While the numbers are never absolute, there are in excess of 60 different subscription boxes available to Australian consumers, and it is growing. At the time of writing this post, there are another two new consumer boxes that have launched in Australia in the past week. According to “Hello Subscription” there are well over 1800 consumer subscription boxes globally.
Everything from Women’s Fashion and Beauty, to Men’s Styling, Children’s and Baby Ware, Dry & Fresh Food, Health and Pet products are just a few categories available for you to subscribe to. The choice is endless and there is no doubt that e-commerce and online retailing has created a new segment in the market.
According to IBISWorld the courier pick-up and delivery service is worth an estimated $4bn, so it is no wonder that Australia Post has looked to re-invent its whole business model and companies like Toll have invested significant sums in state of the art parcel processing facilities.
The market is moving at pace, and this has caught many Fast Moving Consumer Goods companies off guard, as they struggle to understand where this new wave of consumer marketing fits within its traditional business model. In many cases, these companies are unaware that their brands are even being presented in these boxes due to some providers sourcing products from 3rd parties or clearing houses.
Consumers are willing to spend anywhere from $10 to over $50 for a regular box of goodies delivered to their door, but what is the real benefit of these services outside of product awareness.
As a brand manager, you could argue that we are directly engaging with consumers and we all know that purchase intent goes up with trial. There is no doubt that these boxes can offer more than a static advert, and in some cases these programs are backed up with consumer research and insights.
Having subscribed to a number of these boxes, there are however a number of shortcomings.
1. The fact that I am paying for a regular subscription means that I am under no obligation to provide feedback, to continue the service.
2. Once the initial excitement wares off and the trial is over the next obvious question is where can I buy this product.
3. In many cases the products are repetitive and in some cases the lines presented have been discontinued, creating frustration and disengagement.
This is supported by a Nielsen report "HOW SHOPPERS LOOK, WATCH AND LISTEN FOR NEW PRODUCTS" GLOBAL | 20-07-2015", indicating that in relation to earned advertising, consumers consistently rated "Saw it in a store" high at 48%, and "Received a free sample" in decline at 31% (-25% 2012).
The out-take in all of this is that consumer subscription boxes are here to stay, and sample programs like this need to form one part of any companies overall sales and marketing strategy. Brand control will become a bigger issue for those companies choosing to ignore this trend and equally important is the retailer focus, as evidence indicates that consumers still find out about new products in-store.
Stock Box is not a consumer subscription program, as we are a B2B service focused on independent retailers. We are different as we believe in giving suppliers a voice and retailers a choice when it comes to fast moving consumer goods.
We are committed to help every member grow their sales one product at a time, and create a route to market for all suppliers looking to support independent retailers.
Thanks for reading
Craig Matthews is the MD of Stock Box, with over 30 years industry experience in retail development, specialising in independent retail programs.