The Radical Growth of the Subscription Box Industry in eCommerce

4 min readOct 10, 2021

Over the past few years, there has been a significant increase in subscription boxes. Consequently, the global consumers can be said to be Subscription Nation. From Netflix to Spotify, health insurance, mobile phone plan, and lots more, we now depend on subscriptions to run many essential things in our day-to-day life. Although subscription boxes are relatively new introductions, they are already having a great impact on eCommerce.

Based on the data from Fuel by McKinsey, the sector has an estimated worth of around $10 billion. Notably, this figure doesn’t take the “subscribe and save” package of Amazon Prime into account. Many of the key players in the subscription eCommerce market have only been around for a few years. Besides, the majority of the subscribers in the industry have two or more subscriptions. Therefore, after enjoying the convenience and ease provided by the subscription box, most subscribers are always willing to continue using it.

What is the psychology behind subscription boxes?

In 2018, McKinsey & Company researched subscription box companies. According to the study, these companies can be grouped into three — replenishment, curation, and access.

The essence of Replenishment is to offer convenience. According to the study, about one-third of the subscribers are using subscription boxes because of this purpose.

Now, let’s talk about Access. Only 13% of the subscribers are using the services because they want to take part in the community and also enjoy bonuses. In many cases, you can only get access to some items if you are a subscriber. Therefore, these individuals are ready to subscribe to enjoy a discount.

However, the majority of the subscribers fall under the category called Curation. These people are hooked to the subscription because they would like to be surprised. Also, they always anticipate the process of unboxing and getting to know more about the product.

Businesses making loads of money with the subscription box model

According to data from Hitwise (via Forbes), numerous subscription websites are getting tons of visitors through this new model. The biggest gainers include Blue Apron, Hello Fresh, Stitch Fix, Home Chef, and Dollar Shave Club.

Over the past 5 years, there has been a two-fold increase in the value of the online subscription market. Based on the finding of the McKinsey study, the largest sites in the market gained over $2.6 billion in 2016. This was a massive figure considering that the value was only $57 million in 2011.

But what are the main advantages of a subscription model for businesses:

· Frequent revenue

Other types of eCommerce stores usually struggle to have an idea of how much they will make each month. But this is not the case for a subscription business. The model allows businesses to accurately predict what their monthly sales will look like. Expectedly, a subscription business is not entirely immune to a churn rate, but it is not as common as other eCommerce stores.

· Personalisation of services

When customers can sense some sort of emotional connection to their purchases, they are likely to be more loyal to the brands involved. Fortunately, subscription boxes provide personalised services to each customer. Consequently, customers are encouraged to stay loyal.

· Accurate inventory

With a subscription box, it is easier for businesses to know the specific number of products they have in stock. This provides a competitive advantage to them.

· Built-in advertising

Each box comes with a large, well-placed logo. This logo serves as the perfect opportunity for businesses to market their products. You probably would have noticed this in some of the unboxing videos available on YouTube.

How to run a successful subscription box e-commerce business

If you want to run one of the best UK subscription boxes, you should master the following tips:

· Make sure you select a sector that doesn’t have too much competition. By doing this, it will be easier for you to offer something unique to the customers.

· Generally, lots of customers are subscribing because of the surprise and anticipation they get from the services. You should consider offering items that will bring about surprises and anticipations to your customers.

· Use affiliate marketing to draw traffic to your subscription boxes. Here, you may want to work with influencers who can give your products more exposure.

Based on projections from various experts, the subscription box business will continue to grow as its potential is huge.




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