In the past few years, the subscription box industry has exploded in popularity. Forbes magazine reported that in the month of April 2017, subscription company websites had around 37 million visitors, and that number has grown 800 percent since 2014. Whether it’s grocery items, lifestyle, apparel, or pet toys, chances are you can find a box that fits your flair.
While online shopping—particularly subscription services—continues to grow, even the biggest brands see value in taking business offline to enhance the customer experience, offer more flexibility, and engage with its customers face-to-face.
Here are a few online-only brands that have traveled off the web to attract new customers and retain its existing base by incorporating physical retail into long-term plans.
One online company that has fully embraced the brick-and-mortar concept is Birchbox. If you are unfamiliar with the subscription service, Birchbox sends curated samples of beauty products to its customers to introduce them to new brands.
The idea is simple. Subscribers take time to fill out a personalized beauty profile that provides data to the company about their preferences. Then, the customer is sent samples of beauty products that fit their style. After four years of business, Birchbox recognized the need to add physical retail stores to its plan.
In 2014, the brand opened its first brick-and-mortar in Soho, New York City. The retail shop “brings the Birchbox experience to life,” according to company reps. Consumers can quickly get their hands on product offerings, shop by category, and test out trends at a Try Bar—a special in-store area that houses the hottest products on the market.
Customers are also able to build their own Birchbox and earn points toward future purchases, both online and at the store. And finally, there are options to book hair, makeup, and beauty services that feature all of the products you might find in your box.
Birchbox found the setup so successful that they plan to open more physical stores in the future. In fact, the company confirmed its plans to open a second retail location in Paris last year.
Although Birchbox co-founders admitted that they never expected to manage a retail store, they also said that the experience has been extremely valuable. The company reported that shoppers at the retail location have a 3X higher lifetime value with the brand. And by collecting data from their customers at the store, they are able to tailor the brand to meet customers’ needs.
That’s right! Even pets can enjoy their own monthly subscription box. BarkBox is a monthly box of dog toys, treats, and goodies sent to dog owners who want to pamper their pup. The collection is themed every month with past boxes including Knights of the Hound Table, Chewrassic Bark, and The Good—The Bad—And the Pugly.
Recently, BarkBox made the announcement that the company’s treats and toys would be available at Target shopping centers. This is the first time that BarkBox items have been offered in a retail setting. This partnership makes it much easier for consumers to interact with the brand while offering more opportunities to get their subscription service in front of new clientele.
Target is continuing its efforts to partner with subscription brands. Senior Vice President of Essentials and Beauty at Target, Christina Hennington, said that offering “new and exclusive pet brands” would help set them apart as the “ultimate pet destination.”
Rent The Runway
Lovers of fashion have been flocking to Rent The Runway to enjoy what the New York Times has called “a Netflix Model for Haute Couture.” A service that provides accessory and designer clothing rentals, Rent The Runway promises customers a “dream closet on demand.”
Clients can choose from an array of designer options—giving them a chance to dress in the newest fashions without paying high retail prices. Even with the company’s online success, co-founder Jennifer Fleiss said that it was clear customers wanted a physical retail store.
Although it wasn’t in the brand’s initial plans, they decided to test out the concept in 2012 at the company’s corporate headquarters. Rent The Runway has since opened retail shops in New York City, Las Vegas, Chicago, and Washington D.C.
Customers claimed they wanted an in-store experience with the ability to browse, try on items, and get advice from one of the company’s professional stylists. Rent The Runway responded by delivering a convenient experience where consumers can access the brand in-person, online, and even via app. This type of adaptation is key to pleasing a customer base.
Today’s retail landscape calls for flexibility—even with monthly subscription services. HelloFresh, a company that sends recipes with quality ingredients to its subscribers, saw the need for the brand to become more accessible and less restrained by scheduled delivery dates.
In response to customer feedback, HelloFresh opened its first physical retail pop-up shop on the busy streets of London in March 2017. This four-week experiment aimed to please its subscribers who said they would prefer the option of picking up a kit on the way home from work. While the pop-up shop didn’t offer the brand’s full menu, it did give commuters a chance to purchase from a select list of popular recipe kits.
The pop-up shop was a way for HelloFresh to test how they would operate in a physical retail space, while evaluating customer interest for the long-term.
Have you ever purchased a subscription service? What other online-only brands would you like to see in physical retail locations? Let us know!
CRUNKLETON COMMERCIAL REAL ESTATE GROUP