5 Kinds of Subscription Boxes

One of the primary differences between subscription boxes and traditional ecommerce is how much the fulfillment process is part of the overall experience for the customer. Fulfillment tends to be thought of as table stakes for running any online store, something that just has to work but not be part of the value, at least not since Amazon and others have commoditized fast, reliable shipping and fulfillment. However, subscription boxes are providing curated experiences that sometimes rely on subscribers receiving the latest experience at roughly the same time, or receiving the next sequential experience in their journey, OR maybe receiving a randomized shipment that doesn’t contain any previously curated items for this particular customer.

Understanding these different fulfillment scenarios for subscription boxes might help us think about what patterns are evolving in this unique industry and what kind of tools we need to continue to provide world-class experiences for our subscribers.

1. Theme of the Month

“Theme of the Month” boxes are subscriptions that build their brands on a new curated theme for each box, some examples include Loot Crate, Popsugar, and Shaker and Spoon. FabFitFun does this but on a quarterly basis instead of monthly. Qualitatively, this is what many people think about when they think of subscription boxes. They want to buy a curated set of products that are centralized around something they love, much like one might subscribe to a magazine for a curated/created set of articles to read.

One of the challenges with running this kind of box, especially as a new business, is product sourcing. At the beginning, managing inventory expectations during a volatile time as your subscriber base grows (and shrinks) can be difficult and unforgiving. Many business owners learn to supplement their core experience with an ecommerce shop as a way to help shed excess inventory. So figuring out how to forecast 3 to 6 months into the future, especially if sourcing product from overseas can make or break this kind of business.

2. Sequential Experience

A “Sequential Experience” box is a subscription box that provides the same experience to it’s subscribers in a way that builds on top of itself in a sequential order. So every new subscriber gets the same box 1, box 2, box 3, etc… Some examples of this kind of box include Hunt a Killer, Creation Crate, and The Preschool Box (shameless self promotion, sorry). This option is ideal for boxes where the experience needs to build on top of itself and is great for education-based content.

The challenges with this setup are, in many ways, opposite from the Theme of the Month crowd. Typically you are building out large chunks of content up front and worrying about replenishing inventory but not sourcing new and novel product on a monthly basis. The side effect is you are also taking on a larger quantity and more diverse set of inventory to manage every month.

Many boxes attempt to solve some of the challenges from Theme of the Month and Sequential Experience by taking a Hybrid approach between the two. Typically, this may look like a standard “Box 1” experience that every subscriber receives and then swapping them into the Theme of the Month queue for “Box 2” and beyond.

3. Randomized Inventory

“Randomized Inventory” works well for existing ecommerce businesses that are looking to expose their customer base to a broader range of products. Typically, these boxes have a few key types of items in each box that are swapped out in a random or semi-random fashion. For example, a beauty box may contain a lipstick, brush, and eye shadow with the particular brand/color/kind changing each month. Some examples of this kind of box are Birchbox, Boxycharm and Ipsy.

Keeping track of inventory as well as historical shipments received by subscribers is key for this setup. You want to broaden exposure to products but without repeating items in each shipment for your loyal subscribers. This can take expert-level excel skills, robust fulfillment center integrations and a strong attention to detail.

4. Shop and Return

Made popular by big clothing subscriptions, Shop and Return boxes are specifically designed to allow subscribers to pick a few items that they receive and return the rest with an included return label for convenience. Stitch Fix and Warby Parker are the big brands that come to mind with Get Wagging and Toy Library providing more unique experiences that fit into this category.

The overhead that comes with handling returned items and building 2x the shipping cost into your product makes this a difficult subscription box to pull off. Similar to Randomized Inventory this type of box will require a fairly complex inventory management system to keep track of items that are both coming and going.

5. Choose your Consumables

Choose your Consumables is typically represented by food-based subscriptions where you may log in on a weekly or monthly basis to select your next round of food or goods to be shipped your direction. Some good examples of this kind of subscription include Graze, Blue Apron and Dr. Squatch.

Making a simple experience for the subscriber while providing them with full control over what they receive and when is a complicated and difficult job. These boxes usually spend a lot of time on their website and account management systems in addition to providing a great customer support experience to keep the trains running on time. This can be a fairly technical business and probably requires a technical founder or team member to tie everything together.

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If you expand the context here to include all subscription-based or recurring options. I think you would start at the top with “Subscribe and Save” but I’m leaving this one out of the list because I don’t think it is relevant to a more closely defined subscription box industry. If you like to buy the same air filters, diapers, and paper towels on a recurring basis then you are automating away the recurring part of online ordering but not really opting into a curated experience that subscription boxes specialize in.

I’ve attempted to simplify the big patterns here but I’m sure there are more. Send me a quick note if you think I missed something big and vote in the poll below if you run one of these businesses! If you are just starting a subscription box, check out the Subscription Box Checklist to get started.

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