Published Tuesday 10th November 2020
It comes as no surprise that interest in subscription box services has surged in recent months, during the initial national lockdown. Online retail outlets offering consumers subscription boxes across a range of categories are by no means a new phenomenon, but as millions were forced to stay at home, the subscription model has enjoyed a significant boost. What does this mean for the retail sector, and can we expect to see any lasting impact on the industry?
As COVID-19 continues to make the future fraught and uncertain, businesses should take action to reduce retail operating costs to ensure their protection. Here at Expense Reduction Analysts, we have been working with businesses throughout the pandemic, including within the retail sector, to help reduce to effects of the crisis and invest in the future.
The Convenience of Subscription Boxes
A subscription box is a curated collection of items, of which for the most part, customers will not know the specifics. Not only do these boxes create a sense of excitement (shoppers know what kind of items to expect but will not know for sure until the box arrives) but they are also more convenient for many consumers and offer a more streamlined shopping experience.
A subscription box takes away the need for waiting in online queues or re-entering purchase and delivery details. They are ideal for people who have no interest in spending hours shopping around but are still willing to part with their money and get some kind of retail experience.
The most popular subscription boxes are food-related, showing how much consumers value the convenience of such a service.
The Benefits of Subscription Boxes For Retailers
The benefits of subscription boxes for retailers are also significant, especially as more people are expected to work from home as COVID-19 restrictions increase.
These services can provide more predictable revenue streams as customers usually make monthly commitments, allowing businesses to make more reliable financial forecasts.
A new way to connect with shoppers allows for an increase in customer loyalty; if the customer does not know exactly which products they are receiving, there is a proven layer of trust and loyalty that shows shoppers are willing to buy into the brand itself.
Brand loyalty can also be maximised through a brand showing its awareness of larger consumer concerns, like sustainability. Some businesses will use excessive packaging, but finding more sustainable options and investing in environmentally-conscious initiatives will show customers that brands are aware of their impact.
The Future of Subscription Boxes
Unsurprisingly, high-street retailers have been suffering from a lack of foot traffic; maximising online and ecommerce avenues is something that needs to be embraced across the board.
While subscription boxes will not make sense for every retailer, there is a definite benefit to tapping into a rising consumer psyche that hinges on the surprise and associated dopamine hit.
Subscription boxes also give future opportunities for international expansion where it perhaps would not have been possible without the neatly curated convenience of such a box.
The subscription box market shows no sign of slowing and is expected to grow by at least 77% by 2022.
With 58% of businesses planning to invest in new or existing subscription boxes in the next year, we can expect to see a continuing shift to online services.
It is unlikely that subscription boxes will become customers’ primary avenue into retail, but the potential benefits and impact of the model mean that it is worth embracing where possible.
If your business has struggled due to the pandemic, why not get in touch with our experienced team here at Expense Reduction Analysts to find out how we could help manage and reduce your expenses?