When the world is forced to shut down due to the COVID-19 pandemic, the subscription box customer relationship management trend continues to rise.
A subscription box is a package that customers receive in the mail. It usually takes place on a recurring basis. And most commonly, are all related to a specific niche or market. A strong brand-customer relationship is the basis of a subscription sales model.
Even though the subscription box has been around for years, the COVID-19 pandemic has allowed it to thrive in 2020 with consumers being confined to their homes and not being able to visit traditional retail stores.
Every possible thing you could want (and even what you don’t want) can be sent to you via a subscription box. Wine lover? You have the opportunity to taste some of the best reds and whites from award-winning vineyards across the globe, all from the comfort of your home. Want the newest spa trends continuously updating your skin-care or makeup regime? Get the latest products every month without searching in stores.
Customers love the convenience, the element of surprise, and the custom-picked products. But they don’t necessarily love the unclear value, overbuying potential, return problems, and difficulty of quitting this service.
How Subscription Boxes Entice Customers
According to a study conducted Forbes, where 1,000 retail shoppers were surveyed in May of this year, one in five purchased a subscription box during the pandemic. HelloFresh, BarkBox, Blue Apron, and Dollar Shave Club are just a couple of the most popular brands of this convenient trend. CEO and founder of Zuora, Tein Tzuo, stated: “subscriptions continue to deliver above market growth,” and believes this growth trend will continue to rise in the coming months.
The subscription box is especially popular amongst the millennial generation. One study conducted by Forbes in 2019 revealed that 31% of millennials are already subscribed. The same study found that 38% of them are planning to do so within the next sixth months. However, it’s not just the younger generations that are jumping on board with this latest trend. Even baby boomers are attracted to their convenience, with 8% of them already subscribed and 22% planning on subscribing.
So how do companies effectively enter this industry and market towards their costumers?
Customer Relationship Management Through Subscription Boxes
In traditional commerce, customer relationship management is usually done on a per-purchase basis. To maintain their loyalty and create a long-term relationship, traditional commerce relies on customers consistently coming back. However, in subscription-based retail, customer loyalty looks very different.
According to recent research conducted by EConsultancy, the average length of time a consumer keeps a subscription box is 125 days or four months. Creating lasting relationships through subscription boxes is focused on customer satisfaction and exceptional service, which also impacts the number of times a customer moves through the purchase funnel.
Marketing is key to successfully capitalize upon the power of subscription boxes. Some of the most influential brands focused on the subscription’s savings, convenience, and flexibility in their marketing messages, rather than special pricing or promotions.
Social media is great to start creating engaging content that will enable brands to effectively reach their target audience. Others have focused on leveraging social media through influencers and subscription boxes bloggers. People love to listen to what their favorite social media celebrities have to say. And many of these box bloggers offer real and authentic reviews, allowing their followers to truly trust what they think or what they have to say about a product or service.
Having a good quality CRM when procuring a subscription box is vital to the long-term success of their campaigns. This allows brands to adequately manage customer data, which is arguably the most important information you can acquire when creating a personalized box of materials. This will also help support sales management, integrate social media and communication, and grow relationships.
Personally, as a college student, I have only tried one subscription box and have had a somewhat enjoyable and successful experience. Ipsy, a monthly subscription service that starts at just $12 per month, provides a makeup bag with five samples of deluxe cosmetic samples, such as skincare, make-up, perfume, and nail products. Founded in 2011, Ipsy’s mission is to inspire individuals around the world to express their unique beauty.
Let’s take a look at some of my personal pros and cons of Ipsy’s subscription box.
Advantages of Ipsy’s Subscription Box
- The price point is on the lower side, compared to other makeup subscription brands, like Birchbox.
- Customization: When you first join, you take a beauty quiz to help tailor the contents of each makeup bag to your wants and needs. They can also match beauty products to your hair, skin, and eye color!
- The opportunity to try new brands that you otherwise wouldn’t have known about is another plus. You get to try the travel-size version, and if you like it, buy the real product.
Downsides of Ipsy’s Subscription Box
- Some of the products I have received, I’ve never used. And unfortunately, I don’t plan to, which makes me feel like I wasted my money.
- There is a waiting list if you are new to Ipsy. For me, it took about 2 months and a few Facebook posts to be able to receive my first package.
- Sizing: all of the products are samples or travel size, you may only get one usage out of the item.
Overall, I would recommend a subscription box to anyone, especially because there is one for every niche in the market. As a customer, the subscription box makes me feel strongly connected to a company. It excites me to check every month what surprises arrive in my mailbox.
Customer-centric companies can use this trend to grow their relationships in a new and exciting way.