If there’s one thing that’s consistent in ecommerce, it’s that consumer habits are always shifting. Whether it’s in response to global events such as the COVID-19 pandemic or technological advances like augmented reality, this evolving retail landscape means new opportunities for merchants to grow and diversify.
Enter: Curated subscriptions.
While the subscription model itself isn’t a new offering, the curation category is experiencing a noticeable uptick in interest. According to McKinsey, curated subscriptions make up 55% of all subscriptions, indicating a clear desire for tailored retail experiences.
What are curated subscriptions, and why are they proving so popular with online consumers? That’s exactly what we’re going to unpack in this post.
Curated subscriptions are a specific genre of subscription service that select a group of products for a customer within or across product categories. This is done either by utilizing previous sales data or having consumers complete a quiz or questionnaire that outlines their preferences.
In this subscription model, consumers are effectively paying for a brand to personalize their offering and conduct the process of product discovery on their behalf.
We have seen curation popping up across multiple product categories, from beauty and wellness to confectionary and books. With many online merchants now selling the same or similar iterations of the same product, curation services are a powerful brand differentiator in the eyes of consumers that help to add value to a purchase.
Today, consumers have virtually limitless choice over where to buy goods. But with so much choice, this only makes product discovery more difficult. With an estimated 12 - 24 million ecommerce sites globally, it’s hard to know where to start.
Moreover, stores like Amazon and Walmart carry such breadth and depth in their product catalogs that it’s easy for consumers to get overwhelmed - and consequently buy nothing at all.
Curated subscriptions remove both stress and friction by selecting a small group of products that fit a customer’s needs, removing hours of searching from the online shopping process. This also enables more convenient product discovery by exposing consumers to brands that they haven’t encountered before.
Personalized online experiences are increasingly sought by consumers, but many brands still struggle with how to execute this effectively. If you’re had the experience of an online ad chasing you for weeks or even months after you purchased that item, you’ve been a victim of personalization gone wrong.
Curated subscriptions, however, offer customers genuine value. They recommend products or brands on the basis of information given to them directly by customers, which creates a sense of uniqueness and exclusivity for the recipient. This helps to promote trust between customers and curators, which enhances the customer experience as a whole.
The demand for curated ecommerce has as much to do with the experience as the products themselves.
After all, it’s entirely possible for consumers to follow the recommendations of a curated subscription service and buy the products independently (and possibly save money in the process).
So, why do people still decide to buy curated subscriptions?
The reason is two-fold; the first is convenience. The second is the desire for more immersive brand interactions.
Ecommerce customer journeys lack the tactile experiences that we are used to finding within in-store settings. When we order products online, the end-to-end process (including delivery) is often generic and hard to tie back to the brand story.
By contrast, product curation enhances the delivery experience in order to create a higher perception of value. An unboxing experience that includes specially branded packaging, free samples, and even handwritten notes makes for a tactile and immersive brand encounter that consumers find especially enjoyable.
Curated subscriptions have some notable benefits for ecommerce merchants - especially in a climate of intense online competition. The ability to bundle products into an entirely new offering enhances your value proposition, creating. a much stronger niche for your business. This makes you more easily marketable to new consumer segments.
With the COVID-19 pandemic causing consumers to pivot towards products and away from experienced-based offerings, there’s no better time to consider adding a subscription offering to your business.
But how do you know whether a curated subscription is going to work for you?
This depends on a few key factors:
For a successful curated subscription, your brand needs to strike the balance between being too narrow or too broad in its focus. A small niche will make it difficult to come up with new box ideas without getting boring or repetitive. The lack of a clear theme, however, will cause your subscription to struggle in finding a target audience.
Unlike other subscription models, curated subscriptions rest heavily on data about your customers. You need to know their likes and dislikes in order to create a subscription box that surprises and delights your customer at every turn.
Conversely, this gets more challenging over time; the longer someone has received a box, the more they expect you to know about their preferences.
This is where curated subscriptions are more high maintenance than their replenishment counterparts. To avoid customer churn, you need to keep gathering fresh insights on your customers.
You can do this by sending your customers a feedback email about their latest box, or by monitoring social media and email analytics to gauge their response to your offerings. You could also launch a more in-depth seasonal survey that focuses on upcoming trends. To ensure a high uptake, consider incentivizing your subscribers with free examples, or exclusive discounts off their next box.
Subscription box fulfillment is a specialized process that requires additional steps including kitting, subassembly, and custom packing inserts. While you might be capable of fulfilling a small number of boxes independently, this becomes impossible if you progress to receiving hundreds of orders per month.
You also need to consider how you’re going to source the necessary materials, including boxes and customized packaging. Many packaging suppliers have MOQs (minimum order quantities) that can require a significant upfront investment.
For the reasons above, it’s a good idea to consider partnering with a 3PL that has experience with subscription box fulfillment to coordinate this on your behalf.
Given the long-term consumer trends that are pushing the growth of curated subscriptions, we’re likely to see curation evolve outside of the subscription model.
So, what does this mean for merchants? It’s time to start considering how you can bring curation into your value proposition.
Even if a curated subscription isn’t right for your business, this doesn’t mean there aren’t other ways to take advantage of this trend. The growth of sites like curated.com, where the customer is matched with ‘experts’ who can help them find the right outdoor gear for their needs, is a clear sign that consumers are eager for recommendations from trusted sources.
The essence of curation is that people want to get their purchase right the first time around, rather than waste a lot of time and money on the wrong product. As consumers gravitate more towards personalized offerings, brands are likely to respond with further offerings that help to cut out the noise.