Subscription boxes are a huge industry. It’s easy to understand why. They’re the perfect intersection of a useful product, a convenient service and a memorable unboxing experience. But like all industries, for every success, there are countless failures. Maybe its owners didn’t do their research, maybe they didn’t plan for complications, maybe they just didn’t have the motivation and drive necessary for success. Whatever the reason, the outcome is the same: their subscription box didn’t survive.
But there are always lessons in failure. So, let’s dive into 7 reasons why subscription boxes fail. And if you want a little extra reading, check out these 7 tips for creating subscription box services.
They’re not niche enough.
We’re borrowing a cliché here, but: everyone and their grandmother has a subscription box service. There’s a glut on the market, especially in broad customer interests like clothing, makeup, cats, and healthy snacks. To really succeed these days, a smart subscription box will get specific, drill down and dig deep. It’ll go niche.
No one wants yet another monthly box of dog toys. But a monthly box of natural dog treats? That’s getting into a market that won’t be quite as saturated. Subscription box customers live full lives, full of potential interests, burgeoning hobbies and even pain points (like “I can’t find a place to get natural dog treats nearby”). Subscription boxes that don’t work to appeal to these needs won’t be around long.
They’re not using packaging properly.
Let’s be frank. Getting right down to it, the unboxing experience is the entire point of a subscription box service. Sure, people want what’s inside that box. But more than anything, they want that feeling of seeing a stylish, custom, personalized box arrive at their doorstep, just for them. They want the sheer excitement of picking up that box, opening it, and discovering the goodness inside. Like it’s Christmas morning all over again.
And custom packaging is the way to do that.
A huge reason why subscription boxes fail is that they don’t capitalize on this. Those that use plain corrugated boxes, wrap their products in packing paper instead of printed tissue paper, or don’t include a personal thank-you card with a great joke or witty comment? There’s no reason for customers to stick with them, no matter how convenient or useful the products inside.
Custom packaging is a necessity. Check out 5 unboxing experiences that blow everyone away.
They’ve got bad websites.
If that website doesn’t look good, if it doesn’t please the eye and make products shine, that subscription box is doomed. If that website doesn’t sell, if it doesn’t offer up the right info and make customers drool, that subscription box is doomed. And if that website doesn’t work, if it doesn’t make sign-up and payment an absolute breeze, that subscription box? You guessed it. Doomed.
Their pricing models and offers are wrong.
People like choice, but not too much choice (a contradiction, we know). It’s why having box options that vary in price and contents can pull in more business. There are people who will pay extra for the privilege of receiving a more expensive subscription box than someone else. There are also people who want value—a basic set of products and no other frills. It’s important that subscription boxes know who their audience is. Could be one or the other. Could be both.
Discounts can actually hurt a subscription box service (either through audience perception or by affecting their bottom line). Contests tend to attract attention, but usually only those who simply want something for free, not customers who will stick around for the long haul.
But content? Extra items? Exclusive products? Those are gold for pulling in customers who will stay. Subscription boxes must know their audience or it’s all over.
They’re not using marketing properly.
Subscription box services are dead without a strong marketing strategy. And marketing strategies are dead without the right people to execute them. That means copywriters, art directors, social media planners—people who know how to sell.
And then that strategy and those people need to be where their audience is. Whether that’s social media, trade shows and exhibitions, public festivals and concerts, Etsy groups or reddit. A glaring reason why subscription boxes fail is because their leadership fails to plan their marketing properly.
They’ve got bad shipping practices.
One of the biggest costs—and therefore, one of the biggest threats to its long-term success—that a business faces is shipping charges. Dimensional weight shipping can quickly overrun any budget if packages aren’t optimized for size and weight. You can read more on our blog about how to manage dimensional weight costs and save your business some real headaches.
But that’s not the only threat. Unreasonable shipping costs and wait times can turn away customers. Thanks to some of the biggest players in the online world, fast shipping is now an expectation, no matter what kind of delivery a customer pays for. Heading off customer objections means finding ways to reduce those costs and times. That could mean including shipping in the price of the box, or negotiating lower rates with your shipper of choice.
Their budgets are all wrong.
The idea’s solid, the strategy’s good, and the team’s great. But a startup project like this takes the right money going to the right places. Products, packaging and people are, of course, paramount. But so is the necessary marketing and advertising to get the word out. And, like it says in the last point, businesses tend to underestimate what their shipping costs will be.
If the people in charge of the money can’t craft a proper, feasible budget (and plan for the road ahead), those subscription boxes likely aren’t long for this world.
Research, planning, foresight and determination are all essential skills and traits when it comes to the success of any business endeavour. Without them—particularly in the world of e-commerce and online shopping—it becomes easy to see why subscription boxes fail.
The Packaging Company can help you make sure at least one part of your business is set for success: your packaging. Our custom shop and its free online packaging design tools let you create the custom packaging that’ll make your subscription boxes stand out. Whether it’s a simple label, some branded packing tape, or full colour printed boxes, you’re equipped to stand out and shine.
Still want to know more? Read our 7 tips for creating subscription boxes.