Editor’s note: Mackenzie Hollister is senior research consultant at Reach3 Insights, Chicago. This is an edited version of a post originally published under the title, “Unboxing the e-commerce subscription market: New Reach3 study reveals why people are drawn to subscription boxes.”
From pet supplies to underwear, from meat products to a “get pregnant bundle,” the subscription service industry has expanded far beyond beauty samples and meal kits. Once dominated by online-only, direct-to-consumer companies, big brands such as Nike, Disney and Macy’s are jumping on this trend by introducing their own subscription offerings. In 2018 alone, investors put in more than $1.2 billion in capital in this space.
But this market is not for the faint of heart. Blue Apron’s dwindling stock price and the bankruptcy of subscription box startups like Loot Crate show that success requires a long-term strategy to convert customers from trial to loyalty.
The rise of direct-to-consumer sales and subscription services is a key business challenge I find myself regularly discussing with clients. Given the industry’s widespread impact, our team was inspired to gather insights on the subscription service industry. This summer, we developed a conversational research approach with the goal of better understanding the motivations and barriers to signing up for subscription services, and the trends that will shape the future of this space. We engaged more than 1,000 consumers via a conversational messenger-based survey. This methodology allowed us to not only conduct robust quantitative analysis (including a max-diff), but also gather rich qualitative feedback from consumers like photos and video uploads, as well as a projective emotional elicitation exercise.
Here are three of our biggest takeaways.
When we analyzed people’s motivations for signing up for a subscription service, it became very clear that emotions,...