Big Brands Jump On Subscription Boxes

Subscription boxes have gone mainstream. They are certainly attracting average consumers. More important, some large, traditional brands have launched boxes, and more are rumored to be in the works.

Should your brand get involved? Here’s what you need to know to become an instant expert in subscription commerce.

• 10% of Americans currently receive a subscription box. 5% of the population subscribes to three or more.
• Consumers love to receive monthly boxes because they evoke a sense of discovery, are a little indulgent, and can be personalized.
• Beauty products make up 40% of the market.
• Big brands that have already jumped into subscription commerce include Wal-Mart, Adidas, Sephora and Starbucks.
• Mainstream brands have built-in advantages when they launch boxes. First, consumers like receiving branded products because they believe they are more valuable. Second, well-known brands have lower consumer acquisition costs so they can scale faster than start-ups.
• Subscribers are very fickle. 61% of those who have ever tried a service have cancelled it.
• Top reasons for cancelling are cost, unappealing products, boredom, and switching to a competitor.
• The secret to successful subscription commerce is making each box surprising and exciting, plus offering consumers a great value—defined as contents worth double the monthly fee.

Sources: AMMO2 2016, Fast Company 2015, MGI Research 2016, UPS 2016