The Ongoing Growth of Subscription Boxes

May 2018

Subscription businesses and boxes have become hugely popular in the past decade or so, offering a variant between online, high street shopping and traditional subscription services. These businesses work by consumers signing up to their services and receiving a package, usually once a month, that contains items they have picked out for you.

In the last few years, visits to subscription company websites have grown massively, by over 800% from 2014 to 2017 according to research. There are now thousands of subscription businesses in many industries catering for every taste, but what has made this model so popular?

Early Days of Subscription Boxes

Before the internet had properly entered the mainstream, there were already subscription businesses around. The majority of these were magazine subscriptions but newspapers did offer opportunities to join wine clubs, where members would pay and be sent a certain number and type of bottles of wine each week or month.

With the dawning of the internet and start-up boom, subscription boxes and businesses began branching out on their own. The likes of Graze developed from a small company posting out snack boxes to a huge company that now sells some of its items in shops. While many still include leaflets in newspapers and printed materials, most of the ordering and signing up by customers is now done online.   

The Increase in Variety

Successful ventures for subscription boxes offering food and other items aside from wine have resulted in a wide variety of monthly subscription businesses starting up. These now include everything from monthly beer boxes made up of a random assortment, to a fresh pair of funky socks, vegan snacks, art prints, candles and pretty much anything else you can imagine.

Such a wide choice of subscription boxes demonstrates how successful this business model has and continues to be. The market has become even bigger and within many of the subcategories there are now a lot of businesses competing (such as for monthly beer boxes). This has lead to levels of innovation being required, whether it’s including a free bottle opener or focusing on beers from a specific region, to help them stand out.    

Why are Subscription Boxes So Popular?

As many consumers move away from traditional retail, subscription boxes offer a fresh option. Customers need to be excited and receiving a package where they don’t exactly know what’s going to be inside does this, while being something they do want or need. Delivered to their door provides convenience while it also allows consumers to try out new products first, before investing more.

Subscription businesses also adopt a safer model, starting off by selling their products online which can give a good sense of the market and demand, before expanding into other areas. Graze have shown this by evolving from selling just subscription boxes to having an online shop and some products in high street stores. 

How to Start a Subscription Model

Starting your own subscription business can be a good idea if you have a new niche to work in or innovative way to take on existing competition. Once you’ve got your idea for a subscription box down, there are a few other things to consider:

  • Customers: Determine who they are to inform what will be in the box and your marketing strategy.
  • Competitors: Research as much as possible, even those in different niches, to see what works well and what doesn’t.
  • Price: It needs to cover your costs (box, products, shipping, wages etc.) and make a profit, while appealing to customers.
  • Marketing: Set up a website, social media and use channels like doordrop media and email to target your potential audience.
  • Shipping: Use affordable and reliable parcel delivery services to make sure all (especially your first month’s) boxes reach your customers on time and in good condition. 
  • Growth: If it’s a success, put in place plans to further grow your subscription business by offering different products and options.

With so many subscription boxes on the market, it’s an industry that looks set to go from strength to strength in the coming years.

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