The subscription retail craze

The subscription retail craze

It seems there’s a subscription service for everything these days. Just take a look at My Subscription Addiction. The site is full of companies that allow customers to shop through a subscription for everything from beauty product samples to high-end, celebrity-curated boxes and even a box of totally random items (see Fancy’s Mystery Box).

At first, I couldn’t help but think, “Have we REALLY become so driven by consumption that we will literally pay for a mystery box that could be filled with anything – whether it’s relevant to us or not?!”

But the more I thought about this business model, the more I could see how it could benefit both consumers and product manufacturers. I think consumers are buying into this business model because:

  1. They want to try new things. Take Birchbox for example. Each month, you have new sample-size beauty products to try based on your profile. This way, the consumer is introduced to and able to try new products without being committed to paying full price for the full size.
  2. They want to believe these companies have done the research for them. Conscious Box has this one figured out. Conscious Box assures its customers that all products included meet its standards for all natural ingredients and zero GMOs and that it supports sustainable, fair trade businesses.
  3. They just love surprises. I think it’s really as simple as that. If you’re crafty, you can get a surprise box of supplies and instructions for a DIY project each month. If you enjoy cooking, you can get surprise ingredients and recipes.

So what’s the benefit for product manufacturers? I imagine it’s a great way to test new products and collect reviews. Birchbox and Conscious Box provide points to users if they write a review on the product samples in their box, and those points can be cashed in for discounts toward full-size versions of the products.

This model is particularly appropriate for new green products. Most green product manufacturers are not well-known, established brands with a built-in buyer base. Green products also often carry a small (or large) premium, and we know that this is usually the biggest barrier to trial when green products are competing at-shelf with traditional products. This is a great low-risk way to encourage trial and (hopefully) facilitate product adoption.

What do you think about subscription retail services? Do you think this business model is just a fad or is it here to stay?



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Posted on

September 23, 2014

About the Author

Martha Wampler Behm

Martha is a former contributor to Shelton Insights.

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