Subscription Boxes

How It’s Developing

The current wave of subscription box popularity can trace back to 2010, when Birchbox introduced an affordable beauty box filled with sample-size beauty products from high-end brands – the service provided post-recession customers with an affordable luxury experience that also helped users navigate a market (beauty products) that can sometimes be overwhelming. [1] Beginning with smaller digital only retailers and expanding to more mainstream brands and brick-and-mortar retailers, the subscription box market has grown to include food and drink, children’s and baby products, health products, cosmetics, meal kits, pet food, women’s and men’s apparel, video games, and more.

Birchbox’s subscription model provided subscribers with more than just samples. The service also curated content – the company’s blog discussed beauty trends and shared more information about the products; boxes were built around themes like an April Earth Day box with eco-friendly products; and the boxes were tailored to customer’s stated tastes and skin and hair types. [2]

Birchbox’s success was also rooted in creating an experience. Customers looked forward to receiving a well-designed package with some element of surprise – the experience played into social media and video sharing where recipients would post unboxing, reaction, and review videos as they opened each month’s box. [3]

In addition to curated products, content, and experience, subscription boxes provide a basic appeal of convenience. With boxes delivered to subscribers’ doors and options to preview and return items, customers had their shopping experiences simplified. [4]

Subscription boxes can generally fall into three broad types: replenishment subscriptions that allow consumers to automate the purchase of regularly used items, like razors or diapers (e.g., Dollar Shave Club); curation subscriptions that build in an element of surprise and delight by providing new items or highly personalized experiences (e.g., Birchbox); and access subscriptions, where the customer pays a monthly fee to obtain lower prices or subscriber-only promotions, primarily in the apparel and food categories (e.g., Amazon Subscribe and Save). [5]

Subscription box programs provide several incentives to the businesses or providers behind them. The subscription model provides a base of recurring subscriptions from which the company can plan supply and fulfillment. Subscription box programs usually feed into market data collection and data personalization – from customer sign-up processes that gather taste preferences to ratings and returns data indicating which products most appealed to the user and which did not. The flow of data from buyers to marketers to curators and choice makers helps fuel an increasingly personalized and efficient program. [6]

In 2015, Amir Elaguizy, the founder of Cratejoy, a platform that allows entrepreneurs to create subscription businesses from scratch, estimated that there were 10,000 subscriptions on the market, from small services catering to less than a hundred customers to the larger players like Birchbox and Blue Apron – and sites like My Subscription Addiction catalog and review hundreds of subscription box services. [7]

According to a 2018 McKinsey & Company survey, 15% of online shoppers had signed up for one or more subscriptions to receive products on a recurring basis, most frequently through monthly boxes - often younger, affluent urbanites, the subscription services offer a convenient, personalized, and, often lower-cost way to buy what they want and need. [8]

McKinsey and Company’s research indicates that customers are not inherently motivated by the subscription model but are willing to engage in subscriptions if they provide great end-to-end experiences, lower costs, or increased personalization. [9]

There is, of course, the challenge of maintaining subscribers. McKinsey and Company’s 2018 research found that nearly 40% of e-commerce subscribers have canceled their subscriptions. [10] Subscription meal kit service Blue Apron reported a loss of more than 200,000 customers (25% of its base) between September 2017 and September 2018. [11] Meal kits provide an example for how these subscriptions serve as “training wheels” to help introduce customers to practices or processes that had previously been intimidating, but which, though access to the subscription, become more manageable – as meal kit subscribers become more comfortable with ingredients, cooking methods, and recipes, they become more confident in their own abilities without the subscription box and instructions. [12]

Even as mail subscription boxes churn through customers, the appeal of the prepared kit continues. Especially among meal kits, there is a shift to make meal kits available in brick-and-mortar retail locations. In 2018, Blue Apron began selling their meal kits in Costco locations (that placement has since left Costco shelves); Walmart began to offer their own meal kits in stores; HelloFresh announced a partnership with Giant Food and Stop & Shop stores; and Kroger announced its intentions to buy Home Chef. [13] In 2017, grocery chain Albertsons acquired Plated, making Plated kits available in Safeway and Albertsons stores. [14] While these in-store placements eliminate some of the competitive advantages of subscription kits (recurring revenue; data flow; etc.), they still demonstrate consumers’ interest in convenient and prepared kits that address specific needs.

As the market has become more crowded with mainstream brands, and the marketing language becomes more standardized (“curated,” “surprise,” “delight”), there are signs of consumer fatigue – the services that will likely survive and differentiate themselves are those that can offer hard-to-find, personalized products on a regular basis. [15] There is an increased focus on finding niche services that support and strengthen specific communities, rather than creating a generalized service to which people will have only limited connection. [16]

Why It Matters

In many ways, subscription boxes fall in line with some traditional library outreach services, including books-by-mail programs, deposit collections, or even pre-assembled themed kits. Where subscription boxes may introduce new elements are in aspects of convenience (delivery to users regardless of accessibility), pre-enrollment (recurring subscriptions), data collection, and personalization.

The focus on data collection and personalization could challenge library values for privacy and intellectual freedom. Even collecting reading preferences from pilot subscribers may require staff to carefully consider policies and practices to ensure patron privacy.

At a time when expertise is becoming less and less valuable, the marketing language around subscription boxes (“chef-inspired,” “personal stylists,” “beauty experts”) often highlights expertise. Library staff have expertise in many areas, from readers advisory to early childhood literacy to STEM and making. Subscription boxes could provide opportunities for library staff to leverage their expertise to build strong connections with specific audiences in their communities.

There are growing categories of subscription boxes that may overlap with some of the traditional purposes of libraries.

Amazon’s Prime Book Box offers a $22.99 subscription service that delivers hand-picked children’s books every 1, 2, or 3 months for ages baby-two years, three-five years, six-eight years, and nine-twelve years – in addition to the curated selections, convenience of delivery, and element of surprise, the Book Box promises up to 40% off list prices and the best value on hardcover books sold by Amazon. [17] In 2019, there were reports that Reese Witherspoon’s Hello Sunshine media company was exploring subscription boxes as an option for Reese’s Book Club, seeking to expand the popular online book club into a revenue-generating business. [18] And in 2015, the perennial Book of the Month Club (originally founded in 1926) underwent a significant brand re-launch as an e-commerce subscription service, offering members the opportunity to select from five new titles each month, including one title recommended based on past selections and indicated reading preferences. [19]

Amazon is also using subscription boxes to make inroads into another growing library focus area – STEM and STEAM. In 2017, the company introduced a STEM toy subscription club to deliver science, technology, engineering, and math toys to customers’ door – the $19.99 per-month subscription includes toys selected by “toy experts.” [20] And in 2019, retail craft chain Joann partnered with GoldieBlox children's media company on a monthly subscription box meant to encourage kids' development of STEM skills, with tools to make science-based projects and information about the science and technology behind each craft. [21]

While subscription boxes can provide convenience, convenience may come with an environmental cost. Many subscription boxes must be carefully packaged and shipped, creating packaging waste and contributing to carbon emissions. [22] Carefully selected and environmentally friendly packaging or the ready-to-go and reusable kits available for pick-up at brick-and-mortar locations could help address some of the environmental concerns associated with subscription boxes.