More and more consumers have a regular product subscription, with a box sent to their homes at set intervals. The subscription commerce sector is booming – and represents a new line of business for parcel companies.
Subscription boxes – sent by parcel
Consultancy firm McKinsey & Company describes the typical users of online subscription services as “younger urbanites with money” Women use subscription boxes more than men, with the ratio coming in at 60:40. The idea is simple: instead of placing single, one-off orders, online shoppers subscribe to products or product groups on a regular basis – usually monthly or weekly.
Start-ups leading the way
Customer service is also at the heart of this kind of e-commerce. The subscriptions are designed to deliver a shopping experience or simply save time. As the services are easy to cancel, only providers with an impressive service level are able to secure loyal customers.
Up to now, the market has been driven by start-ups. After all, sophisticated technical solutions are available that are precisely tailored to the unique characteristics of subscription commerce. Therefore, entrepreneurs with limited capital and personnel were still able to build a successful business. Now, established companies and brands are also entering the market.
International service – the way forward
Web-based subscription commerce is on the rise worldwide. According to estimates from Royal Mail, the market volume for subscription commerce will be worth one billion pounds sterling in the UK alone in three years’ time. Many subscription providers are using their subscription services to boost international expansion, with almost 90 per cent of subscription firms generating at least part of their revenue abroad.
It’s the job of parcel companies to make sure that the subscription box is reliably delivered to the customer – both nationally and internationally. This is part of the success of e-commerce.
Boxes full of goodies
Users of online subscription sites only stay loyal if customer service is up to scratch. Almost a third of users cite the individuality of the offer as the main reason for having a subscription, with a quarter pointing to convenience. The following services are especially popular:
- Mystery boxes, which feature a new selection of products each time. These account for 55 per cent of the subscription business. The most successful categories include fashion items, cosmetics and food.
- Replenishment subscriptions. Just under a third of all subscription boxes are designed to give consumers a constant supply of everyday items.
- Club memberships also offer their customers subscription services, promising attractive terms and exclusive benefits.