Making the Retailers' Case for Subscription Boxes

Mar 16, 2016 — Rachel Liste
The strategy behind subscription boxes for retailers

I thought I would take a break from blogging about my favorite topic of payments and share with you a bit about my other love… subscription boxes.

A couple years ago I subscribed to my first subscription box, Birchbox, where I received 4-5 beauty samples a month for the price of $10 each. I was in love! As a product junkie, there was nothing better than racing home to find my subscription box waiting for me, begging for me to tear into it and see what surprises would be waiting for me. Was it a new miracle eye cream to make me appear like I got the prescribed eight hours of sleep the night before? Or maybe it was the new nail polish that promises to change color with my mood? Whatever was wrapped in that box was selected just for me, for my complexion, and would possibly change my beauty routine forever!

As my addiction set in, I soon discovered everyone in my family could have the feeling of subscription box joy, right down to the dog. I immediately signed the family up for Bluum, BarkBox, and Harry’s subscription boxes which are geared toward moms, dogs, and a hairy dad. As with most addictions, I soon craved more. Today, I’ve upgraded my subscription to FabFitFun which delivers more product variety and fuller sized samples. It comes quarterly and the box costs $49.99 a quarter, which can easily be justified upon opening your first box where the value of the products are around $200-$300 retail. 

How do subscription boxes make sense for retailers?

  • Traditional Marketing is Boring - Ask your customers, would they rather watch a 30-second spot on your products or test drive it for themselves? We both know the answer - especially if your target market happens to be millennials. Subscription boxes are fun and exciting in a world where traditional advertising is just becoming too easy to ignore. Furthermore, don't underestimate the powerful world of mouth that can be generated from this type of strategy. 

  • Frequent New Products - If you're a retailer who is constantly adding new SKUs it can be tough for even your most loyal followers to keep up with items they'll love. Subscription boxes allow your customers to preview those new products and test out which ones they want to start purchasing regularly. 

  • Drive In-Store Sales - Subscription boxes offer an excellent hybrid for those getting more and more used to online shopping but still prefer to make most of their purchases in-store. For these shoppers, getting samples delivered to them at home provides an opportunity for them to touch, feel and try out different products that make it easier to know what they want to purchase when they visit the store. 

  • Brands - You don't have to start your own subscription box service to reap the benefits. For brands, simply getting your product included in a popular subscription box can boost your sales. Nothing beats getting a sample of your product directly in the hands of someone already interested in your retail category (i.e. make up). 

  • Valuable Feedback - Building a loyal following via your subscription box creates a direct relationship with your customer that allows them to share their thoughts and feelings with you each time they receive a new bundle of products. 
Subscription boxes aren't for every customer and they aren't for every retailer, but it's definitely an interesting trend to watch. 

     

Topics: Retail Operations, Wireless Trends

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