Subscription box

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Subscription boxes are a recurring delivery of niche products as part of a marketing strategy and a method of product distribution. Subscription boxes are used by subscription-based ecommerce businesses, referred to as "subcom" for short, which follow a subscription business model. They target a wide range of customers and cater to a variety of specific needs and interests. It is estimated that there are 400 to 600 different kinds of subscription boxes in the United States alone and more overseas. [1] Subscriptions vary in both cost and frequency, making them more accessible to a greater range of customers with different socioeconomic backgrounds. Subscription boxes tend to range from $10 to $100. [2]

Contents

History and appeal

Meals on wheels in Stepney, 1962 Meals on wheels in Stepney Wellcome L0074581.jpg
Meals on wheels in Stepney, 1962

Various subscription commerce companies are growing rapidly. BarkBox’s subscribers grew from 1,500 to 55,000 between 2012 and 2013. [3] According to Forbes , Birchbox, which is arguably the most recognizable service and valued at a reported $485 million in April, 2014, [4] led the subscription box trend with its 2010 launch. Birchbox's model of providing customers with samples of personal care products in order to upsell customers into buying the standard sizes of the sample products they enjoyed has proven to be a successful marketing tool. Birchbox has reached nearly 400,000 monthly subscribers and has inspired many other companies to start utilizing subscription boxes. [5]

Part of the appeal of subscription boxes is that consumers discover products they might not have otherwise. This allows customers to try products and brands risk-free. The increased exposure to new products helps customers discover optimal products for their preferences and needs. While only some subscription boxes have return options, there are places online to exchange unwanted items. [6] The subscription box industry came into the limelight when Unilever acquired Dollar Shave Club, another well-known entity in this space. [7]

Business costs

Shipping costs and the need to constantly innovate present challenges to retailers offering the subscription service. [3]

See also

Related Research Articles

The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a product or service. The model was pioneered by publishers of books and periodicals in the 17th century, and is now used by many businesses, websites and even pharmaceutical companies in partnership with the government.

<span class="mw-page-title-main">Brick and mortar</span> Class of organisations or businesses

Brick and mortar is an organization or business with a physical presence in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail shops, factory production facilities, or warehouses for its operations. More specifically, in the jargon of e-commerce businesses in the 2000s, brick-and-mortar businesses are companies that have a physical presence and offer face-to-face customer experiences.

Deezer is a French online music streaming service. It allows users to listen to music content from record labels, as well as podcasts on various devices online or offline.

Republic Wireless is an American mobile virtual network operator (MVNO). It is a subsidiary of Dish Wireless. Republic sells low cost mobile phone service on its partner AT&T's network. Republic started as a unique company that provided customers with VOIP numbers which relied on WiFi first with cell as a backup. After being acquired by Dish Wireless, Republic converted to providing conventional cellular service. Their service is now promoted as being available to Dish Network customers only. Switched from T-Mobile network to AT&T network when purchased by Dish around July 2022.

<span class="mw-page-title-main">Aereo</span> Technology company

Aereo was a technology company based in New York City that allowed subscribers to view live and time-shifted streams of over-the-air television on Internet-connected devices. The service opened to customers in March 2012, and was backed by Barry Diller's IAC.

Dollar Shave Club is an American company based in Venice, California, that delivers razors and other personal grooming products to customers by mail. It delivers razor blades on a monthly basis and offers additional grooming products for home delivery.

Gousto, a trading name of SCA Investments Limited, is a British meal kit retailer, headquartered in Shepherd's Bush, London, founded by Timo Boldt and James Carter. Gousto supplies subscribers with recipe kit boxes which include ready-measured, fresh ingredients and easily followed recipes.

Prehype is a venture development firm that focuses on building products and companies through collaboration with corporations and venture capitalists. The firm allows large companies to benefit from the energy and creativity of entrepreneurship without losing the organizational domain expertise and control. Prehype has offices in New York City, London, Copenhagen, and Rio de Janeiro, and was founded by Henrik Werdelin in September 2010. In addition to venture management services, the firm provides angel investments and access to a network of talent including entrepreneurs, engineers, designers, and developers.

Birchbox is a New York City-based online monthly subscription service that sends its subscribers a box of four to five selected samples of makeup, or other beauty related products. The products include skincare items, perfumes, organic based products, and various other cosmetics.

Postmates is a food delivery service, founded in 2011, and acquired by Uber in 2020. It offers local delivery of restaurant-prepared meals and other goods. It is headquartered in San Francisco, California.

<span class="mw-page-title-main">Food delivery</span> Courier service in which food is delivered to a customer

Retail food delivery is a courier service in which a restaurant, store, or independent food-delivery company delivers food to a customer. An order is typically made either through a restaurant or grocer's website or mobile app, or through a food ordering company. The delivered items can include entrees, sides, drinks, desserts, or grocery items and are typically delivered in boxes or bags. The delivery person will normally drive a car, but in bigger cities where homes and restaurants are closer together, they may use bikes or motorized scooters.

