Subscription boxes are a recurring delivery of niche products as part of a marketing strategy and a method of product

distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations *Probability distribution, the probability of a particular value or value range of a varia ...

. Subscription boxes are used by subscription-based ecommerce businesses, referred to as "subcom" for short, which follow a

subscription business model The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a product or service. The model was pioneered by publishers of books and periodicals in the 17th century, a ...

. They target a wide range of customers and cater to a variety of specific needs and interests. It is estimated that there are 400 to 600 different kinds of subscription boxes in the United States alone and more overseas.Jayakumar, A. (2014, April 7). Little-box retailing: Subscription services offer new possibilities to consumers, major outlets. Retrieved November 30, 2014, from Subscriptions vary in both cost and frequency, making them more accessible to a greater range of customers with different socioeconomic backgrounds. Subscription boxes tend to range from $10 to $100.Hutt, K. (2014, April 8). Subscription Boxes Can Feel Like Christmas, But Are They Worth It? Retrieved November 30, 2014, from

History and appeal

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Various subscription commerce companies are growing rapidly. BarkBox’s subscribers grew from 1,500 to 55,000 between 2012 and 2013. According to ''

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'', Birchbox, which is arguably the most recognizable service and valued at a reported $485 million in April, 2014, led the subscription box trend with its 2010 launch. Birchbox's model of providing customers with samples of personal care products in order to upsell customers into buying the standard sizes of the sample products they enjoyed has proven to be a successful marketing tool. Birchbox has reached nearly 400,000 monthly subscribers and has inspired many other companies to start utilizing subscription boxes. Part of the appeal of subscription boxes is that consumers discover products they might not have otherwise. This allows customers to try products and brands risk-free. The increased exposure to new products helps customers discover optimal products for their preferences and needs. While only some subscription boxes have return options, there are places online to exchange unwanted items.Fussell, J. (2014, September 22). From Birchbox to Bulu Box: Customers love the thrill of monthly surprises. Retrieved November 17, 2014, from The subscription box industry came into the limelight when

Unilever Unilever plc is a British multinational consumer goods company with headquarters in London, England. Unilever products include food, condiments, bottled water, baby food, soft drink, ice cream, instant coffee, cleaning agents, energy drink, ...

acquired

Dollar Shave Club Dollar Shave Club is an American company based in Venice, California, that delivers razors and other personal grooming products to customers by mail. It delivers razor blades on a monthly basis and offers additional grooming products for home del ...

, another well-known entity in this space.

Business costs

Shipping costs and the need to constantly innovate present challenges to retailers offering the subscription service.Vaamonde, A. (2013, July 9). The send-a-box boom. Retrieved December 18, 2014, from

References

{{Reflist, 30em Distribution (marketing) Subscription services Revenue models

History and appeal

Business costs

See also

References