How Subscription Services are Changing the Personal Care Game
SUBSCRIPTION BOXES ARE REDEFINING THE WAY WE APPROACH OUR SELF CARE ROUTINES. ACROSS EVERY SUBSET OF THE BEAUTY AND PERSONAL CARE MARKET, COMPANIES ARE USING SUBSCRIPTION-BASED DISTRIBUTION TO CULTIVATE NEW AUDIENCES, REINFORCE BRANDING, AND INCREASE CUSTOMER LOYALTY.
To consumers, these corrugated containers represent the convergence of style, technology, and convenience. Posting a value of nearly $2.6 billion dollars and encompassing more than half of all online shoppers, it also represents the future of e-commerce.
That’s only the start of the appeal. Each box offers marketing potential, product launch opportunities, and a pipeline to some of the most niche, hard-to-reach audiences.
Digital Microtargeting in a Tangible Way
Since we are now able to market with pinpoint accuracy, and manufacturing workflows are becoming more streamlined, servicing a highly targeted niche audience is no longer an impossibility.
Box services for male audiences? Check. Female? Check. Oily skin? No problem. Dry skin? That too. A gluten-free young professional who runs 4-5 days a week? There’s a box service for them.
What’s more — the data cultivated from Facebook, Google, or abandoned shopping carts help define the markets for future subscription services.
Subscription services are targeting underutilized demographics, like men’s care (which now accounts for 18% of subscribers in the personal care segment)
This data can also help companies increase profits through up charges and add-ons. Most services are in touch with their customers — through Instagram or email — with a sophisticated workflow of pre-shipment reminders, additional sales opportunities, and increased exposure to new brands.
The Psychology of Subscription Services
For these recurring services, there are two main models in the personal care segment. Curated & Customized services ship you a monthly box of products tailored to match your skin type, fashion sense, or lifestyle.
Replenishment services automatically ship refills on a predetermined schedule or when a smart device is notified or alerts you when you’re running low. Both models offer psychological rewards, either in the form of convenience, or a rise in the level of neurons in the pleasure centers of our brain.
In a 2006 study, ‘Pure Novelty Spurs the Brain,’4 researchers Nico Bunzeck and Emrah Düzel found that the ‘novelty center’ of our brain — the SN/VTA — can be activated by the unexpected. They discovered neurons that were more stimulated when a subject was shown a series of repeated images, but were also shown new images on occasion.
This might help explain the success brands have been having on getting subscribers to join. We are hard-wired to find value in getting a gift, even if it’s a gift we pay for ourselves.
So who’s winning? Several companies have proven to be key players in this segment of mail order commerce.
Harry’s | Dollar Shave Club may have been the company that put one buck razors in the zeitgeist, but Harry’s has built upon that model with a brand of sophisticated masculinity. They believe that self care is more than just a close shave and some tonic. Its about a full line of skin creams, body wash, and styling products that round out a man’s grooming habits.
Birchbox | The leading company in blending fashion and personal care, Birchbox makes the connection between one’s skin cleanser and their clean pair of open-toed shoes. They are selling a personality, and connecting brands with audiences that match them in a meaningful way.
Quip | Quip started with a toothbrush (a sophisticated one) and built their subscription model on keeping customers stocked with toothpaste and replacement heads. They offer the convenience of not needing to think about such a prosaic purchase, and are making tooth brushing more exciting.
Stitch Fix | With a focus on fashion, Stitch Fix offers boxes catered to women, men, and kids. Their profile assessment tools go beyond the fit to ask how much you might be interested in spending on clothes, or how bold you want your selection to be (“bring it on — I’m into trying new brands”). Stylists are assigned to each customer, providing a touch of personal service.
IPSY | As the largest cosmetic subscription service, IPSY seeks to ‘inspire individuals around the world to express their unique beauty.’ Their product offerings run the gamut of skin cleansers to skin creams; concealers to compacts, and is constantly introducing new up and coming indies.
When brands align themselves to a platform that matches their own culture and personality, sales can be impacted in an enormous way. Subscription boxes have experienced more than 890% growth in the last five years,5 a boom in profits is allowing companies to continue improving their user experience, sales touchpoints, and marketing reach.
All of this leads back to the fact that subscription boxes are one of the most effective ways to distribute something that is hot in demand (or would like to be). Predicting product supply and the logistics of distribution become much easier to manage. So much in fact, that some brands are pushing subscription plans over on-demand purchasing.
In the brick-and-mortar retail world, there’s an old theory that when a person tries something on, they’ve often already made the decision to buy it. Another theory states that on-the-fence customers are more likely to buy if they can try it out, and yet another one speculates that new brands are discovered through personal recommendations.
Subscription box services acts on all of these, and includes a truckload of other commercial advantages. Expect these services to continue influencing personal care for the foreseeable future.
Accupac develops and manufactures a wide range of consumer, over-the-counter, and personal care products. Our facilities are FDA and ISO certified, designed to integrate seamlessly into your manufacturing workflow. We formulate the same quality product you’d have in-house. We are committed to being a world-class leader in sustainable contract manufacturing and continuously optimize all aspects of our business through 5S lean management initiatives.
- Clutch, More Than Half of Online Shoppers are Members of Subscription Box Services, as Industry Caters to Consumer’s Desire for Convenient, Personalized Services, September 2019
- Hitwise, Subscription Boxes in 2018 US Market: Online Industry and Consumer Trends
- Ramasamy, Ashwin, How big is the global subscription box industry?, April 2018
- Pitchbook, Agar, Ian, The Science and Data Behind the Subscription Box Craze, August 2006
- Forbes, Kestenbaum, Richard, The Subscription Box Business Continues To Grow And Change, May 2018
This article was published on December 1, 2019