Subscription Retailers Are Carving More Than a Niche for Themselves, They May Be Taking Over

Completely web-based retailers have not raised eyebrows in years, but what about retailers that don’t even have a store on their site? While brick-and-mortar retailers struggle with making their shopping experience memorable and even luxurious, the latest startup trend is omitting the shopping experience from the equation entirely.[1]

Subscription box services have officially taken over, and though it is not immediately clear, there are a few reasons why their rise was almost inevitable.

Services like Stitch Fix, Trunk Club, Tasting Room, and Blue Apron are among those leading the charge toward sending personalized, discounted boxes to customers who merely sign up and wait.[2] Taking the hint, larger retailers like Target, Amazon, and Old Navy are creating partnerships or services of their own.[3] What’s got customers going crazy for products they do not see until they are at the door?

Industry observers note that subscription services are the elegant combination of several growing consumer trends that include a priority on convenience, perceived discounts, personalization, and social media engagement.[4]

Tasting Room, a wine club that is currently growing across the country, begins the experience with a free sample kit that, along with a guided online quiz, creates a personalized selection at discount prices. Like similar services Trunk Club and even Blue Apron, Tasting Room removes the frustrating parts of a shopping experience, like puzzling over a row of indistinguishable wines or struggling through a recipe, and replaces it with a memorable experience.

With brand recognition and loyalty being so essential, how do these startups get their foot in the door? The answer is in social media and a data-driven marketing strategy that constantly iterates.[5] Anyone that has listened to a podcast in the past few years has heard an ad for such a service, often with an offer code unique to the show.

Experimentation and on-the-fly adjustment are well-rewarded. And in a field that is rapidly saturating, creating unique value propositions is the name of the game.[6] So it remains to be seen if larger retailers, which generally aim for broader customer bases, can succeed in such a specialized and personalized market.

What is guaranteed is that subscription services are here to stay. As a customer or investor, they’re a model to pay close attention to.