What’s in the Box? The Surprising Growth of Monthly Subscription Boxes

Monthly Subscription Boxes have proven to be a popular commodity in today’s e-commerce market, but what is their real value, and are they sustainable in the long term?

 When it comes to monthly subscription boxes, the appeal is easy to understand. The level of convenience, combined with the surprise of what is to be found within, encapsulate all of the things that people like about the modern sharing and e-commerce economy, even as they serve as examples of how the immediate benefits of that economy can overshadow some of the long-term questions of its sustainability.

Monthly subscription boxes are a weird beast: initially a mix of discovery commerce (where the samples included within the boxes were just that: samples) and convenience commerce (where people are paying for a specific product to be delivered to their doorstep regularly and with minimal effort on their part), they have since blossomed into a cultural phenomenon where the opening of the boxes themselves—the ‘unboxing’—carries enough suspense that there are entire social media channels dedicated to the experience.

In many ways, this was always going to be the natural progression of this service. These boxes are, after all, a luxury service, no matter their content. Most observers agree that the ball got rolling with Birchbox—a beauty sample business—as a way to attract brand-name beauty supply companies who, in the beginning of this decade, were still trying to find an e-commerce equivalent to the magazine spreads they relied on for a large share of their advertising. Birchbox came up with the idea of sending subscribers a monthly box of samples, with the broader goal being to build awareness and brand loyalty when it came to their long-term shopping habits.

Soon enough though, what started out as a premium service meant for the purposes of up-selling soon became the main attraction. But the luxury of it all remained. What, after all, is most people’s favorite thing about Christmas gifting? It’s often not the gift itself, but rather the anticipation—most often a shared experience given the public exchange—and revelation that comes with uncovering it.

With subscription boxes, this has become a monthly experience, and thus it makes sense that it would find a public outlet in the form of YouTube and Instagram videos.

Today, the monthly subscription box business is booming. My Subscription Addiction, which indexes the numerous monthly boxes available, lists over 1,5000 currently on the market. While the initial start-ups used what was considered (at the time) the ‘Netflix model’—It’s like Netflix, but for food! Netflix for clothing!—the value of the monthly content became harder to define. What had been a matter of low-value (beauty product samples and food) and lasting value (clothes and accessories), changed, once the nature of these services found a new market to explore: pop culture.

In 2012, Loot Crate promised to deliver a monthly ‘Comic Con in a box’ to its subscribers, tossing together various products—toys, art, clothing, miscellany—based around various themes that appealed broadly to self-proclaimed geeks and gamers. As their subscriber base began to grow in conjunction with the larger ‘subcom’ (subscription based commercial business) boom, they began to branch out, offering various box options expertly tailored to narrower areas of taste and interest—video games, comic books, anime, etc.; they would produce a box for each subset. They recently expanded even further, past ‘geek culture’ and into the American pastime itself, with the launch of Sports Crate, a monthly subscriber box that includes merchandise officially licensed by Major League Baseball.

Steady as the tide is right now for subcom, there are concerns. Should there be an economic downturn, especially one as drastic as the global financial collapse of 2008, many of these services are likely to go under, as they will no longer be able to count on the disposable income of their consumer base. This is true of every business that provides non-essential products, but unlike a monthly box that delivers men’s clothing, for example, a men’s clothing store is not dependent on a monthly financial commitment from their customers to stay in business.

There are also the ongoing concerns about the environmental impact of subscription box services—although this falls under the umbrella of e-commerce in general. Although there are disputes about whether or not the carbon footprint of delivery companies is much more than that which would have been created by customers traveling to brick-and-mortar stores themselves, the sheer volume of packaging and parcels has exploded over the course of the last couple years.

Add on to these concerns the fact that no one seems to be implementing a reverse supply chain for subscription box products. The nature of monthly subscription boxes means that plenty of what ends up being included in them turn out to be of no interest to the people that receive them. That is an unavoidable part of the service, one that subscribers have made peace with but which is likely creating a huge amount of trash that no one is concerning themselves with. Even as the retail industry is in dire need of a reformed reverse supply chain, subscription boxes are likely to throw a new wrench into such efforts.

Despite these concerns, it seems unlikely that—short of a sudden economic shock— the popularity of monthly subscription box services will slow down any time soon. As all of the major brand names (from Hello Kitty to Disney to Adidas), across almost every conceivable market, launches their own box service, the number of small and single-person businesses looking to get in the game continues to grow. It should tell you all you need to know that there are now subscription services that help these upstart entrepreneurs design, build, and scale their own subscription services. Much like a different kind of box—a Chinese box—who can guess where it all ends…