The COVID-19 quarantine has caused consumers to value convenience and predictable services over experimenting with new products. Activities that once thrived in consumer markets related to shopping venues, restaurants, and other events now remain limited due to necessary health restrictions. This has left a void that direct-to-consumer businesses such as those in the subscription box industry hope to fill. The opportunity to bring these consumer experiences to the consumer has caused a drastic increase in the market viability of subscription box services.
As the operations manager or CEO of a company that offers subscription boxes, you should understand the market conditions surrounding their growth potential. This will help your company improve its services as well as stay on top of this trend as the world resumes its normal activity this year, or later.
Subscription Boxes: A Market Dominated by Convenience
Taking any one industry as an example can demonstrate in miniature why subscription boxes continue to rise in market potential as we progress through 2021. The movie industry, for instance, adapted from the theater experience to accentuating existing subscription streaming services like Amazon Prime, Netflix, and the newly fledged Disney +. Rather than visit-in-person dining establishments, meal kits through subscriptions like Blue Apron and Home Chef offer consumers convenient ways to craft their own meals. Instacart has encroached on the business of grocery stores. The Dollar Shave Club saves consumers trips to the pharmacy.
Personalizing these services to provide for the individual consumer’s changing needs during the pandemics has made them preferable to the in-person shopping, dining, and viewing experiences. Direct access to new films and ready-made meals has been a necessity during the pandemic. However, fear of COVID-19 no longer drives the viability of subscription box fulfillment.
Now, consumers have adapted to the convenience of these services. Their innovations are now accepted and desired. The predictability of having a streaming service on call or meals regularly delivered has upstaged the comparative luxury of the in-person consumer experience.
According to Subscription Impact Report: COVID Edition, 22% of companies have experienced growth in their subscription box services during the pandemic. However, as people adjust to these conveniences and resume normal activity, they seek flexible new services to provide other needs. This makes it essential for companies with direct-to-consumer or subscription box services to understand what customers expect from these services as we move further into 2021.
How Subscription Boxes Attract New Customers
To make the most of your subscription box company, we’ve researched successful subscriptions to break down the main principles behind their success. To leverage new marketing campaigns, products, and services, businesses should know what works for consumers during the pandemic, as well as what will continue to work once it ends.
The increased demand for subscription boxes during the pandemic can be directly linked to convenience. According to the Subscription Impact Report, the types of subscriptions that have experienced the most accelerating growth during the quarantine include digital media and news, communication software utilities, e-learning subscriptions, and over-the-top media streaming.
In other words, the factor that most influences the market potential of direct-to-consumer services is convenience. These subscriptions share the ability to replace an in-person service with internet-delivered content. Instead of in-person meetings for work and recreation, communication services have skyrocketed in market potential as people learn to lead virtual conferences. News consumption has increased while schools have become more limited, requiring many students to seek out subscriptions to learning sites.
When the COVID-19 quarantine has ended, much of this growth will likely stop accelerating. However, many businesses and employees have adapted to remote work during the quarantine. They have purchased technology, remote communication subscriptions, and reconfigured their homes for remote work. Additionally, many people have adapted to their new work environment and prefer the comfort and convenience that working from home affords.
According to Global Workplace Analytics, remote workers in the United States in 2021 are expected to jump from 3.6% of the workforce to upwards of 30%, for at least several days per week. This makes remote communication subscriptions and other work-focused direct-to-consumer services an industry that can expect major growth in the coming decade, growth fueled by the convenience of the services.
In an uncertain world, consumers have become dependent on predictability. The difference between shopping in a store for a film and having a consistent network of on-demand streaming subscriptions is huge for the movie industry, but it can be applied as an example to other services as well.
For instance, the Dollar Shave Club saves people a trip to the store to buy razors, but that’s not the full extent of its market viability during a lockdown. It gives consumers a predictable service, something they can count on as being the same each month without any extra work from them. This also applies to meal delivery services like Blue Apron and Home Chef. The ability to plan and predict meals without physically shopping has gone from being a luxury to a necessity.
Markets change quickly and the COVID-19 lockdown is wrapping up. This means that the subscription box industry will see its numbers waning to reflect the actual market potential of its services during normal global operations. This places a huge value on the right marketing for subscription box fulfillment services that hope to remain profitable after the quarantine.
To properly market subscription box services, companies must prepare for the end of the lockdown, when they must communicate to customers why their services are more than a luxury. Delivering beauty products, educational materials, razors, meals, or other items must be emphasized as the right move for consumers to make based on value and convenience, not luxury.
Being able to offer customers convenient substitutes for their in-person services has been a health necessity for over a year. When it is no longer necessary to use these services, marketing should shift to an angle that emphasizes the time and money consumers can save by keeping the subscriptions they’ve grown used to. Targeting the right audience to maintain subscriptions means emphasizing the value of the services and the flexibility of the company.
Many customers will consider dropping their subscriptions after the lockdown. Subscription brands should remain understanding and transparent. They could, for instance, allow customers to pause subscriptions temporarily. Now that consumers have more of a choice in whether they keep a subscription, companies need strategies to maintain their numbers. Brands that remain transparent and flexible are more likely to receive loyalty in return.
How to Maintain Subscription Box Fulfillment
The subscription box industry relies on a few key factors to choose its most competitive businesses. The first is an expanded range of bundles that can accommodate different customers. Businesses that hope one size will fit all may be shortchanging their services in the long run by not offering enough convenience to the wide range of consumers they could potentially attract.
Availability is also a huge factor. Subscription boxes that delay or run out of stock cannot bank on the main reasons customers subscribe in the first place – convenience and predictability. This means that a subscription box company must-have products stocked in advance and ready to ship when subscriptions lapse.
Since the industry has become competitive, even packaging has become a point of contest. The companies that kit their items efficiently and use unique packaging to make customers feel special stand a better chance of maintaining brand loyalty.
These fundamental procedures will only become more significant when quarantine lifts since consumers will have less reason to keep their subscriptions. Companies with diverse subscription options stand a better chance of keeping customers when this happens since many will reduce their subscriptions without canceling them if given the option. Companies that keep products in stock and package them appealingly give customers more reasons to remain loyal when that loyalty becomes a question of convenience vs value, later in 2021.
The Takeaway for Businesses
Businesses in a subscription box industry have thrived in the market of convenience created by the COVID-19 quarantine. Consumers value convenience and predictability over cost during a time when they have little choice but to change their habits to accommodate direct-to-consumer services. As a result, subscription box fulfillment has become a competitive industry.
As quarantine winds down, companies that offer subscription boxes must refocus their marketing from convenience to value and transparency. The reason is simple: when the world is active again, subscription boxes will lose a lot of convenience in the eyes of the consumer. Remaining flexible with subscriptions and emphasizing value can help subscription box companies stay ahead in a waning market.
Fortunately, much of the market growth for subscriptions will remain even after quarantine ends. A refocused marketing narrative, however, can help ensure that your brand retains customer loyalty and remains part of the growing sector, even when the world gets moving again.