Box services, a new type of service provider, understand that feeling you get when you receive a package, sent just for you, in the mail.
In our article on Cloud Service Providers, we discuss the growing options consumers and businesses have when it comes to hosted services. You probably use these services on a daily basis, whether it’s infrastructure as a service (Amazon), music as a service (Pandora, Spotify), or software as a service (Office 365, Adobe Creative Cloud, Oktopus).
Far from conventional, but fitting into the “as-a-Service” mold, companies like Birchbox and Dollar Shave Club have paved the way for subscription-based eCommerce in the retail industry. We call this model Consumables as a Service or CaaS. At a fixed price, subscribers sign up to receive boxes monthly. These boxes include products either hand-picked by the company itself or chosen by subscribers. Though recurring deliveries and subscriptions outdate most shopping methods — upgrades in ecommerce and digital marketing make the consumables-as-a-service model a refreshing option for consumers.
Birchbox, which launched in 2010, primed the market for what has become an explosive trend in retail ecommerce. The beauty and lifestyle box service boasts over 800,000 active global users and $96 million in annual sales. It’s an affordable option (ranging between $10-20 monthly) that attracts consumers who crave convenience, quality and variety.
Everyone loves a well presented gift, especially from a trusted source who can personalize it to your taste. And, this service type taps in to that universal love of surprise! By making use of social media, online engagement, customization and customer feedback, companies like Birchbox have risen to the opportunities the online subscription model presents.
As with many successful brands, loyalty comes from what the company offers outside of the products themselves. Sure, Birchbox sends quality products every month. But, the service encourages continued interaction by offering an online resource for subscribers.
Store: If you loved the sample you received in last month’s box, Birchbox’s online store offers full sizes of the products. Plus, each product has substantial reviews because a large user base is actively “testing” products as they’re introduced.
Magazine/Blog: Catering to male and female subscribers, Birchbox also publishes two monthly magazines with beauty and grooming how-to’s, trends, recipes and videos.
Social Media: These add-ons translate well on the service’s content-rich social media sites. Users can use their favorite social sites to give product reviews, share snapshots of their favorite products or simply stay updated on Birchbox news.
Finding a Niche
The CaaS model is flexible in that it applies to many product types, customer interests and demographics. Offering lifestyle products for both men and women, Birchbox appeals to a wide audience. The Dollar Shave Club, and even large retailers like Amazon and Target, have also successfully targeted a broad subscriber base. They differentiate through price, convenience and loyalty programs. But, the Consumables-as-a-Service Model has taken off for niche companies as well. Much like those uncannily accurate Netflix entertainment suggestions, there are subscription boxes for every interest. Here are a few:
- Music buff and foodie who likes to entertain: The Turntable Kitchen pairs premium ingredients, seasonal recipes, vinyl and mixed tapes from upcoming artists in a monthly box perfect to the adventurous entertainer.
- Travel junkie with a busy schedule: Escape Monthly offers subscribers a “vacation in a box” with luxury products, snacks and books inspired by travel destinations.
- DIY’er interested in projects around the home: The Handy Box delivers monthly boxes filled with tools and gadgets for home fixes, ranging from batteries to staple guns.
As we’ve mentioned before, the modern customer is the informed customer. They research the alternatives, know their brands and increasingly expect a tailored, personal experience at every touch point. Box services like Julep Maven have started differentiating themselves by forming a customer profile based on interests, style and preferences at that first touch point.
When a new customer clicks to start their subscription, Julep quizzes them to build a “style profile” and helps them choose a customized Welcome Box.
This information is helpful at the company level, because data relating to customer behavior is generated from day one. It also offers a buffer for customers, who have greater control over the element of surprise that comes with a varied subscription.
Consumables-as-a-Service companies have taken the concept of subscriptions and made them cool again by applying it in a modern way. The successful box brands keep up with evolving marketing channels to offer a service that’s truly unique.