Curation: The 2nd Type of Subscription Box

For part 2 of our series on the 3 types of subscription box categories, we are going to discuss curation.

Curation represents the biggest chunk of the population of those who use subscription services. Not surprisingly, the two main reasons that people give for using a subscription service for curation is

  1. The surprise/delight factor
  2. They heard so much word of mouth about the service, they couldn’t resist

In this category, the three biggest players at the time of this writing are Birchbox, Blue Apron and Stitch Fix. Ask any woman, and even some men how they feel on the day they are receiving their “Fix” and they will liken it to Christmas morning. Adults don’t get to be surprised and delighted as much anymore, so curation fits the bill.  Pun intended.

According to this article by McKinsey, in order to continue to subscribe, people “expect personalized subscriptions to become more tailored over time: 28 percent of both groups (curation and access, which we will talk about next time) said that a personalized experience was the most important reason for continuing to subscribe.”

As of now (October 2018) conversion rates are relatively weak, with only 7% of people that have heard of a service (of the 54% of the population that has even heard of it) are still subscribing after trying a service. This indicates there is lot of room to grow as more and more people become aware of them.  Word of mouth and increased advertising spend will contribute to growth here in the future.

People that subscribe for curation are also expecting great values and volume discounts.  Stitch Fix, for example, grants a 25% discount on the entire purchase if the customer keeps all 5 items, and waives the styling fee.  Customers are also seeking something new and innovative, which indicates that people are interested in experimentation, and curation experiences are a great way to deliver. A new food type or a daring clothing option are much easier to try when it just arrives on your doorstep as opposed to having to seek out the new and unknown on your own.

As with all subscription services, churn is a real concern, with as much as 40% of customers cancelling their subscriptions, it continues to be a challenge to continue to surprise and delight customers while delivering superior customer service and great values.

Subscription services are just getting started.  Next time we will talk about the final type of subscription service, access. Stay tuned!