Hello Fresh, Birchbox, Dollar Shave Club. We’ve all heard of and are quite likely to have signed up to a subscription box service. But the market is changing, becoming increasingly saturated with sameness.
In this sharp-elbowed arena, many small brands struggle to survive, fending off competitive offensives from above and below. A study by McKinsey* found there are now over 3,500 different subscription brands fighting for a piece of the pie - an increase of 40% from the year before.
This poses two important questions. How do brands standout, and what role does design play in driving commercial success?
The food, recipe-box or meal-kit is the archetypal example of the meteoric rise of subscription box schemes - its market growth in the UK is continuing to outstrip the wider food and grocery sector. Despite this, it has the highest rates of churn within the first six months - up to 70%, compared categories such as beauty and clothing, as lack of distinctiveness results in little or no brand recognition, affinity or loyalty.
Lacking the buffer of a retail experience, branding and packaging are critical touchpoints for a DTC subscription service. First impressions always count, but in this context they matter more than ever.
Yet we find that the dominant design codes of the recipe-box category are functional, stemming from rational product truths and benefits. It begs the question; why are so many failing to build anything more than functional and category-centric meaning into their branding systems?
Firstly, subscription brands need to shift meaning, from functional to emotive through developing and executing a clear brand idea that connects with the customer. This can reposition the brand as part of the consumer’s lifestyle, adding extra value and encouraging brand loyalty. By working across an ecosystem of touchpoints in consumers lives, brand associations are activated and embedded.
The category, although still at an early-stage, also needs to be visually reinvented. Brands need to focus on creating great design systems, that extend beyond type and logo, to deliver a powerfully engaging end-to-end customer experience.
Creating a visual language that provides coherence across all customer touchpoints, will deliver standout in a choice-saturated marketplace. This can also help tackle the main commercial issue of churn, by helping build customer loyalty.
In a fast-growing market brands need to prepare for inevitable maturation. Design is a powerful tool that will help brands compete, survive and stay relevant; embedding meaning into a brand and creating standout out in a sea of brown boxes. Ultimately, this will set a new path for the category.
*Thinking inside the subscription box; new research on e-commerce consumers, McKinsey & Company, February 2018