The earliest-cited subscription box service appeared in 2004. Named The Sampler, the simple service offered a collection of samples from “indie crafters, record labels, and zines” mailed to members’ homes.
The subscription box economy grew slowly at first. Then, in 2010, Birchbox, a cosmetics monthly sample box service, launched and rapidly grew in popularity. In less than a year, Birchbox had 45,000 members and 25 employees. The potential success of the subscription box business model quickly grew apparent.
Today, thousands of subscription box services exist, and Birchbox is now the sixth most-popular subscription box service. From April 2014 to April 2018, the industry grew by 890%. With so many subscription service brands available, what are the most popular ones?
Clutch surveyed 528 online shoppers to learn who subscribes to these services and which brands they subscribe to.
Our report discusses the top subscription box service brands, why they succeed, and three trends that help explain why subscription box services exploded in popularity in the 2010s.
- The Top Subscription Box Service Brands
- The Psychology Behind Subscription Boxes: Services Appeal to Humans’ Desire for Convenience and New Experiences
- Three Trends That Created the Subscription Box Explosion
- The five most popular subscription box service brands in the survey are Dollar Shave Club (29%), Ipsy (21%), Blue Apron (17%), BarkBox (17%), and HelloFresh (16%). The top brands either replenish existing products for consumers or offer personalized collections of new items on a regular basis.
- More than half of online shoppers (54%) say they subscribe to a subscription box service. The subscription box industry appeals to consumers’ desire for convenient, novel experiences.
The Top Subscription Box Service Brands
The most popular subscription box brands allow consumers to sample new products or receive an automated replenishment of existing products.
Clutch found the top subscription service brands to be:
- Dollar Shave Club: 29%
- Ipsy: 21%
- Blue Apron: 17%
- BarkBox: 17%
- HelloFresh: 16%
The most popular subscription box services fall into two of the three major categories of boxes, according to management consulting firm McKinsey & Company.
McKinsey & Company defined these categories and measured the percentages of services that fall into each category:
- Curation (55%): A service sends collections of new items for customers to sample and use.
- Replenishment (32%): A service sends consistent replacements of the same types of products.
- Access (13%): A service allows members to access perks and discounts on items.
Dollar Shave Club offers a replenishment service, while Ipsy, BarkBox, Blue Apron, and HelloFresh offer different interpretations of a curated service.
Access services include brands such as JustFab and NatureBox.
Dollar Shave Club Succeeds With Simplicity and Humor
The most popular subscription box service in Clutch’s survey is Dollar Shave Club (29%), a replenishment subscription box for personal grooming products that emphasizes its convenient, basic service.
In 2012, Dollar Shave Club burst into the subscription box scene with a humorous viral video advertisement and a simple premise: high-quality, no-nonsense razors delivered regularly to people’s doorstep for $1 (plus shipping).
Dollar Shave Club’s original viral video advertisement stood out for its absurdist humor, deadpan jokes, and crude language.
“And do you think your razor needs a vibrating handle, a flashlight, a backscratcher, and 10 blades?” the company’s original advertisement jokingly asks viewers. The company argued that its products can help with basic but often overlooked personal grooming needs, simply and consistently.
Now, the company offers customized personal grooming packages and ships toothpaste, face cleanser, deodorant, and more alongside its razors.
Dollar Shave Club succeeds as a replenishment subscription box because it fills a basic need for personal grooming products, allowing members to restock products regularly without needing to make decisions or go out to the store.
Ipsy and BarkBox Curate Personalized Products for Makeup Lovers, Dog Owners
Ipsy and BarkBox offer curated services focused on sending cost-efficient, personalized collections of new items for members to try and keep.
Ipsy sends samples of cosmetic products for makeup lovers, while BarkBox offers collections of dog treats and toys for doting pet owners.
An Ipsy subscription box collection. Source: Reddit.
Becky Beach is an Ipsy subscriber and owner of Mom Beach, a personal finance and lifestyle blog. She speaks of the cost savings of the service: “I was spending $1,000 on a year on makeup at [makeup store] Sephora previously. Since getting [Ipsy’s] Glam Bag Plus, I hardly ever shop at Sephora to buy the latest makeup. I get new makeup sent to me [instead]. ... I think I have saved lots of money by getting the Glam Bag Plus.”
These curation brands retain subscribers by ensuring each box offers an exciting, new collection of items catered to subscribers’ individual tastes, often at lower costs than if the subscriber purchased each item separately.
Blue Apron, HelloFresh Help Members Experiment With New Meals
Meal kit delivery services Blue Apron and HelloFresh curate new recipes for members to try each month, based on their personalized tastes. The services send all the ingredients required to create 2–3 meals on a weekly basis.
Paul Moyer, author of SavingFreak.com, orders HelloFresh’s service for his family. He likes the service’s:
- Convenient variety of items
- Cost savings
Services such as HelloFresh and Blue Apron allow subscribers to experiment with different types of meals, according to Moyer: “There is very little chance we would go through the trouble of finding and creating the dishes we receive [without the service]."
These subscription boxes also solve an issue many people run into when they cook — needing only a small amount of an ingredient but being unable to purchase the ingredients in small quantities from the store.
“We really want to expose our kids to different types of food, but buying all the ingredients can get very expensive,” Moyer said. “By having the meal kit delivered, we save the cost of buying an entire jar of a spice we will only use for one meal.”
Meal kit delivery services offer curated experiences for one of the most basic needs, food.
