From Meals to Makeup:An In-Depth Look at Today’s Subscription Services

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OverviewSubscription services date back to when milk men delivered milk to doorsteps and paper boys tossed newspapers on lawns. In more recent years, these services have undergone dramatic transformation, particularly in the world of e-commerce. Subscription services have reshaped a wide spectrum of industries—from fresh meals to full wardrobes. Today’s consumer will find an incredible array of products and experiences sold through thousands of subscription services, worldwide. And the trends only point upward—visits to subscription box websites have increased 3,000% in the past three years.

Subscription services have been utilized by a range of businesses, from small startups to well-known giants like Wal-Mart and Amazon. Still, at any scale, challenges remain—competition is fierce, margins are thin, and consumers are variable. As a result, businesses must consistently push themselves in new directions and find ways to engage subscribers before they cancel.

The key to success with subscription services is to listen to customers and focus on the details. At Shorr Packaging, we’ve done just that—we surveyed 500 established subscription box subscribers to better understand their motivations. We’ve investigated who these subscribers are, what they buy, how long they subscribe, and what it takes to earn their loyalty long-term.

If you’re a professional looking for data to impact your strategy and help increase business, we are confident this study will deliver what you need.

Shopping Habits

Overview

Subscribers: A Snapshot

Key Takeaways

Category Leaders

Consumer Lifecycle

Custom Packaging

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Subscribers: A SnapshotOn the whole, subscription box subscribers represent a broad cross section of consumers.

More than half of subscribers are single and don’t have children.

Average household income: $64,560/year

59% are female and 49% are male.

40% are college graduates and an additional 38% have completed some college.

AGE 60% are between the ages of 18-33. Almost 20% of subscribers are older than 42.

Shopping Habits

Overview

Custom Packaging

Subscribers: A Snapshot

Key Takeaways

Category Leaders

Consumer Lifecycle

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Shopping Habits

Overview

Subscribers: A Snapshot

Shopping HabitsOur studies found that the most popular subscription services feature products that allow for creative, custom packaging. That said, custom packaging is not something to overlook. The average subscriber is somewhat conservative and likely not subscribing to more than one or two services at a time. If you’re one of their services, you have a narrow window of opportunity to make a great impression.

$106

Average Subscriber Online Monthly Spending

$34 spent on subscription services

Subscribers are less likely to purchase baby supplies or alcohol through a subscription service.

The three most popular categories of subscription service are:

Apparel

Entertainment Products

Beauty Products

These categories are overwhelming favorites across all age groups.

The Least Popular

A majority of subscribers receive one or two services at a time. Only 13% of people report subscribing to three or more services at a time.

Number of Subscriptions

The Most Popular

Custom Packaging

Key Takeaways

Category Leaders

Consumer Lifecycle

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Shopping Habits

Overview

Subscribers: A Snapshot

Custom PackagingAt the end of the day, packaging matters. Whether the results are positive, negative or something in between, consumers take note of packaging. We have data to show it definitively impacts subscription lifecycles. As with any business strategy, it’s important to understand demographic nuances when estimating the importance of a potential investment.

Consumer Lifecycle

Custom Packaging

Women report being “very likely” at a higher rate than men (+19%).

Consumers with a household income between $75,000-90,000 are most likely to notice custom packaging, though attention to custom packaging is consistently high across all income brackets.

76% of subscribers say they are “likely” or “very likely” to notice custom packaging design.

Key Takeaways

Category Leaders

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Shopping Habits

Overview

Subscribers: A Snapshot

Custom Packaging

More women than men (+13%) describe custom packaging as a key part of the experience.

of subscribers report they are more likely to continue their subscription simply because of customized packaging.

of subscribers between the ages of 18-33 consider custom packaging a key part of the subscription experience.

67% of subscribers say customized packaging is a key element of their subscription box experience.

Nearly half of all subscribers have shown custom packaging to friends and family, and 1 in 3 subscribers have shared an image of custom packaging on social media.

30%

78%Key Takeaways

Category Leaders

Consumer Lifecycle

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Shopping Habits

Overview

Subscribers: A Snapshot

Consumer LifecycleConsidering the average lifecycle of a subscription is about 4 months, it’s crucial to make great impressions on subscribers up front, then focus on ways to maintain a sense of high value over time. Specifically, we’ve found consumers with higher incomes are harder to satisfy. Overall, consumers are most likely to end a service based on perceived value. This indicates a substantial opportunity for custom packaging to work on higher income consumers (they tend to notice it more) and to add to the overall perceived value for every consumer.

