Subscription boxes have been around for years, but they are now trending as a viable and profitable business service. Their rise in popularity is mainly due to the reduction of associated costs by technology. Both logistics and customer servicing costs have become low enough for small businesses to take part.
A subscription box is a curated package based on a theme that your customers will receive at set intervals. Providing the service requires that you understand the basics and adequately plan it.
Running a business is an impressive feat on its own, but you have to find ways to lower costs and increase revenues. Subscription boxes are a viable option, whether they’re your sole focus or part of a larger business strategy.
A Brief History of the Subscription Box
Subscription boxes have been around since the early 2000s. They started as arts and crafts product offerings from independent artists, crafters, zines, and shops. In the 2010s, the industry began to grow; an example is BarkBox, which started in 2012 with 1,500 subscribers and grew to 55,000 by the following year.
The popularity of subscription boxes is in product discovery. Consumers get exposure to products and brands that meet their needs. Large retailers have also entered the market to take advantage of the trend. Subscription boxes became an essential service during the COVID-19 shutdowns. As consumers couldn’t do their regular shopping, they relied even more on delivery services to fulfill their needs and pique their interests.
Picking Your Products
There are two basic types of subscription boxes, replenishing and aspirational. Replenishing subscription boxes save you time by providing goods you regularly need replenished, like soap or shaving cream. Aspirational subscription boxes, like food and fashion, appeal to the customer’s desires or personality. You can curate your box based on criteria like theme, type of product, and business ethos. Positive business ethics approaches can help you build your brand and raise positive sentiment around your box.
Subscription boxes don’t necessarily offer new products; they provide a new experience. Over the years, retail tastes have changed. It’s not enough to give customers what they want since nowadays they can easily get it for themselves, so to stand out, you need to give customers something they are not expecting and didn’t even know they needed. For example, a wine enthusiast already has a list of favorite wines and where they can get them, so if you want to impress that customer, you need to expand their palette with new wines.
Some other unique subscription boxes models include:
- A monthly box of products from which customers can choose what they want to keep and return what they don’t want to keep. The pricing incentivizes the customer to keep everything. Some services show the customer what’s in the box before it is shipped, so they can choose what they can remove what they don’t want.
- Rental sites that let you borrow or use a product (like clothes or video games) that you want; once you return it, they send you a new one.
Customers are unlikely to stick with you forever; they will likely end their subscription after some time. So, it is vital to increase the subscription lifespan of each customer, replace leaving customers with new ones and grow your subscriber base.
Building Your Brand
One of the technologies that have made customer acquisition cheaper is e-commerce, or the ability to buy and sell things online. E-commerce resources and platforms have become more affordable with time so that small businesses can easily participate.
E-commerce requires that you start with a website, then build your app and social media presence around it. A website is an opportunity to display your products, explain your business, inform customers and build your brand.
Most of the world is networking on social media sites like Twitter, Facebook, Pinterest, Etsy, and many others. Your presence on those sites is a cost-effective strategy to connect with them and build a community around your product. To improve your social media presence, you should take steps like:
- Understanding your target demographic and knowing which platforms they use.
- Creating a strategy that will guide your online personality, content, and engagement.
- Creating engaging content that will expand your reach and community.
- Using social media tools to automate tasks and gather information.
- Tracking your performance and refine it over time.
Subscription box services often use social media to build their brand. They frequently partner with social media influencers to boost engagement. The partnership can be in the form of endorsement, unboxing videos, tutorials, or any range of activities that can promote the service and the products it offers.
Taking On the Technical Side
- Inventory & Distribution
Your products and how they reach your customers are at the center of a subscription box service. Therefore, it’s essential that you get these things right; customers won’t wait for excuses before they unsubscribe.
When you start, it may be simpler to hold inventory at home and ship from there. But as your business grows, you will need a more sophisticated, cost-efficient, reliable, and fast distribution system. Consider using e-commerce fulfillment services for your subscription box. With e-commerce fulfillment services, your business will gain the reach, economies of scale, and efficiencies that larger enterprises have at a low cost.
- Hiring
As you grow, you may need more help with various aspects of your business. Hiring employees will enable you to complement your capabilities and bring in new skills. This will require a hiring process that will get you the right attitudes, skills, and potential that you need to keep growing. When you hire, keep the following in mind:
- Be clear about what you expect from the employee. For example, work ethics, hours of work, remote work or not, or even the personality types you are looking for.
- Use talent assessment tools to screen candidates to get the ones that will fit with your organization.
- Adapt your talent selection process according to the type of job on offer, but ensure that there is still consistency in the process.
- Don’t rush to hire. Take your time to find the right employee.
- As the interviewer, be prepared for the interview.
Think Inside the Box
Subscription boxes are a service that any business can achieve. Multiple technology companies have lowered the costs of creating and maintaining an e-commerce platform. Choose a model that will work for your business and target market, fill it with the right products and manage it.
