Subscription Box Research
To have insights into subscription box metrics. Specifically to understand industry pricing averages, how often these boxes are delivered (every month, every 3 months, every 6 months), and what the industry average churn rates of subscription boxes are. For example, after 6 months, what percentage of customers who signed up still use the service. Additionally, to have insights into why consumers like subscription boxes, what features of subscription boxes do consumers like, along with the most common reasons customers have for signing up to subscription boxes in the first place, as well as the most common reasons customers give for canceling their subscription boxes. Finally, to have a list of 15 of the most popular subscription boxes and for those, to have a description of them, the general frequency of delivery to customers, the pricing structure, and any other points of interest about the subscription box.
- According to a recent Fast Company article, there were 3,500 subscription box services as of October of last year, an increase of 40% from the year before.
- Subscription boxes are still a small segment of the overall retail industry, however, a growing number of consumers are planning to try a few out. "First Insight’s recent survey on subscription boxes, showed that 25% of male and female combined respondents are currently getting a subscription box, and another 32% of respondents plan to subscribe in the next six months."
- “Subscription box services are definitely picking up steam,” according to Greg Petro, CEO of First Insight. “Not only do they provide shoppers with convenience, but they also serve up items in a smart way. As consumers are less interested in going in-store to browse, these boxes are bringing the delight of finding something they love without the hassle of getting in their car.''
- Retailers like Target and Walmart are not oblivious to the subscription box trend, as they have started “Beauty Box” subscription box services. Additionally, Amazon has no fewer than 18 subscription boxes available.
- Consumers can get stuck when it comes to too many choices being presented to them and then selecting the items they want. Subscription boxes are the perfect solution to indecisiveness and regret as they curate products according to a customer’s personal preferences, simplifying the process, and letting personalization become the center of the retailer-customer relationship in a way that encourages extreme loyalty.
- The motivation for consumers to buy these boxes can be partially explained through the rush of dopamine that happens to people when there is anticipation of a reward and when the reward is actually delivered.
- According to a McKinsey study, "consumers want a great end-to-end experience and are willing to subscribe only where automated purchasing gives them tangible benefits, such as lower costs or increased personalization." 28 percent of those surveyed by McKinsey said that a personalized experience was the most important reason for continuing to subscribe. And consumers are quick to cancel subscription boxes that do not deliver a superior experience.
- Prices for boxes vary depending on the type of box, with costs ranging from $10 per month for beauty retailer Birchbox, to over $100 for luxury retailer Monthly Express.
- Retailers know that most customers want to see, touch and “experience” products before they buy them, so subscription boxes, often filled with smaller sample sizes of new products, give customers a chance to try before they buy.
- "Because the price is automatically deducted from your account, you may become complacent in continuing to pay for it. The amount also may not be significant enough to make an effort to cancel the subscription. Additionally, because the payment is structured so it generally bills on a monthly basis, you likely aren’t thinking about the long-term cost."
- According to Fuel by McKinsey, the subscription e-Commerce market is worth about $10 billion.
- The average subscriber to subscription boxes has two subscriptions, and over a third have three or more subscriptions.
- According to data from PitchBook, 2018 saw the most amount of capital ever invested into subscription box businesses, however, the number of venture capital deals peaked back in 2016. Overall growth appears to be slowing which may be a flag that the young industry is already maturing, allowing the bigger companies to flourish while the smaller ones die out. In fact, 13% of merchants tracked by My Subscription Addiction have stopped operations.
- In addition to this public search, we scanned our proprietary research database of over 1 million sources and were unable to find any specific research reports that address the stated goals.
Summary Of Our Early Findings Relevant To The Goals
- Our first hour of research made it very clear that there is plenty of publicly available information on this subject.
- We were able to, in our first hour of research, get some insights surrounding why consumers like subscription boxes, and why consumers would sign up for subscription boxes, along with many industry insights.
- We did not have time to research industry pricing averages, how often these boxes are delivered, and what the industry average churn rates of subscription boxes are. We also did not have time to build a list of 15 of the most popular subscription boxes and for those, to have a description of them, the general frequency of delivery to customers, the pricing structure, and any other points of interest about the subscription box.
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