Subscription Box Services Appeal to Humans’ Desire for Convenience and New Experiences
Subscription boxes succeed because they play into basic elements of human psychology, including our desire for services that are:
Clutch found that more than half of online shoppers (54%) say they are a member of a subscription box service, indicating these boxes’ popularity.
Consumers nowadays often have less free time than in the past, increasing their desire for convenient, easy shopping experiences. The internet means work sometimes doesn’t have a clear end, employees are commuting further to their jobs, and it’s increasingly likely that both parents hold jobs.
Subscription boxes allow consumers to receive items directly to their homes on a regular schedule, which can be more convenient than going to the store to pick up products in-person.
Curated subscription boxes also appeal to humans’ desire for novelty. Areas in the brain associated with rewards and euphoria fire off when someone experiences something pleasurable and new, including opening packages.
Consider the widespread popularity of “unboxing” videos, a category of videos online where viewers can simply watch people open, unwrap, and discuss new products they just received or bought.
A selection of unboxing videos on YouTube.
Unboxing videos highlight consumers’ obsession with simply receiving new items, regardless of if they use them in the long-term. Opening new items is a novel experience, and subscription box services, especially ones that are curated, allow members to feel that experience every month.
Overall, subscription box services feed consumers’ desire for both convenience and the excitement of new experiences.
Three Trends That Created the Subscription Box Explosion
Subscription box services rose in popularity thanks to:
- The popularity of e-commerce
- Increased social media use
- Growing consumer comfort with paying for value over time
Amir Elaguizy is the co-founder of Cratejoy, a global marketplace for subscription box services. He noted the three major trends, providing context to the explosion of subscription box companies.
E-Commerce and Subscription Services are Increasingly Intertwined
In 2019, the total market share of retail sales that happened online surpassed those that happened in-store for the first time ever. Consumers are increasingly comfortable with purchasing items online.
As e-commerce grows, it’s often tightly connected with the idea of subscription box services, regardless of whether a company was initially built on the premise of subscription boxes, Elaguizy said.
Consider Sephora. The makeup chain operates 2,500 physical stores worldwide, but in 2017, 13% of its sales also happened online, indicating the growing presence of its e-commerce footprint. The brand also operates its own subscription box service called PLAY! By Sephora, which was tied with Birchbox for the 6th-most popular subscription box service in Clutch’s survey.
“[E-commerce has] shifted. ... It used to just be you’re a subscription box or you’re an e-commerce company,” Elaguizy said. “Now, it’s just all direct-to-consumer e-commerce. Sometimes they have subscriptions, and sometimes they don’t.”
Social Media Allows Niche Interests to Flourish and Become Profitable
Elaguizy also states that social media has allowed niche interest communities to form that subscription boxes can then profit from: “The engagement of social media has allowed people to develop much more nuanced interests, and that has created this market where people who understand those nuances ... come together and say, ‘I can put together an experience that nobody else will.’”
“The engagement of social media has allowed people to develop much more nuanced interests, and that has created this market where people who understand those nuances ... come together and say, ‘I can put together an experience that nobody else will.’”
Big retailers such as Macy’s and Walmart may not recognize the interests of, say, Brazilian jiu-jitsu, said Elaguizy. However, when a 5,500-person Facebook group exists to showcase that interest, smaller retailers and entrepreneurs can clearly see how to profit off of Brazilian jiu-jitsu by delivering a niche subscription box.
Consumers Are More Willing to Invest in Long-Term Services
Finally, Elaguizy argues that consumers are increasingly comfortable with the idea of paying for value over time.
“Even something as simple as Netflix helped make consumers comfortable with the idea that I’m putting my credit card on a website, and I’m going to receive ongoing value from that transaction,” Elaguizy said.
Subscription box services challenge the notion that each item needs a specific price. Netflix subscribers don’t pay for every movie or show on the platform; instead, they pay for the opportunity to see content, both old and new, on Netflix. This is a long-term investment.
Similarly, consumers trust that the value they will receive over time from the subscription boxes is worth the ongoing investment, even if they don’t use every product in every box.
Subscription box services depend on consumers’ trusting the long-term value of their service. Oftentimes, a company won’t break even on the cost of sending products to its customers until several months in, Elaguizy said.
“A lot of times, [companies are] paying 2-4 months’ worth of revenue upfront to acquire a customer, and they need that 5th, 6th, 7th month of renewals to actually make any profit on that customer,” Elaguizy said.
“A lot of times, [companies are] paying 2-4 months’ worth of revenue upfront to acquire a customer, and they need that 5th, 6th, 7th month of renewals to actually make any profit on that customer.”
Both customers and companies need to develop a long-term relationship to make a subscription box service successful.
Subscription box services succeed due to e-commerce’s growth, social media’s prevalence, and consumers’ belief that the services are worth the long-term payments.
Subscription Box Services Appeal to the Majority of Online Shoppers
More than half of online shoppers say they are a member of a subscription box service. The five most popular brands in Clutch’s survey are Dollar Shave Club, Ipsy, Blue Apron, BarkBox, and HelloFresh.
Dollar Shave Club offers a simple replenishment service of personal grooming products for its members. Ipsy and BarkBox curate makeup and pet owner products, offering exciting, personalized boxes. Blue Apron and HelloFresh allow members to experiment with new meals.
Subscription box services appeal to members’ desire for convenient, personalized shopping. The industry became popular thanks to e-commerce’s growth, social media, and consumer comfort with paying for value over time.