We talked yesterday about how to evaluate subscription businesses.
Fung Global Retail & Tech has published a good additional overview over the topic:
Subscription box services tend to fall into two categories: 1) exploratory and 2) replenishment.
Exploratory: This type of subscription service allows shoppers to try new products, selecting items on their behalf such as healthy, non-gluten snacks or samples of new-to-market cosmetics. Some subscription box services are about curating a variety of products across different product categories.
Replenishment: This service offers replenishment boxes for regularly used, routine products such as men’s shaving items. Many subscriptions are specifically tailored to the personal tastes of subscribers. Some subscription box services are backed by celebrities and magazines such as Allure and Men’s Health.
Already, there are sites acting as aggregators:
Mysubscriptionaddiction.com has over 1 million visitors monthly and counted 998 new subscription boxes in 2016, up from 284 new ones in 2013.
Monthly visits to top subscription box service sites increased by 3,000%, between 2013 and 2016, according to audience data tracking firm Hitwise.
According to UPS, 23% of online shoppers have signed up for a subscription box service to receive a predetermined set of products and 10% have signed up for a curated service, where products are selected on a personalized basis. The survey was conducted in January and February 2016 on participants that had shopped online in the previous three months.
In fact, expect the aggregation aspect to become more prominent. Amazon’s subscription marketplace is a prime candidate for this (pun intended). But others can rise here too.
As subscriptions grow in revenue and numbers, bundling them in a meaningful way for both consumers and companies will be a delicate act. But it will also be one that will be worth billions.
Here are some key drivers for the growth in subscription commerce, according to Fung:
Subscription boxes curate and cater products to personal preferences, and often provide personalization and customization options. […]
Automating recurring shipments for recurring purchases offers shoppers the convenience of not having to visit stores for mundane repeat-purchase items. This can be particularly appealing for consumers who lead busy lives or parents of young children, as well as some elderly people. […]
Subscription boxes provide discovery in a convenient and time-efficient manner. […]
Subscription services for regular and frequently used products are likely to show greater resilience than for curated services, due to their regular usage nature. Brands have to be nimble to keep up with the rapid pace of sending regular boxes and continuously offer value.
Make sure to read the post. They’re covering several subscription companies, giving you an idea about the breadth of possible subscription businesses.