Key Takeaways

Category Leaders

Consumer Lifecycle

Custom Packaging

More than half of consumers have canceled at least one subscription service.

Relative to women, men sign up for more services and cancel more services.

Young people can be hard to hold onto. 69% of subscribers between the ages of 18-33 cancel subscriptions within three months, and a third of those are gone within one month.

Consumers with a household income less than $30,000 are most likely to keep a service beyond 12 months, while consumers with an income of more than $90,000+ are most likely to cancel within one month.

The average length of a subscription is about 4 months (125 days).

AGE

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Overview

Subscribers: A Snapshot

Consumer Lifecycle

Reasons For Subscription Cancellation

“Wasn’t worth the money”

“Customer service problems”

“Receiving products too frequently”

“Couldn’t afford it”

“Did not enjoy the products”

64%

34%

20%

7%

5%

Key Takeaways

Category Leaders

Shopping Habits

Custom Packaging

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Overview

Subscribers: A Snapshot

Category Leaders

Category Leaders

Men’s Apparel:Trunk Club

Trunk Club was chosen as a favorite. 76% of Trunk Club fans cited packaging design as the leading factor in making Trunk Club their favorite.

Images courtesy of Nordstrom and Trunk Club

Consumer Lifecycle

Shopping Habits

Custom Packaging

Key Takeaways

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Overview

Subscribers: A Snapshot

Category Leaders

Category Leaders

Women’s Apparel:Le Tote

As with men’s apparel, packaging design was again cited as the primary factor—establishing Le Tote as the favorite.

Le Tote image courtesy of Le Tote

StitchFix was the lowest rated box in the category, earning just 10% of the vote. In addition to design, consumers rated it poorly for lack of packaging protection and wasteful packaging.

The Least Favorite

Stitch Fix image courtesy of sweetsuccessbysara.com

Consumer Lifecycle

Shopping Habits

Custom Packaging

Key Takeaways

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Category Leaders

Alcohol:Vinebox

70% of consumers listed packaging design as the reason they prefer Vinebox over other alcohol subscription companies. 37% also mentioned design as a factor.

Stacked box image courtesy of Vinebox

Also significant, for 47% of consumers, “protection of product” was cited as the reason they prefer Vinebox.

Packaging Inside Counts Too

Open box image courtesy of winesdays.com

Overview

Subscribers: A Snapshot

Category Leaders

Consumer Lifecycle

Shopping Habits

Custom Packaging

Key Takeaways

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Category Leaders

Women’s Grooming:Luxe Box

Luxe Box beat out Birchbox as the favorite in the beauty products category. 70% of Luxe Box fans cited packaging design as the most significant factor.

Ipsy image courtesy of www.sweetnessandsolitude.com

The second most preferred subscription service was Ipsy. As a leader in creative packaging, Ipsy provides products in a bag, rather than a box. This change of pace creates memorable experiences for customers and turns those customers into loyal fans.

A Leader That Thinks Outside The Box

Luxe Box image courtesy of blogto.com

Overview

Subscribers: A Snapshot

Category Leaders

Consumer Lifecycle

Shopping Habits

Custom Packaging

Key Takeaways

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Key TakeawaysThere’s no question, subscription services are both hugely popular and they pose significant challenges when it comes to subscriber retention. The upside, however, is that custom packaging can have dramatic impacts on customer experiences and in turn drive business long-term. Custom packaging differentiates brands from competitors, it reflects enhanced value onto the existing products and it turns curious customers into loyal fans. As a result, businesses looking to survive and thrive in the subscription service space need to find ways to make strong impressions as quickly as possible.

Our data shows that one of the surest ways to make a strong impression on subscribers, and to consequently retain them beyond average lifecycles, is to introduce and optimize custom packaging. The conclusion is unwavering: smart, creative packaging creates an emotional response in consumers and has a positive impact on their relationship with brands and their perception of the products those brands deliver.

Get in Touch

Overview

Subscribers: A Snapshot

Key Takeaways

Category Leaders

Looking to learn more about custom packaging opportunities for your business?

Consumer Lifecycle

Shopping Habits

Custom Packaging