Choosing items for your store is all about thoughtful curation and creating opportunities for serendipitous discovery. When you are considering how to put together a subscription box, these same principles apply—just on a much smaller scale.
The convenience and safety of subscription boxes made them an easy choice during the pandemic, and those habits are sticking: The global subscription box market was valued at $22.7 billion in 2021, and IMARC Group expects it to reach $65 billion by 2027.
A 2022 survey of American customers shows that subscribers sign up for three main reasons: to try new products (51%), because they enjoy receiving products in the mail (39%), and because they consider it easier than shopping (37%). According to Recharge’s The State of Subscription Commerce Report, subscriptions provide stability not just for subscribers, but for businesses:
- With a steady influx of net-new subscribers in 2021, subscription brands grew their overall customer base by an average of 31% across product categories.
- Between 2020 and 2021, monthly recurring revenue (MRR) for subscription brands increased substantially, from 62% to 138% growth.
- Finally, lifetime value—often an indicator of strong customer loyalty—also increased across the board.
Why create a subscription box instead of selling items separately?
There’s something so satisfying about getting a little package of goods every month. It’s not just a treat; it also ensures shoppers never run out of their favorite products. Low on coffee? Not to worry, the subscription is arriving next week! There are plenty of pros to starting up a subscription box, both for you and your customers.
- Help shoppers explore new products: It can be difficult for shoppers to break away from what they’re used to. Each month, you can pop a new product into each box to showcase your entire product range and introduce customers to new brands. This can also be an easy, simple way to move excess inventory.
- Improve customer retention and loyalty: Subscriptions are paid for on a recurring basis, which helps you build a beloved brand, increases customer lifetime value, and makes sure customers come back every single month.
- Stay front of mind: Every time your lovingly put-together subscription box lands on a shopper’s doormat, they’re going to think about you (and hopefully recommend you to all their friends and family).
How to build the perfect subscription box
The best subscription boxes offer a mix of “want” and “need.” And because you’re bundling together multiple items, you have the opportunity to create something unique for each customer.
Here are some tips for building a successful subscription box service.
1. Pick a theme
The Recharge study found that subscribers prefer subscription boxes that include beauty and personal care (27.6%), food and beverage (26.7%), health and wellness (16.3%), home goods (11.6%), clothing (7.9%), and pet products (5.6%). These are all practical, necessary items that customers probably don’t want to run out of.
A box that has a bit of everything can be confusing, so focus your subscription service on a theme, a pain point, or a specific outcome. For example, a box made for relaxation might include candles, bath bombs, a face mask, and camomile tea leaves. Think about what your customers value, what feelings you want your subscription box to evoke, and how you can group together items to alleviate a specific pain point.
During the pandemic, Faire retailer MADE offered custom “Quarantine Boxes” that spanned a range of needs, from self-care specialties to family fun packs. The retailer was quick to tap into a set of brand-new pain points—and now, boxes make up 80% of their orders. They thoughtfully selected items that people wanted and needed to get through one of the toughest times in history.
2. Source your subscription box items
Cherry-pick the products that go into your boxes each month. Keep your theme in mind and be strategic with your choices: Will you have a “star” product and several smaller items? Or will you bundle together five to seven little pieces?
Curate and source items on Faire using our detailed gift guides, each of which is geared toward a different target market. For example, if your audience is made up of eco-conscious shoppers, browse our sustainable gift guide to choose an assortment of appropriate items.
You can extend the choice to your customers, too. Give them the opportunity to choose what items they’d like to receive from a pool of ready-sourced products. This will not only create a personalized experience for each shopper but also expose them to new product lines that they might otherwise have missed.
Beauty-box retailer Birchbox launched its Birchbox Select program to allow customers to pick out their own items to be delivered based on their skin or hair type. It was such a success that the brand decided to use that model for all their subscription boxes moving forward. To enable shoppers to make custom selections, try offering several different bundles that customers can choose from, or create an order form where they can tick a limited number of items for their next box.
3. Add a personal touch
One of Faire’s retailers, Haley Solar, added a personal touch to her customer care packages during the pandemic by including hand-sewn face masks using fabric sourced in her store. She created marketing content around this through Instagram Live demos and walk-throughs of making the masks, but the end result was a personal touch in each and every box.
In a similar vein, skincare solution brand Skin + Me offers an entire personalized service around its subscription box. In this report on Retail Week, co-founder and chief customer officer of Skin + Me, Rachel Jones, said that the brand personalized night cream formulas for every customer. They simply need to share what they’re hoping for, and the Skin + Me team does all the hard work. The brand also offers regular progress check-ups and support for subscribers, which Jones says is “something customers just don’t get when buying off-the-shelf skincare.”
There are plenty of ways to create personalized experiences without needing to customize products, too. Add a personal touch to your subscription boxes by including a handwritten thank-you note, a product that has the recipient’s name on it, or a bonus item that helps customers use the products in their box more effectively.
4. Create a cohesive look
You want to make sure that every part of your subscription box has a look and feel that aligns with your store’s overall aesthetic and values. For example, if your store is known for its eco-friendliness, consider packaging your items in recycled tissue paper. If you have a sleek and modern image, opt for packaging with clean lines and minimalist designs. If a key part of your story is giving back to your community, you might want to use a box company that gives back as well.
The experience of unboxing is a great way to make an impact on your customers that will last. Incorporating things like wax seals, beautiful stickers, and handwritten notes on notecards can make the presentation better as a whole.
5. Put a price on your box
Determine your profit margin before deciding how much to charge for your subscription boxes. Then, depending on this margin, set the price, taking into account all costs connected with curating and delivering the box. This covers the cost of the products, packing materials, shipping fees, and any other costs such as marketing or overhead. It also includes the labor expenditures for box assembly and delivery.
Make sure that the products are of great quality and relate to the interests of your target audience. A good-value offer promotes consumer loyalty and long-term subscriptions.
Finally, see how competitors in your niche are pricing their items. You don’t need to base your pricing exclusively on what others are charging, but this data can help you establish a competitive and profitable price point.
6. Let shoppers control their own logistics
The Recharge report found that there was a potential 30% increase in customer lifetime value by allowing subscribers to manage their orders via text. The ability to skip, swap, and add one-time purchases empowers shoppers to customize their experience with you, increasing both engagement and satisfaction.
You don’t have to totally revamp your website to empower customers to self-manage their subscriptions, but you can make it easy for them to control when they receive a subscription box, how they pay, and how to pause, either by contacting customer support or completing an easy form. Brands like Degusta Box and Ghia use texts to make it possible for customers to pause mid-subscription, get their boxes earlier, or cancel at any time.
In his book, Subscribed: Why the Subscription Model Will Be Your Company’s Future, Tien Tzuo makes a bold claim. He says that “subscriptions are the only business model that is entirely based on the happiness of your customers. Think about it—when your customers are happy, then they’re using more of your service, and telling their friends, and you’re growing.”
With 65% of Americans saying they’re open-minded to purchasing a product subscription, now’s the time to create a box worth subscribing to. The key is to provide a personalized service that goes above and beyond the traditional retail experience and delivers exactly what customers want and need, right to their doorstep.