Why Subscription Box Companies Are Booming Feb 22 2017
The subscription box business has taken the internet by storm. You can find a monthly subscription to just about anything. Want a customized date night in? Looking for a way to make shaving fun? You can find monthly boxes for dog treats, plants, children’s books, and healthy snacks. The list could go on.
There has been a steady rise in these companies the last few years and still consumers can’t get enough.
How did it start?
In 2010, two Harvard Business School grads, Katia Beauchamp and Hayley Barna started their now wildly successful company BirchBox. Driven by a desire to help guide consumers through a cluttered market, they started offering a $10 box of beauty products shipped right to their customer’s doorstep. BirchBox now has over a million subscribers and 300 employees.
The success of the company has since spurred on thousands of entrepreneurs to follow suit offering their customers an opportunity to receive products or experiences they would have a hard time finding on their own.
Now you can find e-commerce platforms like Cratejoy, Lemonstand and Subbly, who help thousands of members manage their subscription businesses. Cratejoy’s website boasts 30,000 customers visit their marketplace every day.
Even though subscription box sites are considered a niche market, recent studies show these online retailers have grown nearly 3,000% in the past three years. That’s a lot of boxes packed up and shipped out.
So why do people like subscription services so much?
People love receiving a surprise. The subscription box is all about bringing back an element of discovery and surprise. It is like receiving a care package. And most customers are comfortable spending a little money on a recurring basis for the excitement of getting something new in the mail.
We all know life gets busy. A subscription offers a way around the tedious work of finding a new product. It essentially does the work of the buyer, which is one of the greatest values you can offer.
In a time where most people have the Amazon mind set (I know what I want, and I need it here fast), they are less likely to discover new things they may like. Subscription companies are the perfect complement to this. (I want to try something new, but I don’t have time to find it.)
Avoid sensory overload
The owners of these companies are most often focusing in on one type of product or one type of experience. They have the chance to curate interesting and useful products their customers could not find on their own. BirchBox owners, Beauchamp and Barna knew that women didn’t want to dig around in the beauty product isles, and voila, a business was born.
As the trend continues, we see subscription businesses are not going away anytime soon. They’ve got us hooked.
Perhaps my favorite aspect of this is e-commerce model is that it allows small businesses to thrive. In this article, the founder of Cratejoy Amir Elaguizy is quoted:
“It allows people who could not otherwise run a business the opportunity to do so. That’s the real story when it comes to subscriptions; it’s not all about the Birchboxes of the world. Nobody can take that business from them as long as they keep their subscribers happy every month. Amazon can’t reach in and compete for those subscribers.”
Want to make your subscription business stand out? Visit CompanyBox to learn how.