A look into the growth of the eCommerce Subscription Box Services Industry
Chances are you’ve either ordered or know someone who gets an eCommerce subscription box delivered to their home. This industry has really grown in the past three years alone as more and more customers decide to give them a try. Currently, the average subscriber receives seven boxes and has at least twelve on their wish list. Makeup and beauty products currently dominate the most popular subscription boxes, including food, shoes, vinyl, and other unique verticals.
Shorr Packaging decided to research further into the state of the eCommerce subscription services industry. They wanted to see just how the industry has taken off and which brands are leading the charge. So they turned the research they found into a visual guide that can be seen here.
Rise of Subscription eCommerce
According to My Subscription Addiction, there are 2,000 subscription box services out there right now. Subscription box website visits alone have skyrocketed from just over 700,000 in 2013 to 21.4 million today––a 3,000 percent increase. Large existing retailers are taking note of the industry’s growth. Starbucks, Adidas, Amazon, and Macy’s are just a few that have decided to jump into the game.
Beauty products lead the way in this industry. Seven of the top 10 subscription box services are beauty-related, and the top three most popular boxes are beauty brands Ipsy, Birchbox, and Julep Maven. Even Walmart has launched a beauty box business.
The subscription craze isn’t anything new. Magazines, newspapers, and local food delivery started it all. However, the first modern e-commerce subscription service, Birchbox, launched in 2010 and grew 179 percent in just 2-1/2 years to 800,000 members. In comparison, it took Columbia Record Club a whopping 41 years to grow its business by 196 percent. Impressed by the industry’s potential, more businesses entered the subscription box market in 2011, catering to niches like moms and babies, dogs, and even narrower markets like gold mining and survivalist gear.
So, who’s most interested in these services? The typical subscription box visitor is in their early forties and makes $78,436 a year. Nearly six out of 10 visitors are women. 8.6 million Americans, 4.3 percent of the online population, visited subscription box websites during the 2015 holiday season.
While the industry is booming, it isn’t a sure-fire bet for success. Thirteen percent of eCommerce subscription services tracked by My Subscription Addiction have gone out of business. Heavy product discounting, the novelty of the find among customers, and high packaging costs are just a few factors sinking some companies.
To stand out from the competition, e-Commerce subscription services are creating boxes that address practical shipping needs and contain embellishments like fabric liners and bows that reflect the brand’s identity. However, as the complexity of the box increases, so do the workforce hours needed to assemble those boxes. As a result, many subscription services are turning to package companies to automate and streamline the packaging process so they can focus on other priorities.