What’s Ahead for the Subscription Box Service?

13 Mar

Are subscription boxes a fad or sustainable business model? According to Jameson Morris, a specialist in the field: “A subscription box is a recurring, physical delivery of niche-oriented products packaged as an experience and designed to offer additional value on top of the actual retail products contained in a box.”

Morrison further notes that to be considered a subscription box service, these elements are needed: 

“Must be a physical delivery (digital subscriptions can’t be classified as a subscription box). 

Must be a recurring subscription/membership (of any term or frequency). 

Must feature one or more of the following value propositions:

Surprise (at least 1 or more items in the box must be unknown to the customer before delivery). Discovery (slightly different than ‘Surprise’. Discovery-oriented subscriptions don’t have to have ‘mystery’ items, it’s more about consumers ‘discovering’ items they’ve never seen before).

Curation (a thoughtfully picked variety of products related to a specific niche or category). 

Savings (a clear savings on the price paid for the box versus the total retail value of the items inside). 

Thoughtful Presentation (From custom packaging to the way products are arranged inside the box). 

Convenience (convenience cannot be implied solely by the fact that it’s a recurring ‘auto-delivery’. Rather, think of the fresh ingredient subscription boxes like Blue Apron or Green Chef–they deliver convenience in the form of pre-prepared ingredients and recipes).”

 

According to eMarketer:

“A March survey from AYTM Market Research of 1,000 US consumers showed that while a little over half of respondents said they have used at least one subscription service, almost two-fifths who had used one said they had canceled.”

“’To stay the distance, brands using a subscription model need a very strong point of difference and superior customer service,’ said Sarah Boumphrey, global lead of economies and consumers at Euromonitor International. She added that subscription services also need to come up with other avenues of revenue. For instance, Birchbox, a leader in the space, has brick-and-mortar stores.”

“Differentiation will be even more crucial, as there are signs that suggest the industry’s growth is slowing. Traffic to subscription service sites in January rose 18%, according to Hitwise. Though that’s healthy growth, it’s well off the 56% gain registered a year earlier.”

 
Click the image to read more.


 

2 Responses to “What’s Ahead for the Subscription Box Service?”

  1. Nitsan Ayali March 27, 2017 at 10:14 pm #

    I find the concept of subscription boxes quite interesting. However, it seems that in certain product categories it is entirely oversaturated-specifically in the clothing/beauty sector. The food subscription box companies in most cases seem to differentiate themselves. For instance there are different types- organic, vegan, paleo, etc. I personally wonder how sustainable and scalable these types of businesses are.

Trackbacks/Pingbacks

  1. What’s Ahead for the Subscription Box Ser... - March 13, 2017

    […] What’s Ahead for the Subscription Box Service?  […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: