Since the pandemic hit the world, customers have preferred to shop online and stay indoors. With a monthly subscription service, people have found a new way to feel special. The best subscription boxes not only bring a smile to the customers’ faces but it is a great way to practice self-care.
Beauty products, pet stuff, food samples, and grooming products, whatever it is, you see people opting for subscription fee services. Why?
Because the idea of subscription boxes is simple yet amazing. Moreover, the rising trend is beneficial for brands, so they also offer high-quality monthly subscription boxes to make their customers feel valued.
Today, shoppers look for a smooth shopping experience. The curated boxes make online shopping simple and exciting.
Subscription boxes usually have items handpicked, which makes them special. It is unique because someone else curates them for you.It can be a great gift idea.
The global subscription box market size reached a value of USD 26.9 billion in 2022. During 2023-2028, the market is likely to grow at a CAGR of 18.4%, reaching a value of USD 74.2 billion by 2028.
Looking at this figure, many brands have invested in giving their customers a personalized experience. It is a great way to increase sales and connect with customers at a personal level.
If you want to know how custom subscription boxes improve sales or how you can invest in the idea, look no further. With this guide, you can learn more about subscription boxes from Arka’s perspective and capitalize on the customer experience.
Table of Contents
1. What is a Subscription Box?
2. How Does the Subscription Business Model Work?
3. Categories of Subscription Boxes
Replenishment subscription boxes
Curation subscription boxes
Access subscription
4. How Do Subscription Boxes Boost Sales?
Decreases buyer’s remorse
Builds anticipation
Builds customer loyalty
5. 5 Key Areas for the Success of a Subscription Business Model
Package offerings for growth optimization
Provide a seamless experience
Seamless financial model
Predictive financial model
Optimization for growth
6. Types of Subscription Boxes
Shaving supply subscription boxes
Beauty subscription boxes
Dog subscription boxes
Snack subscription boxes
Coffee subscription box
Comic books/book subscription boxes
Wine subscription boxes
Hand-made goods subscription boxes
Clothing subscription boxes
Kids subscription boxes
Baby subscription boxes
7. Designing a Perfect Subscription Box
Create a custom experience
Eco-friendly packaging
Reliable packaging supplier
Custom boxes
Mailers
Choice of colors
Custom message
Tell your brand story
8. Benefits of Subscription Boxes for Business
Attract new customers
Fosters connection
Introduce new products
Predicts revenue
9. Wrap-up
10. Frequently Asked Questions (FAQs)
How does a subscription box work?
What products can I keep in a subscription box?
Why are subscription boxes so popular?
What is a Subscription Box?
A subscription box carries goodies and full-size items and delivers them to customers on a regular basis. The subscription can be between three months to six months or even more.
Customers can opt for different product boxes like hair care, skincare, themed boxes, beauty products, pet boxes, etc. There are also themed boxes for special days.
Creating your subscription box is fun and gives customers a chance to have a personalized experience. The idea is amazing, and the subscription fee varies from product to product. It is a great way for brands to introduce new products they want their customers to try.
Once customers have signed up for the subscription, they receive a range of products weekly, monthly, or quarterly.
Subscription boxes work as the best gift ideas. It is hard to find a gift, but with a subscription box, it becomes a thoughtful and special gift. If you do not know someone that well or want to make the special day for your loved ones even more special, subscription boxes are always a safe bet.
It is amazing that someone else curates the products for you or your loved ones and packages and delivers them. It builds anticipation when customers receive the notification that the package is coming.
The anticipation with which customers wait for their package makes it special for them. Even when the occasion ends, the gift will keep reminding them of those unforgettable moments.
Subscription boxes are a great way to improve sales. As a brand, consider it an opportunity to connect with your customers and offer them more. Let us find out how.
How Does the Subscription Business Model Work?
The business model of a subscription box works by providing goods and services to its customers regularly for a fixed fee. As it is beneficial for both customers and businesses, it has become popular.
It is an opportunity for businesses to have a stable income where customers sign up weekly, monthly, quarterly, or yearly for different products and services. As customers are locked in, businesses can try to impress them with their extensive catalog.
In addition to this, it is also a great opportunity for businesses to build customer loyalty. Once a customer gives you business and returns for more, it guarantees referrals and recurring income.
Businesses can better understand their resources and forecast cash flow for growth.
For customers, however, it is a different story. They get to shop online in exchange for a fixed fee and get a different range of products from the comfort of their home. Subscription boxes also come with discount offers which customers gladly accept.
Convenience and novel experience are the main driving forces when customers signup for a subscription box service.
Categories of Subscription Boxes
Businesses can build loyalty and interest through custom subscription boxes. There are three categories of subscription boxes; replenishment, curation and access. Each category comes with its specific features with the goal of keeping the interest of customers intact.
Each category avoids the monotonous look and feel of the box, which keeps it interesting. Receiving the same type of box repeatedly takes the charm away. Offering more and different gives you an edge over competitors, where customers stay with you and explore more.
Following are the details of the categories of subscription boxes so businesses can incorporate them to give a better experience to their customers.
Replenishment subscription boxes
In this category, the customer receives the same order regularly. They do not need to renew the subscription or place a new order. This model type works best for businesses with high-use frequency items like pet food, beauty products, etc.
One of the main advantages of these boxes is that they lock in the customers and give you repeat business. Customers do not feel the need to explore more options (your competitors) which work in your favor. It is a great way to build brand loyalty.
Timely shipping and outstanding delivery service are pertinent for the success of subscription boxes. The last thing you want is for your customers to wait longer than the expected delivery time.
For this reason, you can outsource it to a 3PL with subscription fulfilment services. You can create a branded packaging experience for your customers.
At Arka, we also specialize in custom subscription boxes that let you create a memorable unboxing experience for your customers. You can add custom inserts to increase customer loyalty and provide value.
Curation subscription boxes
Unlike replenishment boxes, curation subscription boxes are recurring shipments, but the products change with each delivery. This type of subscription stores a surprise in each box that keeps the customers interested and kills monotony.
Curation subscription boxes give leeway to businesses where they can curate the products depending on the price and availability of products.
With the curation business model, businesses have to be more vigilant, and they might encounter fluctuation in demand as the products change with each delivery. As a brand, you have to be careful about inventory management.
With replenishment boxes, inventory management becomes easy as you just have to know the number of active subscriptions.
The curated subscription is hard as it requires handpicked items and meticulous curation. In such a case, involving a 3PL service can be expensive; making all the arrangements in-house is better.
If there is only one item in the box, like coffee or book of the month, it becomes better and inexpensive to manage.
Curation boxes give you all the room to design the box so you can impress your customers and provide them with a branded unboxing experience. If the products are apparel, food, or beauty related, you can design a custom box that suits your customer’s needs.
Personalization may become the company's revenue source, so businesses should pay attention to it. It also helps customers understand that the brand cares about their preferences and make them feel valued.
Access subscription
Curation and replenishment subscriptions are about physical products (full-size products), but access subscriptions are digital services. Famous brands like Netflix, Spotify, Amazon, etc., are access subscription services where customers pay a monthly fee to get access to the content.
These services often offer a trial period where customers can enjoy the content for free for a certain period. If they like the offer, they can stay with the service after the trial period is over.
There is no long-term commitment, and they get enough time to test the service. If they do not like the content, they can cancel the subscription or take a break from the content.
Some brands offer different alternative services that help customers stay. However, no one likes to be forced into commitment. So it is better if brands use this strategy carefully.
How Do Subscription Boxes Boost Sales?
The E-commerce market is a competitive business. From small businesses to big ones, each brand tries hard to make its firm place in the arena. Packaging plays a vital role in impressing customers, and subscription boxes are one of the ways to allure them.
It gives customers an easy way to have a personalized experience where they can pay a reasonable amount and get access to their favorite goodies. Not only this, it also gives them a chance to try new products from their favorite brands.
Items like home decor products, skincare products, gluten-free edibles, coffee subscriptions, food subscriptions and clothing subscription boxes can be great for gifts and personalized items. It helps businesses boost sales and stay relevant in the market.
In this section, we will tell you how subscription boxes boost sales.
Decreases buyer’s remorse
Consider this, you have a wide range of products, and as a customer, you would like to try each one. If customers have too many choices, they eventually lose interest and decide not to buy. Or they indulge in buyer remorse by purchasing items they do not need.
A subscription box works best as it offers more to customers. As you curate the items for them, it eliminates the risk of buyer’s remorse. They try every product and will likely return to you to explore other options.
It is easier for customers, saving them both effort and time. Subscription boxes are your chance to build a lasting relationship with your customers. It is a way to earn constant revenue from existing customers.
By introducing monthly subscription boxes, you are building excitement and anticipation for your customers, a vital part of a customer’s fulfiment journey.
Builds anticipation
Talking about anticipation, think back to when you got home, and a package was waiting for you at your doorstep. Though you knew what you had ordered, you must have felt thrilled and excited at seeing the box.
A personalized experience is imperative to 28% of access and curation subscribers. Building positive anticipation helps businesses provide a great experience to their customers. Customers feel great excitement and are likely to remember your brand.
The idea of convenience and novel experience usually drives customers to sign up for a monthly subscription box. Big brands like Amazon and delivery services make it easy for them to order and enjoy the contents of a package.
Scentbird is a monthly perfume subscription service that surprises customers with new fragrances and has a wide range of accessories. The products in the curated box are selected from popular brands, keeping customers' specific needs in mind.
Services like these help businesses build anticipation, and they can capitalize on it by making it even more desirable and fulfilling.
Builds customer loyalty
Providing a personalized experience to customers help brands build customer loyalty. A subscription program allows businesses to know customers’ preferences, and they can design a strategy around it.
87% of Americans are willing to have various details of their activity tracked in exchange for more personalized rewards and brand experiences. They trust the brands and are likely to share any personal preferences that might help them improve the experience.
A good loyalty program also encourages customers to recommend their favorite brands. Customer retention also plays a huge role where brands can invest into resources to keep the customers.
So, new books, box for coffee lovers, recipe cards, play kits, face masks, or beauty subscription boxes; whatever you are offering will help you build customer loyalty. In return, businesses can see their revenue increase.
5 Key Areas for the Success of a Subscription Business Model
As a packaging expert, we will dig deeper into the areas that need your focus when building a subscription model. Each area is critical and has its requirements. We will provide an overview of key areas to focus on so you do not miss out on anything.
Package offerings for growth optimization
This area is all about how you, as a brand, design, offer, package and price your subscription boxes.
Devising an effective marketing strategy to let the word out on your offerings lets you reach customers. It also helps you stay ahead of your competition.
To succeed in the e-commerce business, especially the subscription business, you must offer desirable high-quality products. It should focus on the customers and make them feel valued.
Pricing and budgeting are other areas that need your focus. You need to make sure that you are considering the essentials before going all out in the market. Moreover, you also need to offer products that align with your customers’ needs.
Promoting your products is another key feature that needs your attention. Ensure you reduce launch time and quickly go to the market while building anticipation. Today, many ways can help you reach potential and existing customers.
Moreover, keep revising and changing the pricing and product range to keep your customers entertained. Finding a balance between the two lets you design the best subscription boxes and retain customers’ interest.
Provide a seamless experience
As the term suggests, this section is about creating a convenient, seamless and smooth experience for the subscriber.
Put yourself in your customers’ shoes and rate the subscription service you use, or better, rate your service.
You should ask yourself a million-dollar question.
Does the subscription service provide a smooth experience to the subscribers?
A customer-centric service focuses on the ease and convenience of the customers. Make it easy for your customers to signup for a service.
They should be able to renew or pause the subscription and change or add services. Have a hassle-free payment method.
Brands that make every stage of subscription easy for their customers can provide a seamless experience. They give a memorable experience to their customers that encourages retention and promotes business growth.
You can optimize the signing-up process so customers can access your services easily. Keep track of your customers’ activities and monitor their engagement.
As a brand, your work does not stop with delivering the package. The post-delivery phase is equally important as it helps you learn more about your customers. You can connect with them and see how they like the product.
The data collected from this communication can be very helpful in designing future marketing strategies and offerings.
By enabling different payment methods, you will not restrict your customers and will help them adjust their payment methods.
Adding payment methods like PayPal, Apply Pay, direct debit, etc., allows your customers to have a seamless experience. If your customers belong to different regions, they can adjust the payment method accordingly.
In addition, make sure service renewal is easy for your customers and they find it easy to follow the steps. Customers should be able to upgrade and downgrade services easily.
Seamless financial model
This section covers the financial side of the business and how you design the model that gives you recurring payments.
As subscription e-commerce is based on a long-term customer relationship, you must build a flexible revenue model that offers ease. Subscribers make many changes throughout this long-term relationship; you must ensure that invoice and billing information are accurate.
Similarly, if dissatisfied customers need a refund or service credit, the subscription business should issue a credit invoice or memo. If you introduce promotional credits or discounts to retain customers, it should be easy for customers to use them.
An automated billing system works best in businesses that issue refunds and credits and manages all other transactional scenarios. By reducing the time of transactional activities, you can have happy and satisfied customers.
Predictive financial model
As a subscription business model is based on recurring payments, businesses can predict revenue easily. It makes it easy for businesses to assess their financial standing and receive payment.
A subscription business's success depends on the financial model you have built. The recurring model should have a record of active subscribers that can tell you how much you will receive it.
In addition, a smooth financial model helps you design a business strategy and factor in the budget. It will help you in assessing the company’s resources.
You can predict the revenue and develop a better business strategy.
Optimization for growth
A business that evolves and takes on any challenge that leads to its growth is agile. Before you go all in and make big claims, ensure your business is ready to take on the challenge.
Make sure the framework is flexible and not too rigid. There should be ease of integration, and the changes should support the growth of the subscription business. Otherwise, you will have a hard time incorporating new changes.
By increasing automated workflows, integrating key systems and making the overall framework simple, you can optimize the business for growth.
As a subscription service provider, your business needs your utmost attention to keep it running. Businesses can ensure growth and success with optimized areas and a smooth framework. These are some of the key areas that need your focus.
Types of Subscription Boxes
The subscription service business has many types of subscription boxes that have gained popularity in recent years. Whether skincare or self-care products, themed boxes, etc., each box has value and charm for the customer.
The first box of a customer is the most important purchase, and the handpicked items put it among the best subscription boxes for them. You can take this opportunity and build on the customer’s excitement.
Following are the types of subscription boxes that businesses can consider for sales and growth.
Shaving supply subscription boxes
It might surprise you, but shaving subscription boxes are popular and in demand for both men and women. Since shaving supplies are needed throughout the year, people find it easy to sign up for a subscription service.
As a business, it becomes easy to curate the items and provide supplies to the customers. The supplier can avoid paying for the warehouse and send products through dropshipping.
Beauty subscription boxes
Another popular type of subscription box is the beauty-curated box. It is one of the biggest subscription business industries that is booming. Skincare products, self-care and grooming products are always in demand.
The makeup industry curates products from big brands. This gives a chance to customers to try different high-quality products. It only makes sense to curate such items and send a bundle to your customers to make them happy.
Not only big brands but lesser-known brands also find this lucrative industry in their favor, allowing them to reach many people. Beauty subscription boxes are carefully made and are likely to impress customers.
Dog subscription boxes
The pet industry is another lucrative business for subscription service business. Dog subscription boxes, in particular, have high demand. Many big dog food businesses use the monthly subscription service for food, toys and medicines.
From grooming products to training essentials, customers can find many useful products. With a subscription service, they do not have to go out and hunt for products. They can get the required products delivered to their doorstep.
Snack subscription boxes
Snack subscription boxes allow customers to enjoy their food without making an effort to cook them. There is a variety of snack options that subscribers can find.
Moreover, the food industry is a fast-growing business. Businesses that know their customers' likes and dislikes can build on this area and provide a delightful and satiated experience.
Customers can choose their favorite healthy snacks. It makes it easier for parents to choose after-school snacks for their children. Adults can also get their favorite snacks for the office.
Coffee subscription box
Coffee is among the most desirable drinks and is liked by almost everyone. Coffee lovers try new flavors and sometimes signup for subscriptions to get them regularly. Since people drink it daily, signing up for the monthly subscription only makes sense.
A coffee subscription box is a great gift idea. Some brands also offer coffee of the month that allures customers. So, make sure you make the best use of this box.
Comic books/book subscription boxes
Avid readers find it best to signup for a subscription service that lets them read books of different genres. Children who love comics also signup for this service so they do not have to miss anything.
These curated boxes have a big impact on the industry and customers. As a business, you can introduce it to your subscribers to boost sales and customer loyalty.
A book-of-the-month subscription box also keeps the subscribers excited and builds anticipation. It also creates a virtual book club that helps businesses easily curate books.
Wine subscription boxes
Monthly wine clubs are another significant part of the subscription box service. These services deliver wines directly to their customers. It is a great opportunity for vintners to put their brand across their customers.
Customers who like the wine can sign up for the service and enjoy a new succulent flavor every month. It can be a great source of regular income for businesses.
Hand-made goods subscription boxes
Hand-made products are gaining popularity, and people love to buy products that look antique and unique. Small businesses gain popularity in this niche market, and people like to buy these crafted goods.
If you have a business of hand-made goods, the e-commerce industry can help you reach customers and increase sales. Subscription service is also a great way to introduce your brand and build customer loyalty.
Clothing subscription boxes
The clothing subscription industry is fast-growing, and people love trying different products from their favorite brands. It gives them a chance to explore more products.
They are curated for the customers based on their preferences, so it keeps the value intact. It gives them a chance to explore more products.
Since this industry has much to offer, subscribers do not feel monotony. Based on their preference, subscribers pay a fixed amount and get to try different products in exchange.
Kids subscription boxes
A popular curated box that people like is the kids' subscription box. There are themed boxes that are made according to the age of the children. Based on children's likes, brands can curate toys, clothes, and other items, making the parents’ job easier.
From a business point of view, having a toy subscription box or a kids’ subscription box is a great start. Children will always love to play with toys, and parents will always like them to dress properly. If you offer a subscription, parents will not feel the need to go out and buy stuff.
Baby subscription boxes
Running for baby essentials whenever you need something can be nerve-wracking, especially if you have a newborn at home. Many subscription services offer kid-friendly products to parents to help them.
A baby subscription box contains non-toxic play products that help parents with their baby’s playtime. For 24 months, they get products focusing on their baby's development. It makes it easy for them to find reliable and useful items for their baby.
These are some of the types of popular subscription boxes. A subscription service-based business can never run out of ideas. You can introduce as many boxes as you want and satisfy your customers.
Designing a Perfect Subscription Box
Packaging builds loyalty and gives customers a branded experience. As a business, it is up to you to make the experience special for your customers and make them feel valued.
The look and feel of the box matter a lot. You are already halfway through when a customer signs up for your service. There is excitement and anticipation. With phenomenal packaging design, you can impress them.
Here you can find important features to consider when sourcing and designing packaging for subscription boxes from a packaging expert.
Create a custom experience
The charm of a subscription box is not only the contents. Custom packaging lets you impress your subscribers and give them a memorable unboxing experience. Packaging plays its role in creating a memorable experience.
Many themed boxes allow you to design an appropriate box for people. Subscription boxes for kids, women, men, newly married, etc. are all examples of custom packaging and carefully curated boxes.
Following a one size fits all rule, you might lose your customer base. The ultimate unboxing experience comes with custom packaging when customers want to repeat the service month after month.
Custom packaging with high-quality subscription boxes tells the subscribers that you have made an effort to make them feel valued and special. The fulfilment process makes it memorable and gives you repeat business.
Eco-friendly packaging
Customers today are more concerned about the environment and carefully choose products. They prefer brands that are transparent about the sourced materials. Eco-friendly packaging lets you create a space of mutual interest.
With eco-friendly packaging, you can attract more customers, and they can rely on you while placing an order. Some consumers are willing to pay extra for sustainable packaging, which is a clear sign for brands to use eco-friendly packaging materials.
Reliable packaging supplier
As a subscription box business, you must find a supplier that understands your packaging needs and has reliable turnaround times. At Arka, we ensure our clients are happy, and our subscription boxes let you create magic and impress customers.
Finding a reliable packaging supplier is essential as it will affect your business. We understand that each customer is different, and so are their needs. We design a box that speaks to your brand’s values.
Custom boxes
Your packaging is the first thing customers will interact with; external packaging is usually a deal breaker. How you design a box is important as it impacts the customer’s feedback. Make sure your packaging delights your customers.
For this purpose, custom boxes are a great way to provide a great experience and build a lasting impression. With Arka’s custom boxes, you can find a way to impress your customers and show off your products and brand.
The handpicked items become even more special if you offer them in a custom-made box. It lets you design the box freely, keeping your brand identity intact.
Mailers
A subscription box should be a perfect fit for your products. Flimsy packaging does not impress customers, and it might put them off. You might also want to consider mailers for products like clothing.
Mailers can be a perfect fit if your business does not offer full-size products. Arka’s mailers are customizable, so you do not have to worry about branding. Even with mailers, you can create a beautiful experience for your customers.
Choice of colors
Colors play a huge role in attracting customers' attention and creating a calming and delightful effect. It is also a way to help customers remember you. Each brand has its unique colors.
Whether you want to see a minimalistic color palette or go all out, the choice of colors should reflect your brand and story. Using too many colors might give a crowded look, so try to find a balance between the combination of colors.
Custom message
Inserting a personal note or custom message is another way to make your customers feel valued. It also creates a memorable experience where customers realize they get more than just the product.
A subscription box with a custom note like “Thank you” goes a long way and builds a personal connection with customers. As most of the action happens offline, you can help customers feel special with such custom messages.
Tell your brand story
Packaging should be consistent and have a cohesive structure that lets you create a magical customer experience. The packaging design must show your brand story and visually depict your values.
Benefits of Subscription Boxes for Business
A business that runs a successful e-commerce business can drive many benefits from subscription services. A subscription service business model gives a recurring payment. However, there are many other benefits that brands can get.
By adopting this business model, brands can benefit and thrive. Let us see what these themed boxes have in store for you.
Attract new customers
The subscription service business model helps you attract more customers. As it offers a wide range of customers, it allures people. With affordable prices, they can get some best subscription boxes which is the real charm.
Fosters connection
It is a great way to foster a deeper and more personal connection with customers. As the items are handpicked, it gives them a sense of value and delight. You become a trusted brand, and it helps you build customer loyalty.
Introduce new products
Subscription e-commerce is a great way to introduce new products to your existing and potential customers. If you want to get the word out, you can put the sample product with other popular products and let it create the magic.
Predicts revenue
Subscription-based business models help you predict the revenue, making it easy for you to make changes. You can predict the cash flow as it tells the number of active members and the average churn rate.
Wrap-up
Having a subscription business model help brands foster a deeper connection with their customers. It is a simple way to provide a branded experience, a backbone of an e-commerce industry.
At Arka, we provide a custom experience to your customers. Our custom boxes create a memorable unboxing experience that helps you boost sales and earn customer loyalty.
So, connect with us today and learn how we can help you up your subscription boxes packaging game.
Frequently Asked Questions (FAQs)
How does a subscription box work?
In a subscription business model, customers are charged a fee regularly, and in exchange, they get a product or service for a fixed amount of time. They can choose a fixed time period and sometimes customize the box.
What products can I keep in a subscription box?
You can keep any items or products in a subscription box. Following are some products that can go in there:
- Beauty products
- Coffee
- Skincare items
- Self-care items
- Gluten-free products
- Snacks
Why are subscription boxes so popular?
Subscription boxes are popular because they allow customers to explore different products. As they are handpicked items, curated boxes make them feel valued. It is convenient and makes customers feel special.
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