What are subscription box businesses, who are these companies and why are they so popular?

Remember the brilliant Dollar Shave Club’s “Our blades are f***ing great” video? This brand selling quality razors for $1 is, in fact, a pioneer of the subscription box craze. Their idea was simple – they will top-quality razors to your doorstep and help you save lots of money. The monthly subscription box, often called month club like the book of the month save time and money within the supply chain.

Sure, the video went viral almost instantly, triggering the explosion of the subscription box businesses from beauty products to contacts. From Graze and Ipsy to Try The World and Birchbox. Subscription boxes with coupons help cross-sell or up-sell their products or partner products.

Stats say that, since 2014, the subscription service market has grown by an astonishing 890% per year.

So, why are these services so popular among customers? Most importantly, how do you start your own subscription box business and stand out in the competitive market?

Let’s find out!

subscription box

The Popularity of Subscription Boxes Lies in the User-Centric Approach

Online customers love personalized content. It proves to them that they matter to your brand as individuals.

Subscription box brands take personalization to the next level as many of them are designed for a specific group of customers. For example, JC Penney markets to men that are buying big sizes. Some of these brands even provide a quiz for new users to understand their personalities, buying habits, needs, and preferences.

Above all, subscription boxes appeal to brand agnostics; people that don’t know what they expect from brands and are not loyal to any brand in particular. As such, brand agnostics are more likely to choose subscription boxes and get surprised, meaning that this could be an exceptional customer acquisition technique.

best marketing plan template

How to Start a Successful Subscription Box Business

Given the stats mentioned above, it’s obvious that getting on this business trend can be profitable. However, to succeed you need to do your research and strategize your business plan step by step. Here are the most important things to consider when launching a subscription box business.

Explore Different Business Ideas

Similarly to any other business, your ideas and brand concepts impact any further decision you make, from the choice of logos to your marketing efforts. So, first do some brainstorming and ask yourself questions like:

  • What am I passionate about?
  • Does my idea have enough supporters?
  • Are there any influencers on this topic that would help me promote my brand?
  • Who are my major competitors? Is there anything they’re doing wrong? How can I use their mistakes to my advantage?

Most importantly, you need to think about different types of subscription box businesses. For example, will you curate products that align with your brand concept and create a strong subscriber base?

Maybe you would rather sell products under your brand name?  The choice of the right subscription box business model depends on a variety of factors, from your target niche to your initial investments.

Analyze Your Market

Having an awesome business idea is crucial, but you also need to make sure it’s profitable. This is why you need to research your target market. Ask yourself how big the market you’re targeting is. Is there already someone offers subscription box services for similar products? If so, how many businesses will you compete with?

You could use the Cratejoy marketplace to analyze your target niche, see what boxes are popular right now, and identify what’s missing. As the subscription box niche is evolving at an astounding pace, you need to assess your chances for succeeding before you even launch your business.

Next, you need to get to know your target audience. For example, did you know that women account for 60% of online subscriptions, while men usually have multiple subscriptions?

Age also matters. Stats say that the majority of ecommerce subscribers are between 25 and 44 years. This only tells us how important target audience segmentation is. Analyze their demographics, interests, hobbies, needs, and problems to make sure that your subscription box service resonates with them.

subscription marketing audit

Bring Your Brand Ideas to Life

Once you do your research, come up with the right business model, and give your subscription box business a name, it’s time to build a solid brand around it.

For starters, experiment with your logo. Whether you’re hiring a freelancer, working with a digital marketing agency, or using some simple logo design tools, you need to make sure your logo is authentic, simple, and memorable.

Then, choose a prototype of products you would like to feature in your boxes and start experimenting with their packaging. For example, use different types of boxes and fill materials to see what works for your audience. Try to keep your boxes as small as possible in order to reduce the shipping rates.

Most importantly, you need to build hype around your business. Take product shots to keep users interested. For example, you could take a photo of a closed box and then document the different stages of unboxing. You could even create detailed videos of product unboxing.

Set up Your Website

Your website is the backbone of your subscription box business. When designed properly and optimized for search engines, it gives you incredible online visibility and helps you put yourself in front of the right audiences.

Most importantly, it serves as your online ID in the overcrowded digital marketing landscape. It helps you inform your target customers about who you are, what makes your services special, and convince them to buy from you.

Your website should also have an awesome blog where you would share high-quality content. Valuable articles, infographics, checklists, and eBooks are an amazing way to engage your target audience, build trust with them, and convert them into leads and, ultimately, sales.

Finally, you should be on a popular all-in-one subscription marketplace. For example, Cratejoy helps subscription boxes get noticed by a larger number of people. By creating your pre-launch web page there, you will be able to communicate your business idea, build buzz around it, and grow your email list almost effortlessly.

websites subscription boxes

Ensure Your Site is Ready to Accept Sales

No matter if you’re building your own website or using Cratejoy to build your online presence, your goal is to familiarize customers what your subscription box brand and inspire them to complete the purchase. Here are a few steps to take:

  • Choose user-centric billing methods. By offering multiple payment methods for your recurring billing, you will simplify the checkout process, increase customer satisfaction, and guide them down the sales funnel. Instead of collecting and documenting dues yourself, you should automate your recurring payments. Subscription payment platforms usually offer a combination of recurring and one-off payments, allowing direct debit solutions, as well as online payments and credit cards. Most importantly, they will handle late and failed payments for you, as well as help you track your financial performance in real-time.
  • Consider pricing and shipping. Do your research and determine whether the shipping fee will be included in the price of the box. Or a customer will need to pay it on top of the box price. As the cost of shipping is calculated by the box weight, you don’t want to include lots of heavy items in a box. Also, ask yourself where your subscription box will be sold? Will you sell it locally or even ship it internationally?
your marketing iq

Promote Your Subscription Box Widely

Once everything’s ready, you need to spread the word about your subscription box.

In addition to investing in SEO to grow your Google rankings and growing your email list, you should also pay special attention to social media and influencer marketing.

Statistics say that the majority of your customers don’t trust branded content anymore. Instead, they rely on online reviews when making purchasing decisions.

That’s why you should build an online community and ask your early users for feedback. Use negative comments to understand the main problems users face and improve your services in the future.

You should also connect and work with renowned influencers in your niche. Getting them to unbox and review your products in a video will not only boost your online visibility but also build trust with your target audience.

subscription marketing plan

Conclusions

The subscription box industry is flourishing and there’s a plentitude of opportunities for new sellers to join this trend. However, to get the most out of it, you need to build a detailed business plan. Think outside the subscription box (joke intended) and do the prep work.

Brainstorm and contextualize your business ideas, research your market, choose your billing methods, and build a solid brand around your subscription boxes business. Above all, invest in a solid digital marketing strategy and promote your subscription box widely.

We’re listening.

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Elaine Bennett, Digital Marketing Specialist, is a marketing specialist and a blogger, currently based in Sydney. Topics that she covers include marketing, branding, entrepreneurship, and SMBs. She’s especially interested in social media and technology. Loves coffee, music and video games.

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