Delivering innovation right to your door
Statistics Canada says that an average of 10 online shopping orders is placed per person annually.
While ordering our favourite products right to our door saves us a trip to the mall, it also blocks us from sampling some other, potentially better products.
The subscription box industry is a rapidly growing solution to this problem.
The industry hopes to expand its horizons by delivering a box full of products and/or samples catered to consumers’ interests on a monthly basis.
Today, a simple Google search can lead shoppers to a subscription box service for anything you can think of, from hot makeup products to trendy pet toys.
While the industry is still fresh on the scene, it’s growing rapidly.
Birchbox, founded in Sept. 2010, is widely regarded as the spark that lit the powder keg on this explosive trend.
Founded by Harvard Business School graduates Katia Beauchamp and Hayley Barna, Birchbox was started with a simple idea.
The pair created a monthly service that sought to deliver a box of curated beauty product samples directly to your doorstep.
In the years since, this idea has proven to be a useful marketing tool. But this makes up only half of the subscription box industry.
Subscription boxes fall into two categories: discovery and convenience.
Boxes that are classified as “discover boxes” are those, like Birchbox, that allow you to sample a handful of products a month catered to your specified preferences.
The goal of these boxes is to up-sell subscribers into buying the products, after falling in love with the samples within the box.
The other half of the industry, convenience boxes, sets to deliver products the consumer would likely already be purchasing right to their home.
Popular examples of convenience boxes are BarkBox, Dollar Shave Club and Russ Montague’s Nerd Block.
BarkBox is a subscription for the enthusiastic dog lover, sending collections of toys and treats for subscribers furry friends to enjoy, while Dollar Shave Club sends subscribers a fresh razor and blades every month.
Garland Harwood has 14 years of experience in the public relations field. He has worked with Amazon.com, Samsung and has even worked with technology conglomerate Cisco on their partnership with the 2016 Olympic and Paralympic games. He now works with BarkBox.
Harwood says BarkBox has “hundreds of thousands of subscribers,” and its revenue doubled from 2015 to 2016 alone.
With an endless range of what can be put into a monthly subscription box, the possibilities for the growth of the industry seem limitless.
Like BarkBox, Nerd Block boasts being the number one subscription box of its kind in Canada. The classic box supplies fans of nerd culture with licensed collectables.
Subscription boxes play to the fun and surprise of receiving a gift in the mail. There’s the mystery of not knowing exactly what will be in the box upon opening it, which in and of itself has given a boost to the previously popular unboxing genre of YouTube videos.
In these videos, “YouTubers” film themselves opening up a box and walking viewers through what’s inside.
The ability to show a product for what it is, without the influence of advertising revenue, means interested consumers can get a real feel for what to expect from a subscription box.
The online community for subscription box consumers doesn’t end with the opening of the delivery.
An unfortunate disadvantage is the fact that, statistically, recipients won’t fall in love with every item in every box they get.
Reddit and other online forums are ripe with options for subscribers to swap and sell unwanted products received in their box.
On the business side, there has yet to be a mainstream subscription box brand that has been considered a failure.
Forbes magazine states that Birchbox reported a $485 million dollar evaluation in April 2014 and currently boasts over 400,000 subscribers.
The appeal of the recurring revenue of a monthly subscription is hard for retailers to ignore.
From a marketing standpoint, viral and social marketing has proven to be the most effective way for suppliers to reach potential buyers.
As trends explode onto the scene, so do they implode. Fortune.com predicts a rapid decline for the subscription box industry.
Andres Vaamonde wrote a piece for Fortune predicting that the high cost of packaging and shipping could lead to its downfall. He also sees little room for innovation in the industry.
However, at Nerd Block the innovation doesn’t seem to stop as their diverse line of boxes to choose from continues to grow. Recently, Montague and team introduced the Valor Box in partnership with the U.S. Army.
With these updates and expansions, as well as the licensed suppliers in his pocket, Montague has been able to use strategic ordering and distribution to keep his business in the black.
“I have the luxury of not having to order any product until I see what the orders are, so I don’t have to spend a dime.”-Russ MONTAGE
It’s understandable why subscription boxes are appealing, and why subscribers flock to new boxes the moment they’re released. Ultimately, it’s a cheap way to treat yourself to a little something. And, while the future of the subscription box industry remains up in the air, one thing is clear. The idea of a recurring delivery of a custom-catered product is on trend right now.
Geek guru turns his fandom into a successful business
A fter graduating in 2004 from the advertising program at Durham College, Russ Montague discovered a way to combine and adapt his love for pop culture and work experience he had with iconic companies like MuchMusic, MTV Canada, and Universal Studios into two entrepreneurial endeavours, making him the ultimate geek-culture staple.
In 2011, Montague founded the 24-hour flash retail website ShirtPunch. The site offers customers collectables in 96 countries the opportunity to purchase a newly designed T-shirt. Each shirt is available for 24 hours only, increasing the exclusivity of the product. ShirtPunch has seen celebrity endorsements from known nerd-culture figures like Kevin Smith, Stan Lee and Ricky Gervais. The company has also partnered up with shows like Game of Thrones and Doctor Who.
In 2013, Montague flexed his entrepreneurial muscle again and launched Nerd Block. This is a subscription box based company. Consumers can sign up for a monthly mystery geek package that is delivered right to their door. The box is filled with collectables and a custom, limited edition T-shirt. Brand partnerships include Star Wars and Marvel. Every box is custom, so there is something for everyone.
Montague faced tough times when starting ShirtPunch, and in this video, he explains how he was able to rise above adversary.
“Durham College is where I found myself.”
According to Durham Region, over 1,500 business were registered in the area in 2015. This means for some companies to survive, it takes originality to stand out amongst competitors – especially if it plans to exists outside of the region. Innovation is a key strategy for some successful businesses, and has resulted in their growth.
This means for some companies to survive, it takes originality to stand out amongst competitors – especially if it plans to exist outside of the region. Innovation is a key strategy for some successful businesses, and has resulted in their growth.
“We’ve made a ton of mistakes, and we’ve learned the hard way. But here we are, and once you get going, it’s like a snowball.”