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Don’t Rely On The Samples, Lab Rats

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We used to feel it once (or twice!) a year – the excitement of getting wrapped gifts and not knowing what’s inside for you. Now it can happen monthly. We are big fans!

The chemical reaction our bodies have when we’re excited and waiting for that box each month—not knowing what it is, but knowing it’s coming—creates an adrenaline rush. And it’s addicting. It has fueled the boom of subscription boxes in India, ranging from getting charms for your tennis bracelet to super healthy snacks monthly right to your door step. When something’s being handpicked for someone, it’s feeding their self-esteem. It makes them feel unique and keeps them continuing to purchase. There is one for everyone, including your pets.

Really though, who is ‘curating’?

There is a clear reason behind why several subscription boxes make money from the get-go. It actually makes a lot of sense. Subscription brands asked vendors/manufacturers for free product (usually sample size) in exchange for exposure to a niche target audience, free marketing, data, product feedback, etc. Consumers then pay a small monthly fee (usually INR 600-1899) to discover new products and essentially ‘try before they buy’. Often part of the value for consumers is that an ‘expert’ would be ‘curating’ the unique assortment of products they receive. With scalability, personalized curations becomes impossible. The problem is, as this business model became more and more popular, consumer product brands starting getting inundated with e-mail sales pitches requesting free samples. Some brands I’ve talked to have reported getting a free product request from a new subscription box every day!

The painful crux of scalability

Vendors work with subscription boxes because it gives them greater publicity. The basis of many of the surprise boxes on the market now is providing customers with samples of products from up-and-coming vendors. For example, a beauty box is usually filled with a bunch of samples of makeup from various designers. As a result, the vendors love working with subscription boxes, because it creates brand awareness and serves as a marketing platform. Vendors want their products in your box, resulting in healthier margins at negligible costs.

But there is still a struggle. The short story is, product procurement gets really hard. Even if you have the resources to be constantly growing your sales team, you’ll quickly find yourself struggling to maintain product quality – especially as you grow beyond 3,000 subscribers. Many consumer product brands (even if they wholeheartedly buy your sales pitch) simply can’t afford to send you more than 2,000 or 3,000 units of free product. Let’s say you grow to 25,000 monthly subscribers – you may find yourself with a minimum of 15-20 different box variations going out to your customers each month.

Every additional ‘box variation’ you have to send out each month adds quite a bit of logistical headache, because of this, most subscription boxes tried to minimize the amount of variations by only working with consumer product brands that can provide larger amounts of free product (10,000-25,000 units). This leads to many sourcing from beauty liquidators or getting expired/rejected products for the low costs to maintain box variation and product assortment. THAT is a problem. Are we meant to be lab rats? Most beauty subscription companies are able to keep costs low partly because they are able to get their products for free or at very low cost. Vineeta Singh of Fab Bag highlighted this in few of her panel discussions.

The lack of transparency is a problem worldwide

Unfortunately, misleading marketing works. And that’s what several companies, in some part, grow to be so successful. But the core product that many of these boxes sell is exactly that – the box and the subscription – rather than selling the product first and the membership second. The original-mother subscription box company Birchbox has also faced troubles this matter. Birchbox charges women $10 per month for a box of samples that it receives at no or low cost from brands (though they’re now paying for more samples than they did in the past).

Bringing ethics to subscription boxes

Reverie Box has brought credibility and ethics to the booming market. Reverie Box pitches itself as a premium alternative priced at INR 1499-1799, but it is one that offers value because it includes several full-size products carefully selected, rather than just samples.

We compare monthly subscription box fees to gym membership dues: If customers are paying as little as INR600 a month, they will perceive it as a good deal—even if there’s not a clear benefit. The rub is that after a couple of rounds of getting items you don’t like, you may lose interest – that is an issue Reverie hopes to resolve.

Reverie goes to the gym for you (taking the above metaphor forward). The Reverie Box makes sure that all the members of the team test all the cruelty free, paraben and sulphates free & ethical products (they hope to include in the boxes) for 20-30 days individually. This gives them an opportunity to test if a product has overall benefits for all or might cause an allergic reaction for some – allowing them to justifying-ly reject the products doing the latter. Since all the goodies they include are full size and can be easily used for a month, they make sure to test the product for the same duration, if not longer.

While selling ethical products in their boxes, they also bring the practice to their business relations. Reverie Box pays all their partner brands fair wholesale prices for only the freshest products, keeping a tight grasp on the logistics. Though their expansion might be slower than their competitors, the cofounders, Nitika Sonkhiya and Sameesh, refuse to compromise on the ethics stance. She says, “we only include products that are effective to ensure that our subscriber’s stick to natural products long term, rather than going back to chemical laden products. We are proud to be helping the organic farmers of India, while ensuring our customers get the best value.”

We are thorough fans of subscription models, but we hope to avoid Indian subscription boxes facing the same issues as Just Fab, Fabletics and several others did in America (Buzzfeed breaks it down for you). With so many options to choose from, it’s no wonder customers are flocking to purchase their own subscriptions. But that’s just half the story. What entices them to stay loyal month after month? It’s often laziness mixed with how tough it can be to actually cancel the subscription or the perspective of a brighter future.

Put it this way, we are already itching to open our next surprise bags & boxes.

 

—with love by the B* & ReverieBox

Photo via Aarushi

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