Over half of shoppers use subscription box services

Dive Brief:

Fifty-four percent of online shoppers say they use a subscription service, according to a survey conducted by ratings and reviews platform Clutch.
Dollar Shave Club is the leading platform of subscription box members (29%), followed by Ipsy (21%), Blue Apron (17%) and BarkBox (17%), the survey finds. HelloFresh, subscribed to by 16% of respondents, was next, followed by Birchbox (14%) and Sephora Play (14%).
In its release, Clutch noted that the rise of subscription services can be attributed to the growth of e-commerce, increased social media use and consumers feeling more comfortable paying for value over time.

Dive Insight:

Dollar Shave Club primarily replenishes products, but the other subscription service brands regularly provide curated collections of new items. According to data from consulting firm McKinsey & Company cited in the survey, the top brands are within two of the three major subscription box categories, which are curated services, replenishment services and access services.

As subscription services continue to gain favor with consumers, many retailers have cashed in on the trend, and apparel is a particularly popular space.

Amazon last year rolled out its Wardrobe service to all Prime members and Target unveiled a box for its Cat & Jack children's private label brand. Last October, Express debuted its apparel subscription service, pricing its services less than competitors like Ann Taylor and Rent the Runway. More recently, Nike launched its children's shoe subscription service in August, and Walmart introduced its own children's apparel subscription service featuring more than 120 brands in April.

Subscription services have also cropped up in beauty, personal care and other areas. Last December, Quip, the oral care subscription service, raised $40 million in funding from Sherpa Capital and TriplePoint Capital, and BarkBox rolled out its pet subscription service on Amazon in May.

It's not always smooth sailing, though. Rent the Runway, which operates various subscription-based services, has attempted to fan the flames of angry customers this month, informing them that efforts to upgrade its fulfillment systems caused the order delays.

The longevity of the model's success remains to be seen. A previous McKinsey and Company study found that 40% of subscribers ultimately cancel their services. Though the demographic most likely to have a subscription service are millennials, a group with an estimated $200 billion in spending power, which could indicate the value in investing in the model.