The Unboxing Effect Part 2: Taking “WOW” to the “Ah-Ha” Level

 In Ecommerce, Spotlight

What do you get in the mail every day?

If you’re like most people, the answer is mundane: some junk flyers, bills, the occasional catalog you never open.

When you look at it like this, mail is a decidedly uninspired experience. Unless, that is, you’ve hopped on the subscription box train.

In recent years, companies that offer subscription boxes (boxes packed with goodies and delivered to consumer doorsteps monthly) have skyrocketed in popularity.

And this makes sense – there’s something incredibly gratifying about finding a package on your doorstep, and something so exciting about wondering what might be inside of it. The experience feels a bit like a special occasion, and it’s part of the reason people have begun to flock to these subscription services in droves.

In our post, The Unboxing Effect: Creating the “Wow Factor, which we published last year, we broke down how you can jump into the subscription box market and use it to grow your business. Now, we’re back by popular demand, with even more information on how to use this ecommerce phenomenon to your benefit.

Let’s dive in!

A 2018 Overview of Subscription Box Services

Wondering how popular subscription boxes have become or why they’re such trendsetters? Here are some facts and figures to chew on:

  • 15% of all online shoppers have subscribed to an e-commerce service within the last year.
  • Women make up 60% of these subscriptions, but men are more likely to have at least three active subscriptions.
  • 55% of subscriptions are curation-based, which makes them the most dominant category of 2018’s subscription economy.
  • In 2016, there were more than 2,000 subscription box services in the U.S.
  • Visits to subscription box websites grew by more than 3,000% between 2013 and 2016 – up from about 722,000 visits in 2013 to a whopping 21.4 million in 2016.
  • Stitch Fix, an online subscription box service that sends personally-styled clothing to your doorstep, has grown its customer base nearly 10x in recent years and has a repeat rate of 86%.
  • In April, 2017, subscription box websites were boasting about 37 million visitors, an 800% increase since 2014.

Why Subscription Boxes are so Popular

Now that you know how popular subscription boxes are let’s delve into the why. Why do they work? Why do people love them? Why are they growing at such a rapid rate?

Here are a few of the top reasons:

Healthy Profit Margins

Subscription boxes offer more robust profit margins for companies. Thanks to their more predictable inventory, they promote reduced spending and increased customer retention.

Simplicity

According to data collected by Hitwise, subscription box customers overindex for the following demographics:

  • College degree
  • Liberal politics
  • Female
  • Household income of more than $100K annually
  • Children ages 3-5

These consumers, as you can imagine, are busy and discerning. They don’t always have time to shop, or aren’t pleased with the quality of materials they find in-stores.

As such, they turn to subscription box services as a simple, time-saving method to discover new products and get the items they love.

Excitement

In the “I deserve it” age of ecommerce, subscription boxes represent something purely positive for consumers. Unlike the rest of the mail that lands in the slot or the box, subscription boxes are purely fun – a little bit like receiving a handwritten letter from a loved one.

By driving excitement and anticipation, subscription box services have no problem keeping their subscriber numbers high, and their retention rate even higher.

There are two primary types of subscription commerce: automatic reordering and ecommerce subscription boxes. Here are a few of the top-performing subscription services in the ecommerce world:

No. 1: Hunt a Killer

For the more macabre among us, there is Hunt a Killer. A real-life murder mystery in a box, Hunt a Killer has more than 17,500 monthly subscribers.

Developed by a team of mystery-thriller writers, Hunt a Killer is proud to take its subscribers into the minds of serial killers and promote thrills so lifelike they feel real.

The boxes cost about $30 per month and build up gradually to the successful identification of murders in fictional, decades-old stories.

No. 2: Birchbox

Birchbox is a viral subscription box that sends beauty or grooming supplies right to your door. One of the more inexpensive subscription services (boxes start at just $10 a month), this service promotes exploration and the discovery of new products by offering sample-sized containers from B2C brands and companies.

When customers discover a product they love, they can head to the Birchbox website and buy full-sized containers at a slight discount.

The model has been incredibly successful. By 2014, Birchbox was pulling in $96 million in annual sales – with 30% of that revenue coming from those full-sized products. Today, the site ranks as one of the most popular subscription box services.

No. 3: FabFitFun

FabFitFun is a quarterly subscription box that allows members to customize the items and add-ons they want in their box. The service also includes a membership to FabFitFunTV, which enables on-the-go workouts, and access to members-only sales.

In recent years, this subscription service has partnered with major social media influencers, including Lauren Conrad and Kendall Rae, who says, of the box, “This is the best subscription box I’ve ever gotten in the history of all my subscription boxes. You guys win!”

To date, the company has earned more than $40 million in revenue.

NO. 4: BlueApron

BlueApron is one of the many subscription boxes that provides chef-curated ingredients and full meals (with recipes), delivered right to subscriber doors. Available in 2-person, family, and wine plans, Blue Apron has quickly exploded to become one of the most popular subscription services out there.

Prices for this viral service start at about $8.99/serving, and the entire package is entirely commitment-free.

No 5: Stitch Fix

Stitch Fix is one of the most popular “style boxes” on the market. Subscribers receive a box of curated clothing pieces on a customizable schedule. Everything is returnable, and subscribers only pay a small styling fee, which comes out of the price of any purchased items.

Amazon’s Place in the Market

Amazon has entered the subscription market with its Subscribe & Save program. Meant for customers who purchase things like supplements, canned goods, and cat food on the website, the Subscribe & Save program facilitates savings of up to 15% on household staples.

Breaking into the Subscription Model

If you’re interested in using the subscription model to enhance your ecommerce dealings, you could be on to something. Lucrative, customizable, and highly in-demand among customers, the subscription box service represents the future of marketing for many brands.

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