Meal kits and other direct-to-consumer product boxes were an emerging category about ten years ago and quickly became popular among consumers. Then this sector became very crowded, and with some notable exceptions, sales fell off the table. Now we are seeing a resurgence as stay-at-home consumers value the convenience and fast delivery.
So big players including HelloFresh, Blue Apron, Birch Box, and Dollar Shave Club are seeing brisk business. Even Fido has his own monthly subscription from BarkBox. Payments providers have adapted quite well to the recurring payments transaction process, and the box suppliers love the annuity revenue. As COVID-19 spread subsides, expect to see overall subscription box sales decline, as consumers will return to more frequent in-person shopping. Subscription box suppliers will have gained new customers, but will still need to fight for market share. Consumers will win with more suppliers who most likely will offer price discounts and special promotions.
The following Fortune article reports more on the topic:
Subscription boxes are piling up at doorsteps as consumers increasingly shop from home and avoid brick-and-mortar stores since the outbreak of COVID-19 earlier this year.
Over the past four months, many U.S. consumers turned toward the direct-to-consumer subscription box market for the first time, with one in five people buying subscription boxes during this time frame to have products available to them during the pandemic, according to a new study from CouponFollow, an online hub for collecting coupon codes and promotions among major retailers.
CouponFollow surveyed more than 1,000 U.S. consumers, and more than half (51%) said they bought subscription boxes to try new products, while another 39% said they simply enjoy receiving products in the mail. Approximately 37% of respondents found subscription boxes “easier than shopping.” “For many American consumers taken by surprise by the pandemic, the subscription box industry brought a sense of comfort and convenience that was highly sought-after immediately following massive shutdowns across the country,” says Marc Mezzacca, founder and CEO at CouponFollow. “It’s the first time in a long time Americans felt massive supply-chain issues in many sectors, especially around essentials. There was a heightened sense of fear around access to products, and consumers looked to other ways to get the goods they desired.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
