Top Five Reasons to Love The Subscription Box Business

The retail industry has seen reinvigoration through a new form of shopping.  Over the last 5 years, the popularity of subscription box services has become a new way of discovering products as well as brands. The subscription box experience offers exciting, easy and relatively affordable options for food and apparel with new category expansions each month -- it has become a $1 billion+ industry.

So, what’s to love?

1. The innovation. 

The idea behind the subscription box itself is a curation of items that would appeal to a particular consumer persona. The curation of the items for the box itself is a highly creative process.  Starting with an inspirational persona based on the theme of the box, each month a story needs to be crafted and told through the items in the box that will not only excite that subscriber but be useful. Because the new subscription box delivers each month, there is the flexibility to curate a wide variety of items and seeing what rises to the top. The psychographic of the subscription box subscriber is someone who is statistically adventurous and appreciates first-to-market options. This allows companies a testing ground for items that are more edgy, new and/or just different - sometimes even original design.  The more the box meets its promise, the better the retention rate as well as referral rate (word of mouth) resulting in new subscribers.

Additionally, the popularity of a particular new item can even spark ideas for new boxes altogether.   While the first subscription models for monthly boxes may have started with clothing and makeup, now subscription boxes reach niche categories, like dog treats, romance novels, cat owners and stationery! In fact, according to a McKinsey study, subscription boxes experienced an explosive growth rate between 2011 and 2016, averaging around 100% annually due to the passion triggered niche approach.

2. They literally make you feel good.

Unpacking a subscription box is like Christmas morning. Research and brain studies suggest that the act of unboxing sends signals to the brain feelings of joy, reward and satisfaction. To be more specific, it affects a deep center of the brain, known as the substantia nigra and ventral tegmental area (aka the part that makes you feel good).

Those feelings of joy and surprise are addicting and align perfectly with a monthly experience. Sometimes it’s not even about what is in the box, but the overall experience of it.  The anticipation of receiving the box, the experience of discovery, the ‘trying on’ or trial use of the items and the sharing (or display) of the items with (to) others all play into this psychology.  This can even be seen with the Amazon effect with the some of the most mundane household items that have now become ‘fun’ to shop for due to the promise of the unboxing experience.

3. Resurgence of Brands.

As they say, everything comes back in style. Taking an older brand and now pairing it with items to create an ‘experience’ allow a brand to reintroduce itself to consumers through a more relevant channel.  Brands can find ways to reinvigorate their classic styles through unboxing, creating new loyal followers and users. Think of it like the Netflix library-- a treasure trove of content that can be discovered by a new audience. But instead of West Wing, it is a timeless cable knit sweater with 4 other fun accessories.

4. Community building.

People like to share. Subscribers are united by the curated products that they discover in their box; each item has the potential for a new story. And they want to share those stories with friends, online and on social media. Comments alone can build a community, but it is more than that. Some subscribers not only post about their box, but talk about their experience, using them to spark conversation among other users and creates a bridge of communication and unity.

5. Manufacturing for a known audience.

Over the last decade, apparel manufacturing has changed dramatically. With the rise of “fast fashion” and the circular economy, sourcing and manufacturing has had to quickly evolve. And with that rapid evolution, manufacturers don’t always know what will work with their customers forcing a brand to stay in its brand lane.

One major benefit for the industry, is that subscription boxes (run online), are informed by data. From the beginning of the lifecycle stakeholders know how much to produce, the success of certain styles and what new items may appeal to their customer base to expand and enhance sales. This leads to more efficiency and reduced waste throughout the manufacturing process, which is a bonus for all - consumers, manufacturers, retailers, brands, etc.

Industry expert, co-founder of The Vertical Collective, Katherine Zabloudil shares, “We have seen a substantial change in our overall business-- a shift towards servicing subscription box companies including curation, sourcing and manufacturing. The market is booming.” She continues, “We have helped some of our traditional apparel clients start subscription boxes to help expand their business model, reaching new audiences.”   

So, what’s not to love about the subscription box business?