The subscription box industry has been on the rise for several years, but its popularity soared during the pandemic as millions of consumers turned to online shopping. People were at home and looking for ways to entertain themselves, and subscription boxes provided an innovative solution. There are now subscription boxes for just about every interest imaginable, from fashion to fitness to pets, and the best part is the convenience of the items being delivered to your door.
According to a study by CouponFollow, an online hub for collecting coupon codes and promotions among major retailers, nearly one in five U.S. consumers first turned to direct-to-consumer subscription boxes during the first months of the pandemic in 2020.
Many people decided to shop online during the lockdowns starting from March 2020, so they could shop safely from home. Subscription services were not limited to food and household products. Major gains were also seen in beauty products, personal care boxes, and pet supplies. The pandemic also saw a considerable increase in subscriptions to streaming services, which passed 1 billion subscribers for the first time.
"For many American consumers taken by surprise by the pandemic, the subscription box industry brought a sense of comfort and convenience that was highly sought-after immediately following massive shutdowns across the country," Marc Mezzacca, founder and CEO at CouponFollow.
In the last decade, the US subscription economy grew 5-8x faster than traditional industries, outpacing growth rates in retail and the S&P 500. The global subscription box market continued to grow over the course of the pandemic, and in 2021, reached US$ 22.7 Billion. Looking forward, this number is expected to reach US$ 65.0 Billion by 2027.
INDUSTRY CHALLENGES
With these successes, retail subscription box businesses now face more significant challenges. In most parts of the world, the lifting of pandemic-era regulations has led to more consumers returning to physical stores. Shipping costs have risen sharply, squeezing the margins of companies that make products. The cost of acquiring customers is also high, as is the cost of keeping them. Cancellation rates are sometimes high.
Recently, there has been a flurry of companies entering the space, including startups and big firms launching products or acquiring subscriptions, and a recent report showed that 75% of subscription box brands may offer subscriptions by 2023. This has led to an increase in competition. These trends have been developing for years, just like the industry's rapid expansion, which means subscription box brands are vulnerable to such risks as customer acquisition costs, churning and cancellation, funding and subscription fatigue.
These changing conditions are forcing companies that rely solely on subscription models to develop creative solutions to differentiate themselves from their direct competitors as well as traditional retailers and e-commerce platforms. Some companies are making their subscription packages more flexible. Other companies are tweaking their subscription models or providing unique incentives.
MANSCAPED - CASE STUDY
Founded in 2016, MANSCAPED is a unique male grooming brand based in San Diego, California, US, offering precision-engineered tools, luxurious formulations and innovative lifestyle accessories – designed to revolutionize the industry of men’s grooming and hygiene. MANSCAPED Player’s Club offers a range of monthly subscription boxes at different price points. Depending on your requirements, you can choose Men’s Shaving & Skincare Subscription Boxes, Beard Subscription Boxes, and Wet Shaving Boxes.
MANSCAPED AND SEKO
MANSCAPED required a logistics partner who could implement an effective fulfillment strategy to support their expanding ecommerce demand – distributing online orders and subscriptions direct to customers in the UK and Europe, with the ability to expand the business into new global markets.
SEKO’s role was facilitating direct-to-consumer deliveries, enabling global expansion, and supporting production innovation. Since working with MANSCAPED, SEKO has packed and delivered tens of thousands of MANSCAPED products and kits from the stock held in SEKO’s warehouse - shipping from Milton Keynes DC, into the UK and Europe, with more global locations to follow. In addition, SEKO has also been able to accommodate MANSCAPED’s fulfillment strategy of various distribution channels by successfully dispatching shipments to Amazon’s fulfillment center network.
