ShopTalk: Is a subscription box plan the right fit for your business?



It seems like no product has been untouched by the convenience of subscription services. Gone are the days of making a special trek to the pharmacy for razor blades. They can now be shipped directly to consumers on a recurring basis, cutting both the expense and the inconvenience of running out of blades. Snacks no longer entail a last-minute trip to the convenience store or a vending machine. Well-balanced snack boxes can now be shipped directly to a home or an office to facilitate healthy food choices for consumers. Even dinner can be delivered in a regularly scheduled box with perfectly measured ingredients to help make meal preparation a breeze.

Product subscription box businesses also help brands expose their wares to entirely new audiences. There are boxes that deliver mystery or surprise items to consumers that are often selected based on personal preferences they provide through a questionnaire. Members get the surprise factor of opening a box with mystery items inside, and brands get to expose their products to people they might not otherwise reach. Given the breadth of options available, it’s easy to understand why product subscription boxes are so popular.

ShopTalk conducted a survey of 500 consumers to learn more about their interest and participation in product subscriptions. The survey results show that product subscriptions are resonating with consumers. In fact, 28% of survey respondents report being members of a product-based subscription service. And these subscriptions are very popular among younger consumers. In the survey, 55% of Millennials and 32% of Gen Xers report being members of a product-based subscription service. In addition, men are slightly more likely to belong to a product subscription at 29% versus 27% of women.

What’s so appealing about these product subscription boxes? The clear answer is that members view them as being fun. This is the most common reason why survey respondents sign up with a subscription box business, with 45% of members citing this as their primary reason for subscribing. Respondents also view subscriptions as a good way to save money and time – these were their second (43%) and third (38%) most popular reasons for joining, respectively. Here are some others:

  • Receiving a coupon/discount – 37%
  • Curiosity – 35%
  • It was a gift – 29%

With the huge variety of product subscriptions available, which ones are the most popular? Cosmetics and beauty/grooming products come in first place, with 11% of members surveyed receiving these types of boxes. Runners-up are snack boxes at 10% and clothing/apparel boxes at 8%.

The survey also shows that certain types of subscriptions have a longer shelf life than others. For example, wine subscriptions tend to last the longest at an average length of 1.5 years. Clothing/accessories subscriptions are a close second at 1.4 years and cosmetics/grooming subscriptions last the third longest at 1.3 years.

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But product subscriptions aren’t appealing to everyone. Survey respondents were vocal about why some types of subscriptions don’t appeal to them. Here are some specifics by category.

Clothing/accessories – shoppers want to try on items before they buy them

“I like trying things on and feeling them before I buy.” (Gen X)

Snacks/food – prefer to buy in-store

“I don't normally eat snacks, and if I do I get them at the grocery store.” (Retiree)

Meal kits – overall lack of interest

“I prepare my meals from recipes or from memory.” (Baby Boomer)

Finally, why do consumers end up cancelling their product subscriptions? Price tends to be the most compelling reason to cancel – 47% of survey respondents cite this as the reason for terminating a subscription. However, 56% of those who cancelled a subscription ended up replacing it with another.

Is a subscription box plan the right fit for your business?

Considering all of this momentum, the natural question is whether offering a product subscription box is the right fit for your business. So what should you consider before making the commitment? Here are three questions to contemplate.

1. Does it make sense for your business and your customers?

The answer to this question depends entirely on the way your business is constructed and what it sells. For example, if you sell lawnmowers, it probably isn’t a great fit. But if you’re dealing in lower-ticket items with lots of variety, it could give your customers just what they’re looking for.

Take a candy shop for instance. Customers might flock to its physical store to get the best handmade candies in town. There might be an opportunity to ship new treats and old favorites to customers on a regular basis (monthly, quarterly, etc.) to lock in recurring revenue and encourage brand loyalty.

A thorough analysis of your business, its products, and your customers might uncover some obvious (or hidden) opportunities for product subscription offerings.

2. Is your business equipped to manage the operational, inventory, and order fulfillment requirements of subscription boxes?

A successful product subscription box requires a great deal of time and attention. First, there’s dealing with the huge amount of inventory that gets shipped in the boxes. If all of your subscriptions ship on the same day, there needs to be adequate production time and storage space leading up to that date.

And the boxes don’t put themselves together. You’ll need adequate staff to construct the boxes, fill them, seal them, and prep them for delivery. Finally, there’s tracking all of those shipments from the time they leave your facility until they’re delivered – and dealing with any shipment snafus or declined payments along the way.

3. How will you stand out from your competition?

Now more than ever, it feels like there’s a product subscription for just about everything and everyone. A successful subscription box is going to require differentiation from the rest of the crowd. Perhaps it’s personalized content in the form of a note or a newsletter, or free samples. It could mean a partnership with another brand to cross-promote both of your products. Special promotions, deals, discounts, and coupons could be another way to set your subscription box apart from its competition.



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