Subscription box service: Thinking outside the box

Written by: Fibre2Fashion.com

Most of us are shopping addicts. The first thing people think about spending weekends or when they get a pay check is how they can escape to that mall and be part of the shopping frenzy. Fibre2Fashion.com checks out the subscription box.

 

Although most of us enjoy shopping for clothes and trying them on, there are those who remain shopping challenged, are restricted by schedules or are economically restrained.

 

That's when someone comes knocking on the door with a subscription box. Subscription box services are marketing solutions used by retail companies, mostly ecommerce businesses, giving people with different backgrounds an access to a wider range of products. The overall global market size of subscription box services is still unknown due to minimal data available and the growing stage of the industry.

 

What's this service?

While this delivery service system is still at a nascent stage in India, the idea has picked up in the United States of America and other parts of the world. So, how does this really work?

 

Top-notch brands and ecommerce companies cater to niche markets by offering curated new clothes and other retail products to customers, depending on their personal preferences. There is also an element of surprise attached with the box. Some companies provide pre-assembled hampers instead of asking customers to select their own products, eliminating decision fatigue in the process.

 

The reason this box service is catching up is because shipments are sent each month to customers, or as per the policies employed by individual retail companies. This provides customers the thrill of opening the package, just like on any special occasion. Generally, prices of each packaged box range from US$ 10 to US$ 100, which roughly translates to Rs 645 to Rs 6,450.

 

Darby Smart, a US-based online subscription box company, offers do-it-yourself (DIY) kits assembled by a huge community of designers, giving an option of mixing latest fashion with home trends on fingertips. Customers have to go through a string of instructions provided under the DIY project, which gives them their own sense of personal fashion style. According to Fortune, Darby Smart has 2,000 designers and attracts 100,000 unique monthly visitors. Some other online companies that are part of the $ 29 billion craft supplies industry are Whimsy box, For the Makers and Brit + Co.

 

Threat to tradition department stores

While boxed subscription services don't pose a major threat to traditional retailers, the solution could be seen as a viable option offered by departmental stores. "This [box service] is definitely supplemental, not a replacement for [traditional retail]," says Nikki Baird, managing partner at Retail Systems Research (RSR). "[As a retailer] why go to the hassle of having someone schedule time and take up prime shopping hours, when you could just deliver it to their house and let them try things on at their leisure?" she added.

 

 

Dressing men to the nines

In the United States of America, about 42 per cent of customers are said to be interested in subscription boxes and customisable clothing sites, according to a survey by Cotton Inc. The figure rises among men to 48 per cent. "Men are more objective oriented - 'I need three dress shirts' - the hunter imperative. They want to look good, but not as many of them want to invest the time," says James Dion, founder and president of the Chicago-based consultancy Dionco Inc. 

 

Subscription box companies that focus on menswear in that country are Fashion Stork, ZipFitDenim, Five Four Club and Bombfell. Another interesting company is The Mr. Collection, which provides on-rent clothing and accessories to men, delivered on the tenth of each month. The package includes a mix of menswear designer labels, as well as everyday brands. Trunk Club is also a personalised service for men, with stylists picking out clothes for the customers and refreshing their wardrobes.

 

Attracting female customers

Most of the subscription box services are also gaining grounds on the ever-increasing women-focused market. Stitch Fix uses services of about 1,200 stylists and delivers more than 250 labels, ranging from denims to dresses, to the customers' doors. Subscribers have three to four days to decide which products they want to use from the box, and the remaining items can be returned in a prepaid shipping bag to the company. The cost is about US$ 20 per box, equivalent to about Rs 1,200. Another notable online company focusing on women clothing is Adore Me, which sells attractive lingerie at lower prices as compared to departmental stores.

 

Feasibility in India

In India, the subscription box is barely blossoming, and currently seems more inclined towards beauty products, toys and food solutions, such as Enchantess.com and Bake Box.

 

Enchantess provides a box comprising four beauty samples of Indian and international origin. Another site, Fab Bag, has sections such as the women's bag and the men's bag. Fab Bag delivers a package consisting four premium beauty products and one makeup of customers' choice, only for Rs 1,599 under a three-month plan, a research of the site by Fibre2Fashion showed. Fab Bag has about 35,000 customers, of which 25 per cent are from smaller towns and cities, according to a news report.

 

While subscription services have been rolled out covering beauty, food and cosmetic products in India, companies are still slow to go for this system. Industry experts have revealed that while online companies would like to kickstart these services, they fear about sizing issues when it comes to women's online shopping habits. Companies like Flipkart and Amazon already have a successful system of apparel returns, which can push such firms away from employing this model. Surprisingly, a Chennai-based ecommerce site Tee20.com is catering to menswear in India, delivering new brand T-shirt to subscribers with a pack starting from as low as Rs 600. A pack that costs Rs 1,200 provides four round-neck brand new T-shirts to customers every month by Tee20.com.

 

 

Sustaining investment in the business

Subscription box services are highly popular in global markets, and venture capitalists are throwing in money into such business to sustain them. The story is not different in India. Investors are seeing potential in this model, and as the e-retailing industry is seen at Rs 12,000 crore, experts believe that such services will only grow. According to a news report, Flinto Box, a company that focuses on providing kids' discovery boxes, is estimated to grow multifold.

 

The Indian customer is waiting for more exciting subscription box services.

 

References:

1. Forbes.com

2. Fortune.com

3. Lifestylemonitor.cottoninc.com

4. Jsonline.com

5. Fabbag.com

6. Livemint.com

7. Tee20.com

8. Businessnewsdaily.com

9. Wikipedia.com

10. Economictimes.com

11. Flintobox.com

12. Trunkclub.com