What’s the big deal with subscription box services?


29 Jul 2016248 Shares

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Subscription box packaging from Not-Another-Bill. Photo via Not-Another-Bill

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Sound business strategy or soon-to-be-forgotten fad? We quizzed subscription box entrepreneurs on how their industry delivers.

Speculation that subscription box services are changing the landscape of consumer packaged goods and disrupting traditional retail brands has ramped up in light of the reported billion-dollar acquisition of Dollar Shave Club, and we were keen to learn more.

We’re taking a sweeping look at subscription services following this model (or similar), exploring this broad market opportunity that’s said to depend on strong customer relationships and the creation of value outside the product itself.

Inspirefest 2017

Geek and sundry

Loot Crate delivers geek, gaming and pop culture collectibles and accessories to 600,000 recurring monthly subscribers worldwide, Ireland included.

Subscribers – known as Looters – are supplied with mystery boxes each month, tailored around pop culture franchises. Each box offers four to seven uniquely curated, mostly exclusive items ranging from figurines to comic books and apparel.

“As a company that just crossed the $100m revenue mark last year, we know there is tremendous opportunity in simply focusing on driving further growth with our traditional entertainment and pop culture business,” said CFO Eric Chan.

“In addition, there are opportunities for Loot Crate to fulfil its vision of being a broad-based fan platform by offering Loot Crate experiences and products in other non-movie and -gaming verticals, similar to what we are doing with our recent deal with WWE.”

Loot Crate subscription box

Chan said players like Loot Crate are inspired by the success of Dollar Shave Club. “The winners in this space will be defined by their ability to gain scale and have a competitive edge.

“Loot Crate is unique in that it spends tremendous efforts in finding ways to promote our brand partners in every single box we produce. Our partners find tremendous value in our ability to galvanise and, frankly, help market their leading brands.”

Beauty on the inside

Birchbox and GlossyBox are perhaps the best known of the beauty boxes delivering to Ireland, each offering subscribers a monthly selection of beauty products from well-known brands (Benefit, OPI, Crabtree & Evelyn) to more boutique finds, all tailored to suit a personal beauty aesthetic.

The real beauty of these services is that they take the frustration out of sourcing products. Birchbox, for one, was set up with the intention of making it easier and more efficient for consumers to try, learn about and purchase beauty products online.

GlossyBox subscription package

An example of a GlossyBox package. Photo via GlossyBox

All of this convenience comes at a cost of between €12 and €14 per month, plus delivery. While you might, quite reasonably, expect to only receive sample-size products at that price, a GlossyBox subscriber we spoke to said that’s not the case, for that service at least.

“The product selection was quite good. A few times I got full-sized products and, while some of the stuff I didn’t really use, I found more of it very good,” our source revealed.

Furthermore, the subscriber found the service a treat, from the products to the packaging, which should make GlossyBox UK and Ireland MD Rachel Kavanagh happy.

“Every detail of our presentation has been thoughtfully constructed, each brand has been vetted to our highest quality standards and every selection has been carefully curated to surprise and delight [our subscribers]. We hold ourselves to these impeccable standards so we can be the leading resource for [subscribers] on global beauty products and trends,” Kavanagh states on the company website.

Getting the pint

With the explosion in craft beer interest over the past number of years, production of beer has increased by a factor of three in Ireland since 2012.

There are a number of off-licences and companies in Ireland purveying gift boxes of beer, and The Beer Club offers a monthly deal in which 12 bottles of international beers are sent to the customer each month.

One e-commerce expert said specifically of beer delivery services that the model might be hard to sell to people, and more convincing is needed. However, The Beer Club’s social media and marketing assistant, Brian Hyland, said there’s an untapped market in Ireland, and points to the success of similar subscription services internationally, like the Craft Beer Club in the US and Beer Hawk in the UK.

“We realised that normal off-licences were missing out on a huge opportunity by not offering delivery, and we recognised the opportunities that e-commerce represented,” said Hyland. “We would not only be speaking to a local audience, but also a national and international audience.”

Another area the company is beginning to move into is selling craft beer cans in larger quantities to festival-goers, as well as delivering direct to festivals.

Subscription of monthly delights

Not-Another-Bill has built itself a tidy little corner in the luxury subscription box market, delivering exclusive and unique products. The model is built on a very simple premise – and therein, you might say, lies its success.

Every month, subscribers receive a single high-quality surprise through the mail. Because who doesn’t enjoy getting lovely things delivered to their door?

Founder Ned Corbett-Winder sees the magic – as many do – in receiving something nice and tangible, “and it’s something that we see less and less of with emails and other communication devices.”

