Today, more and more people are on a quest to find an answer to the question “What is a subscription box?” We don’t blame them. Nowadays, the contents of our mailbox are more likely to depress us than bring us joy.

Bills and junk mail have replaced letters and greeting cards from our loved ones. Consequently, one way to answer “What is a subscription box?” is this: a solution to the empty mailbox phenomenon.

What Is a Subscription Box?

Answering the question “What is a subscription box?” is harder than it seems at first glance.

The term “subscription box” is not so much a business model as a consumer retail concept, and one with many different spins to it. However, that doesn’t mean that the question “What is a subscription box?” is unanswerable.

Subscription Boxes 101

At a basic level, the answer to “What is a subscription box?” is this: a repeated, physical delivery of a product or several products.

To put it another way, subscription boxes are a new way to sell existing products.

Instead of changing what consumers want, subscription box companies persuade consumers to look at existing products in a new light.

The value of a subscription box is much more than just the retail items in the box though.

You see, it’s no longer enough to give customers what they want. You have to get them excited. One way to do that is by providing them with an experience in the form of a subscription box.

Because canceling a subscription is generally very simple, companies have to provide value or inspire customers to succeed.

Most of us think of subscription boxes as a recent invention. However, that couldn’t be further from the truth. Sure, the internet might have helped the subscription box market to explode.

But the first subscription box was invented almost a century ago.

What do books have to do with it?

Behind every great business, there is a man with a vision. In this case, that man was Harry Scherman, a Montreal-born copywriter.

His first business venture was a mail-order book company called Little Leather Library. It sold Shakespeare’s plays with Whitman’s chocolates, and it did pretty well. But not well enough. With time, the business fizzled.

Nonetheless, Scherman was convinced that the idea of selling books via mail was a good one.

So, in 1926, he co-founded the Book of the Month Club. Whereas the Little Leather Library focused on classic tomes, the Club marketed newly published books.

Furthermore, the Club utilized a subscription model.

The company’s goal was to make readers buy more than just a couple of individual titles. And the premise was a simple one.

Subscribers to the Club would receive a new book every month, chosen by an editorial panel made up of writers, journalists, and editors. Not only would customers no longer have to rely on their own resources, but they’d also eliminate the need to travel to a bookstore.

The company, on the other hand, could comfortably rely on future book sales even before the books were released.

Of course, there were plenty of skeptics too. They argued that the Club treated books as objects purchased for their novelty when they really should have been bought for their quality.

Did the customers care? Not in the slightest.

The Club had 4,750 original members. By the end of the first year, this number skyrocketed to 46,539, and the Club’s sales were worth more than half a million dollars.

You might be wondering: is the Book of the Month Club still around?

You bet!

But it has adapted to the changing times. Today, it’s target market is millennial women, not middle-class individuals with limited access to bookstores.

People love them, but why?

Most subscription boxes share similar features.

These include:

  • Physical delivery
  • Recurring membership
  • A specific value proposition, such as convenience, surprise, thoughtful presentation, careful curation, discovery, or savings

Convenience is what made people subscribe to the Book of the Month Club in the 1920s, back when subscription boxes were not yet cool. By joining the Club, bibliophiles no longer had to make the (sometimes very long) trek to the bookstore. In other words, the Club solved a very real problem.

Convenience can also mean that customers no longer have to worry about re-ordering something (such as soap or pet food). Or it can mean a convenient way of testing new products without committing to purchasing them at a full-price.

The element of surprise is what keeps subscription boxes exciting. When most of the products are mystery items, people can’t help but feel the anticipation. Some companies further elevate this feeling by offering sneak peeks.

Thoughtful presentation turns the process of opening a subscription box from a tedious chore to an exhilarating experience.

No one wants to receive a box full of random items, which is where careful curation comes in. Some subscription boxes are thematically based, others are curated by experts, and others still are put together by customers, at least partly. For example, the items sent out to you might be influenced by a beauty profile that you fill out online.

Customers that opt for subscription boxes that offer the discovery feature are looking to try out new products that aren’t readily available elsewhere.

Finally, there’s the element of savings. In general, those who subscribe to boxes that offer a cost-saving feature remain loyal for as long as they feel they’re getting a good deal.

What’s in a box?

A box full of random items might be the basic answer to “What is a subscription box?”

But it’s not the products inside the box that get people excited. Rather, it’s the culmination of the products and the experience that they provide.

Today, there is a subscription box for pretty much everyone. Popular categories include beauty, babies, coffee, wine, craft, fitness, and pets. There are even subscription boxes for sock enthusiasts, survivalists, gold miners, crazy cat ladies, and pickle lovers!

Beauty boxes, such as Birchbox (who began the modern subscription service trend), provide their subscribers with a monthly selection of beauty items from both big brands and small boutiques.

Geeky subscription boxes often tempt individuals with nerdier interests. Loot Crate is the leader in this category. It offers gaming and pop culture collectibles, accessories, and apparel to its subscribers, known as Looters.

Food delivery is nothing new. However, innovative entrepreneurs take it a step further by delivering just the right amount of ingredients for a set number of meals. The ingredients also come with step-by-step instructions. Blue Apron is particularly popular.

Then there’s male grooming and the famous Dollar Shave Club.

The Dollar Shave Club achieved the seemingly impossible. It turned cheap razors into a billion-dollar business. The company’s success is not that surprising though. The appeal of their subscription box is obvious: Why get your razors at the drugstore if you can get them cheaper in the mail?

What’s more, today the Dollar Shave Club is more than just a subscription box service. It offers fragrances, hair gel, and other grooming essentials.

Furthermore, it recently launched an online and print magazine called “MEL.” This expansion shows that when done correctly, a subscription box business can become something much bigger.

Facts and figures

Now that the answer to “What is a subscription box?” is clear, let’s see who’s buying into this trend.

According to research by McKinsey & Company, in 2017, 15 percent of online shoppers subscribed to receive recurring products from e-commerce businesses. Many of these people have streaming-media subscriptions, such as Netflix, too.

Generally, subscription box consumers tend to:

  • Be 24 to 44 years old
  • Have incomes from $50,000 to $100,000
  • Live in cities in the Northeastern U.S.

Not only that, 60 percent of subscription box customers are women. Also, while an average customer holds 2 subscriptions, almost 35 percent subscribe to 3 or more e-commerce companies.

Subscription boxes can range anywhere from $10 to $1,000. Even if customers opt for the cheapest boxes, the costs quickly add up.

Interestingly, men are more likely to have three or more subscriptions, which means that they probably place a higher value on automated purchasing.

The differences don’t end there.

Men and women are also naturally drawn to different subscription services. Whereas women opt for beauty and apparel subscription boxes, men gravitate towards video game collectibles, razors, and food-delivery services.

Subscription boxes are no longer a niche business idea. Traditional retailers such as Walmart and Target are catching on and are offering subscription services for athletic apparel, makeup, and more.

Are Subscription Boxes Worth It?

The truth is: When you receive your subscription box, sometimes you’re not yet sure if the package is hiding something amazing or something lame.

Indeed, not knowing what will come in the mail next is why customers love subscription boxes so much. But that doesn’t mean that they’ll remain subscribed to a subscription service for life.

Almost 40 percent of subscription box customers cancel their membership, usually within 3 to 6 months. However, when customers find a service that they like, they tend to stick with it.

For customers, subscription boxes are a convenient, personalized, and sometimes low-cost way to purchase what they want or need.

On the other hand, companies looking to make it in this market should focus on providing a great experience. If they do it right, they could potentially end up with a multi-million dollar business.

What subscription boxes have you tried? Sound off in the comments below!

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