Unbox the Magic: Making Subscription Boxes Work for You
Retailers must think outside the box … and boxes may be the solution.
We’re now in an on-demand culture. People are used to taste-testing, and to brands approaching them in new and innovative ways.
Subscription boxes are an unexpectedly versatile solution. Who can deny the success of Birchbox? Subscription boxes aren't just for cosmetic brands. Everyday consumables and high-end brands can box, too, including Dollar Shave Club, which sends razors out monthly, or MM.LaFleur, whose “bento boxes” serve businesswomen without time to shop.
Boxes serve people by letting them test products effortlessly, and absolving them from forgetting to buy basics.
For a consumables brand, the latter is gold. People usually discover they’re out of an easily replenished product at the last minute, and head to the nearest store, even if they’re loyal to another retailer. If they like it better, you’ve lost them.
Subscriptions also yield recurring revenue and retention. Once someone’s on a box for diapers or razors, they’re unlikely to stop, barring a service interruption or negative experience. This enables brands to plan stock and improve forecasting.
In essence, boxes respond to a retailer’s most cherished dream: they ensure that customers continue purchasing, and keep them from thinking about buying from competitors.
For specialized products, like luxury or premium goods, a subscription box yields customization and discovery.
Retailers using this approach typically ask users to build personal profiles with simple questions, from body type to favorite color. While people hate clicking too much before getting what they want, custom profiles can be fun and are the exception to the rule. Instead of irritating (provided it isn’t too long), it gamifies the experience. Often, people fill them out just for pleasure, giving retailers valuable data anyway. The key is to make them relevant to the customer and what they're purchasing.
A “discovery” box is filled with things that cater to the customer, like a personal shopper. Birchbox may ask for skin tone to supply the perfect foundation, while including irresistible “surprises.” A good discovery box contains 50 percent user-specific items, and 50 percent surprises.
Boxes are also flexible. Build loyalty by creating opportunities to give back (“good models”). Stitch Fix, which sends curated boxes of clothes, once sent clients Goodwill boxes with free shipping labels, rewarding consumption with a sustainable way to cycle old clothes out.
Thus, there are many advantages to subscription boxes:
- They increase purchasing frequency to maximize customer lifetime value.
- They make it easy for customers to care for themselves. People stick around for better service. Sometimes that’s as simple as letting them log in and update preferences for their next delivery vs. making a call. This doesn’t just make your life easier; it’s preferred by users who feel more in control.
- It provides a regular touchpoint. You send something regularly, so you control that experience and can plan for it.
- It’s a stable discovery window. Brands often have trouble getting customers to try new things. You can ensure they do with a “surprise” in a future box.
- It offers an opportunity for customers to provide feedback on those surprise products.
- It limits the likelihood a customer will shop elsewhere. Customers will stay as long as something is in stock and delivered on time. However, once they go elsewhere and like it better (or just as much), they’ll switch with impunity.
- It lifts margins through better supply forecasting. Retailers need space to hold stock. Subscriptions ensure you know how much will be consumed, allowing you to buy more confidently in larger quantities, maximizing deliveries.
In short, boxes pay for themselves by making people happier and giving you a stable revenue stream. What are you waiting for? Unbox the magic!
Steve Roberts is the vice president of retail, EMEA, for MPP Global, an integrated cloud platform to identify, engage and monetize digital audiences.