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Home Customer Experience

Achieving Customer Personalization Goals with a Subscription Box

by Chelsea Barone
October 26, 2017
in Customer Experience
Reading Time: 5 mins read
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Subscription Box
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In today’s retail world, personalization rules the day. Technologies like AI and data analytics empower retailers to really lean into personalization efforts and offer services and products that surprise and delight even the most particular of customers.

This preference for personalization has given rise to the concept of subscription boxes like Birchbox and Stitch Fix. Patrons for these companies are able to express their personal expectations and product preferences from the moment they sign up and receive tailored deliveries on a recurring basis.

What’s interesting, but not entirely surprising, is the fact that large, established, more “traditional” retailers are following suit and making a subscription box options available to customers that seek personalization but want to remain loyal to the brand that they already know and trust.

The convenience of a monthly curation tailored specifically to your preferences that is delivered directly to your home is pretty hard to ignore, so it’s no wonder these types of business models are flourishing.

This week’s retail news roundup centers on subscription box headlines and how they are involved in the evolution of retail.

 Gap is Selling Subscription Boxes for Baby Clothes

Gap is testing out a subscription option for their baby clothes, offering $100+ worth of merchandise for only $70. According to Lauren Thomas on CNBC, “Subscription boxes offer companies like Gap a treasure trove of data on consumer shopping behavior, likes and dislikes. The business model also offers companies a predictable source of revenue, granted shoppers don’t cancel their subscriptions.”

This is a great example of an established retailer utilizing new tactics to garner new business as well as retain existing customers. That data is most assuredly prove invaluable to the company as it continues to shape its strategy in coming years.

Read the whole story here.

Under Armour to Offer Customized Subscription Boxes

Similar to Stitch Fix’s model, Under Armour announced it will launch its own subscription box that includes four to six pieces of apparel selected by an “official outfitter” with a 20 percent discount on the merchandise if a customer chooses to purchase all of them. Their main differentiator is that there is no service fee for the subscription, something that normally serves as a safety net for subscription retailers in the even that customers choose not to purchase any items sent to them.

Jennifer McKevvit from Supply Chain Dive reported, “Under Armour’s free shipping and returns policy on its outfitting box clearly indicates a willingness to underwrite risk in the subscription box business.” It will be interesting to see if and how those cost cuts for the customer affect the profit margins for Under Armour.

Read the whole story here.

Birchbox’s New Subscription Solves All the Grooming Obstacles Guys Have — for Only $10 a Month

Realizing that men and women value grooming products equally, Birchbox introduced Birchbox Man in 2012, two years after the successful company’s launch. Amir Ismael offered his thoughts on the box in a recent review on Business Insider, stating, “What makes the subscription worthwhile is that it’s curated for each person individually. Completing a grooming profile during sign-up helps BirchboxMan understand your style and grooming needs so that the subscription includes products that you can actually use.”

Ismael’s review continued to highlight to common denominator here: the value of personalization. With a brief profile quiz, experts at Birchbox can narrow down specifically what types of products are most valuable to any given customer and continue to optimize that information over time.

Read the whole story here.

Stitch Fix, with Nearly $1 Billion in Sales, Files for an IPO

Clothing subscription box company Stitch Fix officially filed for its IPO earlier this month, listing $100 million as the predicted amount to be raised with the offering. Lauren Gensler at Forbes reported, “The company plans to use the proceeds from the IPO to increase its capitalization and financial flexibility, for general corporate purposes and potentially for acquisitions. It noted that it doesn’t currently have plans to purchase another company.”

It will be very interesting to watch merger and acquisition patterns among subscription retailers in the coming years, especially as data science and analytics tools continue to evolve and advance.

Read the whole story here.

To learn more about retail technology best practices and trends, subscribe to Retail Technology Insider’s newsletter here. If you’d like to share your professional insights about the industry, please reach out to us here.

Tags: BirchboxBusiness InsiderCNBCCustomer Expectationsdata scienceForbesIPOpersonalizationStitch FixStitch Fix IPOSubscription boxSupply Chain DiveThe GapUnder Armour

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