The Surprising Truth about Subscription Boxes

Subscription boxes — like Birchbox and NatureBox — are a $5 billion business, with annual sales growing roughly 200%.

That may be only the beginning.

6% of Americans have signed up for a subscription box. An additional 38% are considering it. That number increases to 60% among trend-setting 18-35 year olds.

Subscription boxes tap into several growing consumer trends. They allow people to indulge in self-gifting. Create anticipation and surprise. Let consumers sample new products — an experience that is mostly missing from online shopping.

Americans expect to receive merchandise worth twice their monthly fee, at least partially because they don’t know if they will like the contents. This business model works for subscription companies because many brands are willing to provide free products, believing the boxes are great marketing tools.

Personal care products, food, and clothing are the most popular subscriptions. But, over 4000 services exist, offering everything from art projects to collectables.

Some experts believe the subscription trend has peaked. Others say that increasing web searches, more member sign ups, and consumers’ rising interest in boxes all indicate the category is in its infancy.

What are the implications for your business?

• Have you tested including samples of your product in others’ subscription boxes?
• Have you analyzed the pros/cons of creating your own subscription box service?

For help developing powerful digital strategies that work, compelling marketing strategies that drive results, strategic plans that deliver growth, or new products that consumers love, contact Brandology at 925-417-2253 or Maura@Brandology.com.

Sources: Forrester Research 2015, MCV 2015, Wired 2015