The subscription box category is a force to reckon with. According to data from global consulting giant McKinsey, 15% of more than 5,000 surveyed online shoppers have signed up for one or more subscriptions to receive products on a recurring basis, frequently through monthly boxes.
“The subscription e-commerce market has grown by more than 100 percent a year over the past five years. The largest such retailers generated more than $2.6 billion in sales in 2016, up from a mere $57.0 million in 2011,” according to McKinsey’s report.
“In the subscriptions category, there are two sectors. There’s the surprise and delight, which is like the curated boxes,” he explained. George’s company, Gentleman’s Box, which sends customers menswear accessories like socks and ties each month, falls into this category.
Dietary supplements fall into the other group, ‘replenishment,’ he added. “It’s for customers who know that ‘I need this supplement every month, and I don’t want to have to go to the store every month to get it.”
His sentiments echo that of Jana Vyleta, an analyst at the market research firm Mintel. “Many consumers think that the vitamins, minerals, and supplements—or VMS—category is confusing to shop, and these services remove a lot of the shopping guesswork by curating the vast category down to a single product or group of products,” she told us in a previous interview.
The Subscription Trade Association
George is a co-founder of SUBTA, which was established in May 2017. “We initially launched the first ever subscription summit, that was September of 2016, and we did that because we thought there was a need for an event for subscription box companies,” he explained.
Common challenges in the category include logistics and operations strategies, or the legalities surrounding renewal policies and what not. Such an event was an opportunity for these companies to get together and brainstorm.
“But then we thought, we can’t just wait once a year to get together, so we started a trade group,” he said. “We want to be a leading voice in the subscription box industry, to be the go-to resource for brands, for partners, for media to be able to go and get the resource that they need.”
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Now over a year old, its most recent event attracted over 800 attendees and over 600 members coming from industries as diverse as fashion, dental care, household items, and, of course, dietary supplements.
Bulu Box CEO: Subscriptions should be a tool for bricks and mortar companies
Among SUBTA’s pioneers is Paul Jarrett, CEO and co-founder of Bulu Box, a Nebraska-based company that delivers a selection of health and wellness products like supplements and snacks.
“What you find in the vitamin and supplement space is the vast majority of people will start new products if they’re able to try them first,” he told us. “They like to stick to what works.”
For Bulu Box, which started exclusively with sending samples to customers, the next step was to help the brands featured in the boxes acquire regular customers. Bulu Box has a store where shoppers can repurchase the samples they liked.
The company now also lends its expertise in subscription box logistics and management to create private label boxes. One of its prominent clients is GNC.
“Bricks-and-mortar retailers are evolving, there’s a lot of tools they should have in place. I believe the subscription model is a tool that they really should have in their toolbox,” he argued.
“A subscription box isn’t going to save a multi-million company, but what they can do is use it as something to build on and create an omnichannel world.”