Subscription Box Industry Presents an Opportunity for Advertisers

Flashback to a decade ago and the term “subscription box” was essentially non-existent. At a time when the majority of retail existed through local brick-and-mortar stores and home delivery from postal-mailed catalogs, the explosion of online shopping has since transformed the industry, giving way to entirely new retail sub-industries, including the rapid emergence of the subscription box industry.

The evolution of the subscription box economy

When subscription box innovators BirchBox and Graze first entered the category in 2010, they had little competition. However, many took notice of their quick success and saw an opportunity for entrance into the category. 2013 marked a year of vast expansion for the micro-industry as many new players entered the field resulting in nearly 3,000% growth in the past three years. Today, subscription boxes exist in nearly every retail category from meal kits to pet toys to clothing, to health and beauty and beyond. Now, even traditional retailers like Starbucks and Sephora are entering what has become a multi-billion dollar industry. Venture capital and acquisitions are chasing the category leaders – Dollar Shave Club is just one example. Convenience and the built-in mechanism for repeat purchase and loyalty are key success drivers.

The average subscription box consumer

While there’s seemingly a subscription box that caters to every individual, the subscription box consumer is largely female, making up 75% of overall subscription box purchases. When it comes to age breakdown, research shows that despite assumptions that this market caters to the millennial generation, more than half of subscription box consumers are 35 and over. Shoppers also tend to have above average income and education levels, live in urban settings or in the surrounding suburbs – and although they tend to have higher disposable incomes – they value the convenience of subscription boxes and believe they’re more cost effective than shopping in physical retail stores.

A growing opportunity for advertisers

As advertisers seek new ways to reach their target consumers, subscription boxes present a valuable new channel through which they can reach a growing audience. By paying to place insert media into subscription boxes, advertisers can target a segment of consumers who have a shopping mindset at a relatively low cost. And as the evolution of subscription box industry shows no signs of slowing down, it’s only logical that the size of the opportunity for advertisers will continue to grow.

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