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May 21, 2021

Curating the best customer service for subscription box companies

The first subscription box services hit the doorsteps of consumers about a decade ago. The industry’s rapid growth during this time is truly remarkable. From April 2014 to April 2018, the industry grew by 890 percent. Today, the estimated market size is roughly $12-15 billion.

With this ever-expanding market, what do we know about  consumers who love subscription box services? The typical subscription-box visitor is in their early forties, lives in an urban environment, and makes slightly less than $80,000 per year. The market is driven by the use of subscriptions among millennials, the rising popularity of online streaming services, increasing internet penetration and low cost of subscription boxes. 

So what are subscription box services? 

Subscriptions are a recurring delivery of niche products as part of a marketing strategy and a method of product distribution. They target a wide range of customers and cater to a variety of specific needs and interests. There are 3 Types of subscriptions:

  1. Curation – A service sends collections of new items for customers to sample and use. (BeSpoke Post, Drinks, FabFitFun, Freshly, Ipsy, NatureBox, Thrive market, WINC)
  2. Replenishment – a service sends consistent replacements of the same type of products. (Pretty Litter, Ritual)
  3. Access – a service allows members to access perks and discounts on items. (TechStyle Group, Zeel)

The top subscription box types:

  1. Beauty Box (Ipsy)
  2. Personal Style Box (Trunk Club) 
  3. Meal Kit (Hello Fresh)
  4. Coffee Box (Atlas Coffee Club) 
  5. Shaving Box (Dollar Shave Club)
  6. Sock Box Sock Panda)
  7. Book Box (Book of the Month)
  8. Health Snacks (Graze)
  9. Pet Supply (Bark Box) 

The growth of subscription commerce in 2020 was astronomical and unpredictable. As we look ahead at 2021 and beyond, with such fierce competition in the subscription box market, one company’s success will come down to a number of factors: product market fit, pricing, marketing—but the biggest differentiator will be customer service. Every interaction is an opportunity to build more loyalty. Subscription brands need to know what their customers are saying on social media to find out if they’re connecting. They need to know if a customer has downgraded their service, and work to find out why. 

A 2021 study by ReCharge titled The State of Subscription Commerce also provided some interesting findings: 

  • Food & Beverage maintained the highest Average Order Value (AOV) of all verticals. Yet it was nearly flat year-over-year, while all other verticals had significant gains and losses.
  • Similarly, the Other category, made up of a variety of items (like curated boxes of hobby items) saw a negative growth, potentially due to a limit on discretionary spending in 2020 caused by financial changes for customers.
  • On the flip side, Beauty & Personal Care and Health & Wellness teetered on 20 percent growth in AOV, suggesting that shoppers were investing more heavily in their self-care than before. In a year where many people spent most of their time at home, it’s very interesting to see such strong growth in AOV for a vertical like Beauty & Personal Care.
  • Unsurprisingly, as people spent more time in their homes in 2020 than ever before, the Home Goods AOV increased substantially, at 13.8 percent. 

Suffice it to say, demand for subscription boxes is not going to slow anytime soon. Currently, Awesome OS works with a total of 29 subscription brand partners and subscription box companies are 30 percent of our overall business. Also, four of our brand partners were awarded best subscription boxes of 2020. We know what subscription box consumers want and we know how to ensure they are satisfied. 

Here are the top three challenges faced by our subscription box clients and what Awesome’s dedicated customer support teams can overcome through a high level of attention and customized service:  

  1. Personalization is Key:  Personalization of products offering is one of the key value propositions for subscription commerce businesses and the business model depends on customer insights to further personalize the experience. In collaboration with our brand partners, Awesome’s associates are trained to understand customer insights and share this valuable data with our brand partners so they can refine their offerings to meet consumers’ preferences.
  2. High Churn Rate:  Consumers are quick to cancel subscriptions that don’t deliver a superior experience – e.g. because of poor product quality, dissatisfaction with the assortment or customer service, or a lack of perceived value. Our associates are thoroughly trained in the art of empathizing with customers on their pain points and coming up with solutions for customers who are about to walk away from the business.        
  3. Fast growing business:  Many subscription commerce companies are fast-growth  and struggle to scale the customer service operations in line with the business but our teams are nimble and can scale up or down as quickly as our brand partners need us to. We have over 12 years of experience partnering with over 100 high-growth and mid-size companies as well as seasonal businesses, so the ability to be flexible is built into our DNA.

We believe that happy Awesome employees lead to happy clients. So one of the ways in which we make sure that client service teams are happy is by assigning associates by their areas of interest. This means that food lovers get to work on food subscription companies, beauty lovers on beauty subscription companies, wine lovers on wine subscriptions and so on for each industry.

Our unique approach has been built over 12 years of partnering with 100+ high-growth startups and mid-size companies in a way that aligns with your culture, values, and vision. The top four  largest brand partners at Awesome OS are subscription ecommerce companies. 7 of our brand partners were awarded best subscription boxes while two others received Newsweek’s America’s Best Customer Service in 2020. Our extensive subscription experience and knowledge has aided us in becoming a key partner within the subscription space.

But don’t take our word for it. Ask Dan Medina, Sr. Director of Operations at Freshly, one of Awesome OS’s brand partners. He said: “Making the decision to work with an outsource partner is always tough. You hope they will love and take care of your brand the same way you do. From the beginning, Awesome OS was able to clearly demonstrate that they valued us as clients, and wanted to truly partner with us in serving customers and furthering our mission.

The team at Awesome OS is as agile and responsive as we are and they are a natural extension of our Customer Experience team. Their ability to source candidates has allowed us to grow our team quickly while still retaining the level of quality our customers have come to expect from Freshly.”

 

If you enjoyed reading this blog and would like to find out more about partnering with Awesome OS, please contact us at info@awesomeos.com

 

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