You know the feeling. Opening a surprise package that you found at your doorstep, unbeknownst as to what could nest just under the cardboard and tissue paper.
It’s a sense of excitement, and it’s addicting. Thus, the subscription business model was born, striving to recreate the same pleasure every month when customers would get a box of goodies chosen just for them.
It worked. The subscription commerce industry has exploded since its inception in the last decade. Google Trends compared online news story headlines featuring the search term “subscription box.” In September of 2007, there were four; this December, the number has skyrocketed to 100 headlines.
Subscription Commerce Insider notes popular subscription box companies have raked in the dough—and a fat stack of customer loyalty—since their beginnings. Dollar Shave Club, whose success increased after a viral online video, has raised $147.8 million. Birchbox, whose boxes contain sample beauty products, has brought in at least $71.9 million.
Get In, Stay In
Subscription businesses can provide everything from literature and exotic food to vegan beauty products and designer clothing. But when it comes to the subscription industry, the only thing more difficult than penetrating the market is keeping your company afloat.
Fortune noted the site Hello Subscription, an online directory that features 1,940 subscription box services, lists several as already being closed, signaling what may be an ongoing trend should the current rage of subscription commerce die down.
Yet while the severity of running a subscription business amidst competition and stringent demands for customer satisfaction places entrepreneurs in a tough spot, it may have just gotten even harder.
Retail dominants Walmart and Amazon have stepped into the mix, bearing the logistics and structure to easily pull off subscription services. Amazon has already begun delivery customization of tunes with its Amazon Prime Music Service. Walmart has launched baby and beauty sample boxes.
The Irreplaceable Customer Connection
Giants may be trying to stomp on the village, but there’s one element customers want that’s hard for companies like Walmart and Amazon to imitate—emotional connection.
Part of the joy of getting a subscription box is the conscientiousness that comes with it. The carefully chosen products, the intricately packaged style and the passion behind the company’s goal.
If big-box stores replace care with standardization, original enthusiasts of subscription commerce may reject, perhaps causing the emergence of a new customer target market for chain-store subscriptions.
Some may expect the fad to decline in a few years. With larger stores entering the parade, it may just be getting started.