SimplyCook is a subscription-based recipe box service based in London. The company provides a monthly box containing four recipes and four nonperishable ingredient kits that are then added to fresh ingredients the subscriber purchases from the supermarket. SimplyCook was founded by Oliver Ashness in 2014. SimplyCook’s recipes have been featured in Woman’s World, Daily Express, and The Independent.

<span class="mw-page-title-main">Graze (company)</span> British snack company

Graze is a United Kingdom-based snack company which is owned by Unilever. Graze offers over 200 snack combinations through snack subscription boxes, an online shop and retailers. The company distributes thousands of snack boxes per day across the UK. Graze expanded operations to include the United States in 2013, launching snacks into US retailers in 2016.

<span class="mw-page-title-main">Home Chef</span>

Home Chef is a Chicago, Illinois-based meal kit and food delivery company that delivers pre-portioned ingredients and recipes to subscribers weekly in the United States. According to the company it delivers three million meals monthly to its subscribers.

Science Inc. is a Los Angeles-based startup studio that develops, invests in, and acquires various businesses. Science Inc. invests money and offers expertise to bring corporations to profitability. In 2011, Michael Jones founded the organization and is the current chief executive officer. Jones spent time serving with the company's Chief Executive Officers and investors on strategy, growth, and business development.

<span class="mw-page-title-main">Hayley Barna</span> American businesswoman

Hayley Barna is an American entrepreneur and venture capitalist who co-founded Birchbox in 2009 while at Harvard Business School. In 2015, Barna "stepped away from her day-to-day role" at Birchbox, remaining a board member. In 2016 she became a partner of First Round Capital.

<span class="mw-page-title-main">Amazon Prime</span> Paid subscription service offered by Amazon

Amazon Prime is a paid subscription service of Amazon which is available in various countries and gives users access to additional services otherwise unavailable or available at a premium to other Amazon customers. Services include same, one- or two-day delivery of goods and streaming music, video, e-books, gaming and grocery shopping services. In April 2021, Amazon reported that Prime had more than 200 million subscribers worldwide.

<span class="mw-page-title-main">Meal kit</span> Subscription service–foodservice business model

A meal kit is a subscription service–foodservice business model where a company sends customers pre-portioned and sometimes partially-prepared food ingredients and recipes to prepare home-cooked meals. Services that send pre-cooked meals are called meal delivery services. This subscription model has been cited as an example of the personalization of the food and beverage industry.

Vehicle subscription is a service where a customer pays a recurring fee for the right to use one or more automotive vehicles. Some vehicle subscriptions offer insurance and maintenance as part of the subscription fee; other subscriptions allow the subscriber to switch between different vehicles during their subscription period. Industry commentators consider vehicle subscription to be an alternative to owning or leasing a vehicle.

<span class="mw-page-title-main">Microsoft 365</span> Subscription services offered by Microsoft

Microsoft 365 is a product family of productivity software, collaboration and cloud-based services owned by Microsoft. It encompasses online services such as Outlook.com, OneDrive, Microsoft Teams, programs formerly marketed under the name Microsoft Office, enterprise products and services associated with these products such as Exchange Server, SharePoint, and Yammer. It also covers subscription plans encompassing these products, including those that include subscription-based licenses to desktop and mobile software, and hosted email and intranet services.

References

  1. Jayakumar, A. (2014, April 7). Little-box retailing: Subscription services offer new possibilities to consumers, major outlets. Retrieved November 30, 2014, from "Little-box retailing: Subscription services offer new possibilities to consumers, major outlets - the Washington Post". The Washington Post . Archived from the original on 2017-07-15. Retrieved 2017-09-15.
  2. Hutt, K. (2014, April 8). Subscription Boxes Can Feel Like Christmas, But Are They Worth It? Retrieved November 30, 2014, from "Archived copy". Archived from the original on 2015-01-24. Retrieved 2014-11-30.{{cite web}}: CS1 maint: archived copy as title (link)
  3. 1 2 Vaamonde, A. (2013, July 9). The send-a-box boom. Retrieved December 18, 2014, from "The send-a-box boom - Fortune". Archived from the original on 2015-01-14. Retrieved 2014-12-19.
  4. "Birchbox Raises $60 Million". TechCrunch. 21 April 2014. Retrieved 2019-08-20.
  5. Cutler, K.-M. (2013, 08 15). Birchbox Says Its Subscription Model is Working. Retrieved from TechCrunch: "Birchbox Says Its Subscription Model is Working, with 25% of Revenues Coming from E-Commerce Store | TechCrunch". 15 August 2013. Archived from the original on 2016-05-20. Retrieved 2017-09-15.
  6. Fussell, J. (2014, September 22). From Birchbox to Bulu Box: Customers love the thrill of monthly surprises. Retrieved November 17, 2014, from "From Birchbox to Bulu Box: Customers love the thrill of monthly surprises | the Kansas City Star". Archived from the original on 2014-09-26. Retrieved 2014-11-18.
  7. "Unilever buys Dollar Shave Club".