Not-Another-Bill luxury subscription box

A Not-Another-Bill luxury gift subscription box. Photo via Not-Another-Bill

‘Our aim is to surprise and delight’
– NED CORBETT-WINDER, NOT-ANOTHER-BILL

Corbett-Winder also points out what distinguishes his company from online marketplaces like Amazon: it’s all in the surprise, and the fact that it’s curated just for you.

In fact, this has informed the company’s brand. “We have always tried to do things differently, and this extends to how we interact with our customers and the products we send out. Our aim is to surprise and delight.”

It must be working. Not-Another-Bill has some 3,000 subscribers globally and its success has caught the attention of investors. The company is set to close its first investment round in the coming months.

Period pain reliever

There are monthly gifts you want, and then there are monthly supplies you just need – and necessity is truly the mother of MyLadyBug’s invention by Maryrose Simpson. “I simply wanted to receive the right products, at the right time, custom to my needs. This sparked the idea of a period subscription box.”

Surprised to find no such service in the European market, Simpson set about making it happen.

Love 💕💕💕 seeing all your 🐞📦MyLadyBug care packages 📦🐞 arrive repost from @thelibraloves 💕 Just home from work to find @myladybughq package arrived 💃🏻 Oh the bittersweet feeling of it all 🙈 It makes all the difference though so I love it 🙌🏼 I subscribed for 3months so this would be the last but it automatically renews itself on their system so it takes the hassle of trying to order it all over again which is a bonus 😇 Loving the little note though "It's my period and I'll cry if I want to" 😂 a little cry would be an understatement for me though, I'd give Satan himself a run for his money 👀😅 All in a day's work I suppose…. Hmm more like 5-7 🙄 but nothing a blast of Beyoncé or the Spice Girls wouldn't fix! #girlpower#periodsbelike#baneofmylife#letmelive#myladybug#carepackage#irish#treats#rollingwithmyfemininity#thewrathofsatanisuponus

A photo posted by MyLadyBug (@myladybughq) on

Sanitary protection is considered an evergreen sector – the customer base is there and they are actively buying on a monthly basis. Yet an early market survey told Simpson that 68pc of respondents were running out of period paraphernalia at the last minute. Facilitating this need with less friction is a no-brainer.

“Replenishment subscriptions align the desire of brands and retailers to lock in customers with a consumer desire for value, convenience and exploration,” said Simpson, who was inspired by US success stories like Birchbox and Hello Flo.

Like the latter, MyLadyBug doesn’t shy away from calling a period a period. “I never wanted MyLadyBug to be marketed in a discreet way, but when your business is taboo, it’s often hard to break though.”

Still, Simpson says this attitude has earned MyLadyBug a loyal following, with stronger relationships and engagement. This month, the company celebrated its first year in business with a record number of shipments.

The meal deal

Food delivery is increasingly common among the major supermarket chains these days, but one company in Ireland makes weekly deliveries of just the right amount of ingredients to make three nutritionally balanced meals. The delivery also comes with step-by-step instructions, and each meal should take 30 minutes to prepare, on average.

DropChef co-founder Ryan Scott says this method of delivering meal ingredients was something unfamiliar to the Irish market. “There are now food businesses with similar models internationally, however, they were unknown and unproven before we had started.”

What makes DropChef’s model unique compared with a lot of online subscription services is that it allows you to suspend delivery for a few weeks. What’s more, DropChef donates one meal to a child in need for every meal cooked using the service.

DropChef

Photo via Colin Judge/DropChef

‘We are now having to rewrite the rules on subscription business so that they are fairer for our customers’
– RYAN SCOTT, DROPCHEF

“I feel like a lot of other subscription businesses – such as gym memberships, TV contracts and software – have destroyed consumer trust and that we are now having to do our bit to rewrite the rules on subscription business so that they are fairer for our customers,” said Scott.

While currently based in Dublin, other similar food delivery services exist elsewhere in the country, such as Clean Cut Meals in the west.

Fruit for your labour

Other food subscription services in Ireland, such as the Organic Supermarket, deliver organic products to customers’ doors while The Fruit People deliver selections of fruit to workplaces.

“We started just after the recession, four years ago,” said Brian Dennis, one of The Fruit People’s founders. Spotting a gap in the market, the company set about delivering 45 pieces of ‘pick up and go’ fruit in some boxes, smoothies in others, delivered daily, weekly, monthly or on an ad hoc basis.

The Fruit People

Photo via The Fruit People

“Most managers of offices haven’t time to head to the shop every day, so we take care of that for them,” said Dennis.

In the beginning, cold calling was the order of the day, but marketing tactics changed as the company grew. “About 80pc of our clients came from that, now it’s probably 80pc word-of-mouth,” said Dennis.

Client relationships are key, such that the company now has 400 subscribers in Dublin – enough to let it branch out into other Irish cities as of last month, though this means returning to that brand-building process. “It’s largely back to the drawing board, getting the name out there,” said Dennis.

