Managing The Complexities Of Subscription Box Retailing (RCD Ep12)

L-R clockwise. Leon Bailey-Green (Editor, Upper Clash), Laetitia Arfi (Global Sales & Marketing Director, APG Ecommerce Solutions), Sophie Baron (Founder, Mamamade), David Toon (Head, uOpen), Mike Donovan (Founder, Brushbox), Lucy Isherwood (Head of Operations, Birchbox), Stelios Pardalakis (Founder, Stellar Search), Claire Muir (Commercial Director, Seko Logistics).

RETAIL COMMERCE DISCUSSION, Episode 12

Managing The Complexities Of
Subscription Box Retailing

Scroll down or click here to watch videos. Find us on LinkedIn and YouTube.

SYNOPSIS

This time founders and leaders from Birchbox, Brushbox, Mamamade and uOpen joined us to opine over marketing, logistics and growth strategies for subscription businesses. (Videos below)

When asked about brand expansion Brushbox founder Mike Donovan is keen for the brand to stay in the oral care category. Whilst personal care subscription brands tend to branch out into other health products, Mike thinks there’s plenty of opportunity in remaining an oral care specialist “The global oral health care market is worth $40bn” he says.

Birchbox is well known for subscription but Lucy Isherwood, the brand’s Head of Operations, says one of the objectives for the company is to better align its subscription operations with its one-time purchase e-commerce business.

“We want to be onboarding them [customers] when their children are just starting solids, around 6 months, and accompanying them into toddlerhood” said Sophie Baron, founder of baby meals by subscription brand Mamamade, when asked how long they want to retain acquired customers.

David Toon, head of uOpen, describes the company as the Amazon of subscription boxes, with multiple sellers from one man bands to large operators such as Loot Crate and Birchbox available on the platform.

David, Sophie, Mike and Lucy were joined by Laetitia Arfi, Claire Muir and Stelios Pardalakis for this discussion hosted by Upper Clash editor Leon Bailey-Green.

With experience working with subscription businesses at Seko Logistics Claire, explained the fulfilment dilemma many of these types of e-commerce retailers face – whether to distribute boxes to all customers at the same time, or on the monthiversary of their first order.

Laetitia, from APG Ecommerce Solutions, talked about customs considerations when fulfilling subscription boxes to international customers.

Stelios from Stellar Search spoke of the growth in consumers searching for subscription offerings.

VIDEOS

Scroll down for the long edit.

Offering one-time purchase – 2 minutes 6 seconds

Mike says getting one-time purchase customers to become subscribers would be more of a priority than getting subscribers to buy additional products. Subscription works for Mamamade because customers have a constant need – it saves them having to log in again and re-order says Sophie. Lucy says Birchbox wants customers to see the subscription and e-commerce sides of the business as one.

Retention of customers and lifetime value – 2 minutes 46 seconds

Not being able to keep customers can kill a subscription business model says Mike, who thinks more attention is needed on retention rather than acquisition. Sophie spells out the expected customer lifetime for her brand. Stelios offers thoughts on ad copy for subscription brands.

Expanding the brand into new areas – 2 minutes 11 seconds

Mike sees expansion opportunities for Brushbox in the oral care space, and intends to resist temptation into other personal care categories. David says high street and DTC brands are looking at offering a subscription product to drive new customers to experience their brands. Sophie envisages a time when her baby food brand can be relevant in physical locations such as nurseries and soft play areas.

Efficient warehouse and fulfilment strategies – 1 minute 52 seconds

Do you ship all customer subscription boxes at the same time, or on the ‘monthiversary’ of when each customer first subscribed? Claire shares her expertise. Lucy talks about Birchbox shipping one-time purchases in a single delivery along with subscription boxes. Laetitia discusses timing deliveries when shipping subscription boxes to international customers.

Customising boxes – 1 minute 21 seconds

Lucy offers a behind-the-scenes timeline of creating a Birchbox package. Sophie wants parents to trust the assortment of meals provided in the Mamamade box.

International strategy – 2 minutes 14 seconds

Claire warns subscription brands against having stock across multiple global warehouses. Laetitia says cross border delivery can sometimes be quicker than in country fulfilment. Lucy talks about differences in delivery provision experienced by US and UK Birchbox teams.

Marketplace model – 1 minute 20 seconds

David explains the subscription box marketplace model with uOpen allowing customers to subscribe and cancel boxes from multiple small, medium and large subscription businesses. Claire offers thoughts on collective logistics.

The Long Edit – 28 minutes 43 seconds