Why subscription boxes benefit both consumers and small businesses

Courting new shoppers can be a hit or miss proposition for many entrepreneurs, especially when they have limited marketing dollars.

For startup entrepreneurs such as Priscilla Everett, a beekeeper and founder of Made By Bees, the perfect channel to get her name beyond her local Brockville, Ont., market turned out to be a Montreal-based subscription service called Little Life Box.

“I knew if I wanted to take the business to the next level I would need more exposure,” Everett said. “I also knew subscription boxes were becoming quite popular and figured it was a good way to get a name for my beeswax wrap out there at very little cost.”

Consumer interest in subscription boxes was ignited by the introduction of curated food and produce boxes about eight years ago in North America. Health, beauty and fashion products quickly followed. Since then, a rapidly growing number of entrepreneurs are finding niches to curate content for shoppers eager to receive monthly shipments.

Since doing two sampling campaigns with Little Life Box, Everett has grown her online followers to 500 from less than 50.

“I now get orders from Nova Scotia, Edmonton and B.C. without having to put too much money into marketing,” she said.

Some entrepreneurs use subscription services to sell their beauty and lifestyle or gourmet food products. For others, it may be confectionary, coffee, socks, underwear and even feminine hygiene products.

There are other subscription services, but the idea behind Little Life Box came about four years ago when Chelsea Brennan, then 25, wanted to try new healthy lifestyle products. The U.S. subscription box company she found didn’t ship to Canada, so she and her mother, Suzanne, started their own company. Her father, Mark, joined a few months later.

Curated sample boxes are an ideal opportunity for customers to discover new healthy alternatives without having to pay for full-sized products at a health store.

“It’s expensive for people to try out many of these products that are not that well known,” Mark Brennan said.

Little Life Box now ships up to 1,500 boxes a month, primarily to female consumers between the ages of 18 to 55.

“It’s just as important to businesses as our subscribers, because they can reach potential customers for a fraction of the cost of other marketing channels,” Brennan said.

A bonus is that many recipients love to spend time sharing their discoveries on social media.

“Once the product is talked about it could be seen by thousands,” Brennan said. “It’s a really neat way to get product into people’s hands and have natural influencers talk about it.”

It’s just as important to businesses as our subscribers, because they can reach potential customers for a fraction of the cost of other marketing channels

Mark Brennan, Little Life Box

Millennials and Gen Z consumers especially love the concept. According to Accenture consumer studies, 67 per cent of Gen Z shoppers and 54 per cent of millennials are interested in curated subscription programs.

Brent Chaters, managing director, digital marketing practice, at Accenture in Toronto, said younger consumers tend to be more adventurous and curious when it comes to trying new products and services.

“They have a higher level of trust in getting something sent to them and are willing to pay a premium for the experience,” he said. “Subscribers get exposure to a new brand that they can talk to others about, whether it’s soap or clothing or whatever.”

Chaters points out that subscription services have become second nature in a world where pay-per-month streaming services are the norm.

“The value realization is high compared to the days of CD- or book-of-the-month-type offerings,” he said. “Consider what consumers expected with DVD rentals in 1999 versus a Netflix or Spotify subscription in 2019.”

As for vendors, Chaters said such services give them an opportunity to place their products in the hands of potential customers and lock in a recurring set of revenues.

“Every study shows that the more people get product into their hands, the more they will interact with it,” he said. “With tactile engagement, the greater the chances they will buy it.”

Pinki Gosal and Monal Patel, co-founders of Vasanti Cosmetics in Markham, Ont., say that hands-on experience has played a big part in marketing their Brighten Up! Exfoliator in the U.S.

In 2012, Birchbox Inc., one of the largest and most successful subscription services, approached the company to include the exfoliator in its beauty product sample selections.


This undated publicity photo provided by Birchbox shows a typical monthly beauty sample shipment.

Courtesy of Birchbox/AP Photo

“We had relatively small sales in the U.S., but through Birchbox we were able to ship 50,000 units,” Patel said. “It instantly changed our business in the U.S. We also saw our own web and Amazon sales go up.”

The following year they shipped 100,000 samples of the exfoliator. And another large amount the year after that … and so on.

“They gave us the means to get one million samples of our product into the hands of U.S. customers,” Gosal said. “It became our No. 1 seller and received 200,000 positive reviews online.”

Gosal estimates Vasanti has reached four million subscribers since they started using subscription boxes.

“We have always known that once people try our products, they speak for themselves,” she said. “Working with subscription boxes turned out to be a low risk and easy way to build a stronger presence with a targeted customer base.”

Financial Post

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