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No need to leave the house. Subscription boxes disrupting retail industry

Traditional retailers like Target and the Gap are taking advantage of a boom in consumer interest for subscription boxes.

It’s the ultimate model for a consumer base obsessed with convenience — companies are mailing pre-packed boxes of products ranging from healthy foods to upscale cosmetics. The growing subscription box market draws in about 5.7 million customers, according to a 2017 Hitwise report.

Target just launched a clothing subscription box featuring its popular kids line, Cat & Jack. It’s called the Cat & Jack Outfit Box, and the subscription gives customers the option to subscribe on a quarterly basis. The clothing box includes six to seven Cat & Jack items—handpicked by Target designers—delivered straight to customers’ doors.

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“Every special delivery will contain a surprise mix of bodysuits, leggings, rompers and more, as well as an additional gift. Any items can be returned online or in stores. The boxes are available at the start of each season, available in sizes newborn to 24 months, and will include items the next size up to match a growing baby,” Target announced.

Each box is $40 and available to order at Target.com while supplies last. The next box will be available in the spring.

The subscription model has been around for years, with brands like Birchbox and FabFitFun dominating the niche e-commerce market. Now, the model is giving traditional retailers another source of revenue. Gap Inc. also started testing a similar baby outfit subscription box last year. The subscription includes six pieces of clothing ranging in sizes valued at $100.

The market has seen an 831 percent increase in monthly website visits to subscription box websites since 2014, according to the Hitwise report.

“That’s what we’re seeing with the new Target box, the Sephora Play box, etc,”John Fetto, senior analyst at digital marketing insights firm Hitwise, told Forbes. “Even the traditional pure-play companies will need to focus on generating more business through replenishment in order to account for the constant churn of subscribers and the high costs of acquiring new customers.”

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Grocery chains are also cashing in on the model to compete with food services like Blue Apron. Walmart is now touting that its meal kits are hassle-free, and it doesn’t require a subscription like competitor services like Blue Apron. Walmart meal kits come in several brands including Home Chef and Takeout Kit. Meal kit options include snack boxes, farm crates of vegetables, coffee and tea boxes, healthy boxes, bacon-lover delights, and international snacks. Prices range by box.

The meal kit service concept is fairly new, and about 19 percent of U.S. adults have tried a home delivery meal kit service like Blue Apron, Hello Fresh or Plated, according to data group Morning Consult. Of that group, 38 percent currently subscribe to a meal kit service. However 39 percent of those surveyed who have tried a home-delivered meal kit service used the service just once, and 26 percent used the service for less than a month.

Other grocery retailers like Kroger have also introduced meal kit services for consumers.


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