Despite growing pains and encroaching competition from brick-and-mortar retailers assembling their own samplers, subscription boxes are still flourishing.
But the combination of what’s in the box can dictate success, said experts, who endorsed a mixture of established logos and emerging brands.
A case in point is the March GlossyBox, which garnered the best consumer perception to date for the company, according to Carlos Soares Moreira, head of business development North America. The recipe of the more established Too Faced in tandem with up and comer Vine Vera Resveratrol proved ideal. “A 50/50 mix is good. Boxes with only new or only traditional don’t sell as well,” he said.
The big names build attention, but the beauty of boxes is also exposure for new brands. This is especially the case with cost of entry and failure rates high in bricks-and-mortar stores.
Wendy Liebmann, founder of WSL Strategic Retail, concurred that the biggest payoff is for the newcomers. “Like social media, these are a viable way for small companies to get their message and product to a targeted group of consumers who will pay to try what’s new. A much smarter use of funds than typical media,” she said.
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Two brands embedded in the subscription box business are Beauty for Real and Doucce.
Inherent to her success, said Leslie Munsell, the creator of Beauty for Real, is matching the products included to the service. “Price determines what you include since some sell at higher prices. And other boxes are makeup only,” she said.
Participating in the programs has been effective for Beauty for Real, Munsell said, especially after her recent rebranding which included new packaging, fresh collateral and an updated web site.
“We have found that working with the subscription boxes has been an excellent way for us to introduce our new branding and each new product to a large audience that may not otherwise see us. When a subscriber loves your product, they tell their friends and they also reorder,” Munsell explained.
And she has proof. After putting her D-Fine Lip Pencil in GlossyBox, she witnessed reorders of up to four items at a time. Pumping sample boxes into influencers is key, too. When influencers such as bloggers or vloggers receives boxes of products they generate thousands of images through reveals, tutorials and how-tos.
Munsell also designed more than 500,000 eyeliner pencils exclusively for Ipsy. She unleashed 65,000 Shadow Stx on Boxycharm and also counts FabFitFun as a go-to avenue. She plans to expand with other boxes going forward.
Participation isn’t a guarantee of success, she added. “As a brand, you have to be able to move quickly to keep up with the fast monthly pace of subscription boxes and come up with some creative ways to make it work.”
Doucce has also found success in boxes, especially since the company maintains sampling is its best vehicle to drive purchase. Doucce was part of a recent limited-edition GlossyBox, which donated proceeds to Fighting Pretty, a nonprofit that helps women following cancer treatment. It was GlossyBox’s first charitable endeavor.
Brands and retailers are invading the sample box turf. E.l.f. cosmetics has its own boxes and retailers such as Nordstrom, Sephora and Target have their versions as well. One brand source said he’s not concerned with retailers entering the fray. “Consumers know the brands a retailer sells and there is no element of discovery in the boxes,” he said.
Recent events in the industry also point to more bucks inside the box. Unilever gave the nod to the format with its $1 billion buy of Dollar Shave Club. And, as reported, Birchbox raised $15 million in bridge financing from existing investors that is meant to act as a cushion as the company works toward profitability.