Pulp Magic

JUNE 6, 2017

Subscription Box Industry is an Increasingly Bigger Player in the New Retail Landscape

A week doesn’t go by without hearing about the changing face of American retail, including the demise of long-time American shopping institutions like Sears, or shrinking retail footprints like Macy’s and Wal-Mart.  Exactly where this is all leading is a bit uncertain.  One thing that is certain is that the $420 billion U.S. subscription market is a significant and growing economy in consumers’ changing preferences for how they want to consume goods of all kinds.

Industry experts have even coined the term, “subscription economy,” to describe the significant impact on retail that subscription services have had on consumption. As an industry overall, subscription companies are growing 9x faster than Standard & Poor’s (S&P) 500 and 4x faster than retail.  Today, America has 5.7 M subscription box subscribers.

Additionally, subscription box companies have enjoyed an 831% increase in website visits since 2014. Furthermore, subscriptions box websites are receiving upwards of 40 million unique visitors each month.

Subscription box companies span a wide variety of industries, appealing to several audiences. Share of market breaks down as follows:

    • Beauty (35%)
    • Food (33%)
    • Apparel (16%)
    • Lifestyle (12%)
    • Kids (2%)
    • Pets (2%)

The pet and lifestyle sectors are the fastest growing segments, with a 3,000% increase in pet-related subscriptions since 2014.

The subscription trend is spreading into traditional printed magazine publishers like Allure, and online content media hubs like PopSugar, who are diving head-on into creating curated, personalized customer subscription box services consistent with their reader base’s interests. They see the box service as a new revenue stream and a means to directly connect with their customers.   Subscription Boxes

So what does this mean for the packaging industry?

It means that these modern-day direct marketers and purveyors of specialized goods are looking for unique personalization and customization options, along with high impact graphics, to stand out from other boxes on consumers’ doorsteps and enhance the consumer experience.  In addition, subscription box companies need to offer alternative uses for their boxes, after they have safely delivered their contents. They also need to encourage consumers to break down and recycle the boxes they are using to ship goods – with recycling messaging signage and steps.

Because more and more goods are being delivered directly to consumers, they will likely be looking to reduce the amount of packaging needed to ensure the safe delivery of their products.  A short survey of Subscription Box Summit conference attendees prior to a panel I was recently on about the environmental impact of boxes suggested almost half offered no information to their subscribers about recycling and/or sustainability.   Working through their newly minted trade association, the Subscription Trade Association (SUBTA), we have an opportunity to encourage subscription box companies to participate in our mission to get back every box that will not be reused by sharing simple recycling tips with their subscribers.   Conference attendees were interested in our message!

Given the curated, personalized customer experience these new world-wide subscription retailers are providing, this is a very important group of emerging industry customers, today and in the future, to plug into conveying all the traditional branding and protection features of our products, coupled with an important sustainability message.