From Birchbox to Dollar Shave Club to HelloFresh, some of the most successful e-commerce businesses specialize in subscription boxes. For a monthly subscription fee, these services deliver a box to a member’s front porch, offering the convenience of top products without having to leave home.
In recent years, subscription boxes have become more popular than ever, racking up more than 21 million visits to subscription box websites in January of this year alone. This is a notable boost from three years ago when similar sites reported only 722,000 visits. But not every online retailer has a business model that fits the format. By understanding how different sites are using the subscription box model, entrepreneurs can determine whether this type of service is a fit for them.
One of the key qualifications for a monthly subscription service is that it should be something that a consumer can deplete within a short period of time. Both Birchbox and Dollar Shave Club, the top two subscription-based e-commerce businesses, specialize in consumable products. Birchbox’s customers receive a box full of beauty product samples each month. They can sample a variety of designer products that they may have been reluctant to buy otherwise. Dollar Shave Club sends new razor blades to members each month, along with any add-on grooming products they choose.
With each year, it seems the interest in healthy, natural products grows and brands like Bestowed cater to that demand. Green Kid Crafts connects with parents who are concerned with the environmental friendliness of the products their children use. Whatever niche a business chooses, it should be one with high customer demand.
There are a few things that will always lead consumers to open their wallets, and when a business caters to those, it can win regardless of the economy. Bark Box helps pet owners do what they enjoy most: spoil their dogs. One thing that makes Bark Box so successful is that busy consumers may not have the time to go to the pet store as often as they’d like. By having a surprise box arrive each month, they’re able to offer their pets a monthly gift.
Fashion clothing, shoe, and accessories brands are getting in on the subscription craze, creating a custom shopping experience for their users that tends to start with a list of questions designed to determine a shopper’s personal style profile. Stitch Fix is one of those companies, sending subscribers a box each month that has outfits specifically chosen by a professional stylist. For shoe enthusiasts, Shoe Dazzle delivers monthly personalized shoe selections to members by email. They choose the one they want and the item ships. Businesses get special deals on the fashion items they offer, and consumers can fill their wardrobes with designer fashions.
Subscription boxes are a great way to build recurring revenue for an e-commerce business. However, to make this business model successful, retailers must offer products customers want on a regular basis at prices they can afford. For brands that sell a wide variety of products or sell items that aren’t in high demand, a subscription model may not be the best option.