Get your groove box

In an age when the majority of people download or stream their music, a subscription service for physical music collections might seem like a mistaken business model. At least, that would be the case if sales of vinyl records weren’t at a 28-year high following a resurgence of interest in the nostalgic charm and audio quality of wax discs.

Now that vinyl has become popular again, services like Vnyl – based in the US – are offering the chance to sign up for a monthly subscription to long-play records.

Vnyl music subscription service

Promotional image via Vnyl

Launched as a Kickstarter campaign back in 2014, Vnyl attempted to turn itself into the ‘Netflix of vinyl’ by sending customers three albums each month, curated to the customers’ music tastes, for the recurring fee of $24.

While great for vinyl lovers, a lack of an alternative closer to home can make Vnyl prohibitively expensive for Irish subscribers, tacking on an additional cost of $30 per delivery.

Espresso delivery

Badger & Dodo didn’t start out as a subscription service, but, according to founder Brock Lewin, it made sense to turn it into one.

The Cork-based boutique coffee roasters started at local farmers’ markets, and eventually scaled up to wholesale supply and couriered delivery for local cafés. From there, it was a short step to online subscriptions – they just made financial sense, on both sides of the transaction.

“The subscription services we offer allow us to bulk roast and post, bringing with them economies of scale in the workplace, which then allow us, in turn, to offer savings to the customer,” said Lewin.

Badger & Dodo coffee subscription box

A sampling of Badger & Dodo coffee. Photo via Brock Lewin

Brand identity is essential to Badger & Dodo. According to Lewin, “Our brand is associated with quality, from the cups and the bags to the quality of the coffee. Even the ‘boutique coffee roasters’ tagline points people in the direction of a good quality product.

“We pay a lot for our coffee, and we spend a lot of time ensuring we roast and deliver it in the best possible way, so we need people to know that what we supply isn’t just your average cup.”

Badger & Dodo’s subscription service is still growing, but if its popularity in cafés around the country is anything to go by, it can only get bigger from here.

Doggie treats

Pooch Post is a monthly subscription box service based in Kildare, only this one’s for your dog.

“We deliver a monthly package of various high-quality treats, toys and accessories direct to the dog lovers’ homes in both Ireland and the UK,” said director Stephen Doonan.

Doolan believes Ireland is a nation of dog lovers, and people who truly care about the health and wellbeing of their animals. “The market is leaning more and more every day to the healthy natural food, treats and eco-friendly toys,” he revealed. “We here at PoochPost find the brands that aren’t readily available in Ireland – such as Green and Wild’s, and Beco – and introduce them to our customers.”

Pet subscription box

Not all subscription boxes are for people. Photo via Pooch Post

Doonan agreed that Dollar Shave Club has been an inspiration, as well as the aforementioned Loot Crate.

“It was a perfect combination of timing, as I was following the boom of the subscription box service in America while I was looking for these healthier alternatives for my own dog (Lilly). This sparked an idea: instead of researching these brands and buying them for myself, I can make other dog lovers aware of the treats and toys available in the format of a subscription box.”

Doing it for the kids

Baebox is a monthly subscription box launching in September targeting girls aged eight to 12. “I’ve got a 13-year-old daughter. It’s a market I know well,” said Rosie Shelley, the woman behind it all.

The forthcoming service will deliver a Baebox packed with fun products ranging from stationery and tote bags to toiletries and games. There’ll also be postcards emblazoned with positive messages and inspirational quotes, with each box aiming to motivate, as well as delight.

“The tagline of Baebox is ‘Awesome as you are’. That’s the overriding message the box is looking to give to this audience – to accept themselves as they are because they are valued individuals,” said Shelley.

“I set up the company at the beginning of the year, but really started focusing on it after attending Inspirefest in Dublin in July,” she added.

“I was inspired by the women there who were all doing something purposeful with their lives. They were following their passions and making a difference in the world. I left knowing I needed to do the same, so scaled up the subscription box planning.”

Baebox subscription box

‘To be successful, the products, the packing and the pricing have to be right’
– ROSIE SHELLEY, BAEBOX

Shelley has been the recipient of beauty box subscriptions and, encouraged by their success, she plans to launch Baebox in the UK first.

“To be successful, the products, the packing and the pricing have to be right,” she explained.

Shelley also revealed that there is a strong online community of subscription box entrepreneurs, largely on Facebook. “We all support each other and it’s great to be part of it. Most are US-based but the subscription box market is definitely growing in Europe,” she said.

“There are boxes being developed which focus on crafting, science, stationery, natural products. It’s a sector likely to grow and grow.”

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Updated at 9.45am on 4 August to clarify details of the Birchbox and GlossyBox services.

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