at your doorstep. For most consumers, this is seen as exciting and a way of discovering new products that the individual had never heard of.

An article in the Wall Street Journal, entitled “New Ways to Give Yourself a Gift Every Month” states that another important factor is “The perception of value is another part of the equation. The subscription services make sure the boxes are priced well below what the individual contents would cost if purchased separately. The subscription should cost 70% or less of the price of the items sold separately.” (Binkley, 2013.) These subscription box companies are able to purchase the products at discounted prices because they buy them in bulk amounts, and offer the merchandiser the opportunity to introduce their product to a new and large consumer audience directly.

When the subscription box arrives at the consumer’s doorstep, anticipation and excitement take over. Even if the consumer consistently receives one or two products in the box every month that they don’t like or don’t use, they are unlikely to focus on this fact. Instead, they remember all the new products they’ve discovered and loved, and continue to see the service as a worthwhile investment.

 

Actress Kate Hudson chose to use this method to launch her new fitness fashion line. Target has begun to offer its consumers a 5% discount if they sign up for their subscription boxes. The popularity of this industry is growing, and it is highly likely that this new form of online shopping will continue to grow and succeed at an exponential rate.

References

Binkley, Christina. (2013, December 18.) New Ways to GiveYourself a Gift Every Month. The Wall Street Journal.

Retrieved October 30, 2014 from http://online.wsj.com/articles/SB100014240527023039495045792646828515

60234

Bury, Erin. (2014, February 3.) Need Recurring Revenue? Think Subscription Boxes. Financial Post. Retrieved October

30, 2014 from http://business.financialpost.com/2014/02/03/need-recurring-revenue-think-subscription-boxes/?

__lsa=a26a-056f

Fabletics. (2014.) Fabletics. Retrieved October 30, 2014 from http://www.fabletics.com/

Hayes, Marianne. (2014, May 16.) Subscription Boxes: Are They Worth the Money? Forbes Magazine. Retrieved October

30, 2014 from http://www.forbes.com/sites/learnvest/2014/05/16/subscription-boxes-are-they-worth-the-

money/

Mysubscriptionaddiction. (2014.) Mysubscriptionaddiction. Retrieved October 30, 2014, from http://www.mysubscriptio

naddiction.com/

SubscriptionBoxes. (2014.) Subscriptionboxes. Retrieved October 30, 2014, from http://www.subscriptionboxes.com/

YouTube. (2014.) Subscription Boxes. Retrieved October 30, 2014 from http://www.youtube.com/results?search_query

=subscription+box