Large Retailers Are Getting in the Subscription Game

by Jeremy Kraft on Apr 19, 2018 3:00:00 AM e-Commerce, Consumer Behavior, Trends, Direct Response, Marketing, Consumer

Subscription Box
From humble beginnings, the subscription box industry has grown by leaps and bounds. With over 2,000 subscription boxes available, consumers can have apparel, cosmetics, meals and wine boxes — to name just a few — delivered to their front door monthly, quarterly or at a variety of intervals. Participants can curate their journey with the subscription brand, and their boxes provide unique choice, variety, flexibility, and convenience that traditional shopping cannot.

Subscription box businesses attracted over 11 million customers in 2017. Monthly website visits to subscription box companies grew eightfold between 2014 and 2017; last April alone, subscription box websites saw 37 million visitors. Companies have capitalized on direct-to-consumer selling on a subscription model to savvy consumers, many of whom are late-stage Millennials and Gen Xers with discretionary income.

Early movers in the subscription box companies, like Blue Apron, Dollar Shave Club, HelloFresh and Stitch Fix, have either gone public or been sold. Others, such as Harry’s, have been recently recapitalized and are branching out into complementary products.

Seeing this success, larger traditional retailers are getting in on the action. Target recently announced that it would begin offering a children’s apparel subscription box — its third subscription box, along with its Beauty Box and Baby Box. Target is hardly alone — Amazon, Gap, Sephora, Under Armour and Walmart have recently launched subscription boxes of their own. These large retailers have the established supply chains that can support quick growth, as well as brick-and-mortar presence to complete an omnichannel approach. An additional channel, such as subscription boxes, can help retailers build relationships with existing customers or attract new customers as well.

The subscription box industry has been criticized by some as a passing fad. Those who analyze this market have seen, in some cases, high churn and considerable customer turnover and have therefore declared subscription boxes as the flavor of the week. Sure, there have been missteps and failures along the way, but such is the case in any industry. The continued growth of the subscription box industry speaks for itself, and the fact that companies, such as Amazon and Walmart, are beginning to participate is proof that the industry has a bright future.

About the Author

Jeremy Kraft headshot-318628-editedJeremy Kraft, Growth Strategist at Media Horizons, identifies opportunities for business development and manages the company’s social media and blog. Kraft, who lives in New York City, graduated from the University of Connecticut in 2009 with a B.S. in Business Management with a concentration in Entrepreneurship.
 
Media Horizons is an award-winning response marketing agency that provides omnichannel marketing leadership to help companies cost effectively generate new customers and maximize their lifetime value. Its complete suite of services provides measurable marketing solutions in digital and offline media.

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