Subscription boxes for your eCommerce store — should you use them?

A box full of surprise

With online retail stores growing at a remarkable rate, the eCommerce market has become heavily saturated, making selling even the most innovative, convenient, and/or high-quality products more difficult. Whether you’re just starting out, or you’ve been in the eCommerce game for a while, getting your products in front of the right consumers and setting price points that drive purchases can be tough — which is why some retailers are considering subscription boxes.

With the emergence of subscription boxes in recent years, many eCommerce stores have decided to try out this new way of selling their products. However, the subscription box sales model isn’t necessarily the answer for every business type or size.

If you’re considering switching to or adding a subscription box model to your online retail store, it’s important to determine whether it’s right for your business.

What are subscription boxes?

There are several different types of subscription services (also referred to as subcom) available today. Some basic services include exactly what the consumer orders each month, while others offer added extras and surprises to delight the consumer.

A subscription box model is different from a recurring subscription service.

 

While some recurring subscription services do offer variation with each subscription, these are generally just automatic recurring deliveries of a specific product. A subscription box, on the other hand, typically provides consumers with some expected products, along with sample sizes of other products and/or free items.

These boxes present an additional element of surprise and/or anticipation, as consumers don’t know what else may be in the box. Consumers are paying for products, but they are also receiving the added benefit of the experience that goes along with receiving each subscription box.

Subscription Boxes Surprised

6 reasons to consider subscription boxes for your business

There are many reasons to consider a subscription box for your business. Here are six considerations to weigh when determine whether or not they’re a good fit for your eCommerce store:

  1. Additional revenue stream.

  2. More accurate revenue predictions.

  3. Target a specific niche.

  4. Enhanced convenience.

  5. Attract a new/broader audience.

  6. Create brand loyalty.

Keep reading to learn if subscription boxes are the way to go.

1. Additional revenue stream

As an eCommerce business owner, maintaining consistent revenue regardless of the season is critical to your long-term success. By creating an additional revenue stream — and one that repeats itself each month — is a great way to make up for the months where business tends to slow down a bit. If your business has seasonal ups and downs, you might consider adding a subscription service as an additional revenue stream.

2. More accurate revenue predictions

Unlike spontaneous purchases, subscription services are more consistent, which allows businesses to better predict quarterly and annual revenues. As a result, you can better allocate business funds for things like supplies, staff and marketing costs.

3. Target a specific niche

Subscription box services work well for businesses that want to target a very specific audience. For example, people who are watching their weight often love subscription boxes with options for healthy eating. And people who have pets tend to sign up for subscription services related to pet food, toys, and other accessories. If your business has a niche audience, it might be a great fit for the subscription box model.

4. Enhanced convenience

One of the greatest appeals of subscription boxes is their convenience, as consumers don’t need to place an order each month. This works well for everyday products like toiletries, food and clothing, which consumers know they’ll eventually run out of or need to replace. If your company sells products that need to be replaced on a regular basis, a recurring subscription or subscription box model might work well for you.

5. Attract a new/broader audience

By adding a new selling model to your brand, you will open up your target audience to include consumers who enjoy purchasing subscription boxes. By generating interest in your subscription box services, you can increase your brand reach and potentially attract an entirely new consumer audience.

6. Create brand loyalty

Subscription box services allow consumers to sample other products that they might otherwise never choose to purchase. The more quality products you can get in front of your subscribers, the more likely they are to become loyal to your brand for the long-term.

Subscription Boxes Packaging

Potential downsides to the subscription box model

While subscription box services can provide many benefits, there are some potential cons to the model, such as:

Disappointment with product selection

Not knowing what will be in a subscription box each month can be exciting and fun — unless the consumer doesn’t like what they get. There’s nothing more frustrating than paying for something that you aren’t satisfied with. This can lead to cancellations and requests for refunds, which can be quite a headache if it happens often.

High competition

Subscription boxes have been getting a lot of attention, which means your business isn’t the only one considering implementing this selling tactic. Your subscription service will have to be better than the competition in some way, whether it’s your price, quality, novelty or some other differentiator.

Potential to drive away one-time customers

If you decide to implement a subscription box selling model as the only way to purchase products from your company, you might drive away customers who only want to make a one-time purchase, or who aren’t willing to spend a little extra to get more value. If you continue to offer additional purchase options, this isn’t likely to be an issue.

Everyone’s doing it

Many companies are using the subscription box model successfully, and new businesses are trying it out every day. According to a survey by McKinsey & Company, some of the most popular subscription box sites include Amazon Subscribe & Save, Dollar Shave Club, Ipsy, Blue Apron and Birchbox. In addition, “28 percent of access and curation subscribers say having an excellent personalized experience is the most important reason to continue their subscriptions.” That means that simply by providing great customer service (along with high-quality products), you’ll be setting yourself up for success by adding subscription boxes to your business.

Lisa Leslie
Lisa Leslie is a professional writer, editor and social media marketing consultant living in New Hampshire. She is the founder of Writer By Default, a company focused on providing small businesses and solo entrepreneurs with quality and affordable writing services. Lisa's experience and passion for creativity and innovation have created a strong desire to help businesses succeed through the creation of compelling content and authentic storytelling.