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Subscription Boxes Experience Growth Amidst Coronavirus

April 27, 2020 Carolyn Harding

Shutterstock_1390237637 Happy woman sitting on couch at home opening carton box received parcel package from relatives or shopper make order internet website satisfied client, easy and fast service commerce delivery concept

With so much of the population sticking strictly to the necessities during the current pandemic, it may come as a surprise to many that subscription boxes have experienced steady – and in some circumstances, increased –  growth. Throughout what has been a very uncertain time for consumers, subscriptions have been able to offer predictability and convenience, proving the subscription industry is built for scale. Many subscription box brands have used this time to further innovate, adjust and launch new products, making their businesses even stronger for when the economy and consumer spending habits return to normal.

Several Industries See Surge In Subscription Box Demand

According to a recent subscription impact report, more than 22% of companies have seen subscriber acquisition rates grow during the current pandemic. Food and beverage subscription boxes in particular have been in high demand, as much of the population is keeping grocery store trips to a minimum. The prepared-meal service, Freshly Inc., delivered 5 million meals in the month of March alone, a major jump from the 3.5 million the company predicted in February. Companies like Blue Apron and HelloFresh have also experienced a flood of new customers, as several first-time buyers are turning to these food services for their convenience and price.

“Within the span of 48 hours [in early March], we saw an increase in orders that surpassed the staff we had in place to fulfill this higher-than-expected demand,” said Blue Apron CEO Linda Findley Kozlowski.

Similarly, subscription boxes surrounding the education industry have also seen an increased demand. KiwiCo, for example, which delivers STEM-based activities monthly for kids, has seen “a huge spike in subscriptions and one-off purchases” in its ecommerce store during the COVID crisis, according to the company’s Chief Product and Merchandising Officer, Lisa Hom. Education, food and beverage subscription boxes are just a handful of the many industries that have proven their worth to consumers who are looking for convenient and safe options. As a result, many subscription box brands have been able to expand their customer bases during this challenging time. The hope, of course, is that this influx of new customers will build stronger businesses in the long run.

Subscription Marketers Should Remain Flexible & Understanding

The growing subscription box demand has been met with increased subscription box competition, and many subscription brands are having to consider a variety of options for customer acquisition and retention. Subscription brands looking to grow must remain flexible and understand the current environment, including the needs of consumers during the quarantine period.

Shutterstock_1478766938 Brown carton box, Beauty Subscription Box

Barkbox Inc., for example, is letting customers pause their subscriptions until people “feel more secure about their finances.” Brands like FabFitFun and Birchbox, on the other hand, are taking more direct approaches to help those affected by the pandemic. FabFitFun began offering healthcare workers special editions of their subscription boxes, including both essentials and non-essentials meant for relaxation and boosting spirits. Birchbox is partnering with hospitals across the country to donate 45,000 of their signature beauty boxes to healthcare workers on the frontline.

When subscription brands show understanding, provide transparency with regard to product availability and deliverability, and offer the flexibility to temporarily close accounts, defer payments or pause subscriptions, consumers are likely to remember that and feel a sense of loyalty to the brands.

Subscription Marketers Have The Opportunity To Convert Customers Into Long-Term Members

Stay-at-home orders are already subsiding, so subscription box brands that have benefited from coronavirus need to prepare to adjust again. With circumstances changing every day, subscription marketers should use this unique time to establish long-term buyers.

Subscription box brands must convey that their services have the ability to deliver much more than just beauty products, workbooks and easy meals. When marketed correctly, the appeal of subscriptions for consumers is found in value, access and convenience. And now more than ever, those factors are of the utmost importance in the eyes of many people.

Are You Looking To Improve Your Subscription Capabilities?

Digital Media Solutions® (DMS) leverages shifts in consumer purchasing patterns to help clients create, launch and optimize recurring revenue, DTC subscription programs with CPA-based, multi-channel digital media campaigns optimized to achieve LTV objectives.

Contact DMS

About the Author

Carolyn Harding

Carolyn Harding is an Associate Manager of Communications at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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