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The Definitive Guide to the Future of Subscription Boxes

Updated: Aug 21, 2020

By Paul Jarrett, CEO & Co-Founder of Bulu. Contributors Nicole Bauer & Paige Piper of Bulu.

As the CEO and co-founder of Bulu Box, the 6th Subscription Box and also the first non-beauty box to hit the market back in 2012, I’ve had a front-row seat to the transformation of the Subscription Box industry. And I’m here to tell you that Subscription Boxes will experience a major evolution in the next five years.

Since launching Bulu Box, we have evolved into a private-label Subscription Box company that works with big brands like Disney and Scott’s MiracleGro to leverage our expertise and fulfillment strategies to bring new revenue streams to life for our partners. We’ve built many successful Subscription Box programs. We’ve also watched many fail...including our own flagship program, Bulu Box. More importantly, our experience helps us see what’s around the corner for Subscription Boxes.

Before I can tell you where the future of Subscription Boxes is going, we should probably start by defining what constitutes a Subscription Box. Since there is no universally accepted definition of a Subscription Box, allow me to offer you ours which is based off doing this for 8 years: Subscription Boxes describe the product category made up of multiple, varied items shipped together on a recurring basis (you’re welcome, Miriam Webster.) Subscription Boxes can further be divided into three primary categories that unlock unique customer experiences: curation, exclusive access, and replenishment.

Subscription Boxes describe the product category made up of multiple, varied items shipped together on a recurring basis.

Not all Subscription Boxes are created equal. For example, each Subscription Box company measures and reports key metrics--such as customer acquisition cost (CAC) and lifetime value (LTV) --differently, which makes it difficult to compare apples to apples across the industry. In fact, disparity in terminology makes it even dangerous to discuss topics like growth and sustainability. Afterall, is it fair to accept “subscriber counts” that are actually a reflection of a company’s email list rather than the number of paying customers?

Subscription Boxes will endure, but they must evolve to do so.

The current state of the Subscription Box industry is widely debated. A slowing of growth leads some to think that Subscription Boxes are on their way out, while others argue that they're here to stay.

I prefer to think of the current state of the Subscription Box industry in terms of its Product Life Cycle. Back in 2014, when Steven Sinofsky introduced "The Four Stages of Disruption,” he provided a framework for describing disruptive industry changes which happen in four key phases. First, an innovative idea is born. Then it rapidly grows for a short period of time that is followed by maturation. Finally, the innovation peaks and begins to decline. Sometimes during this declining phase, another innovation is conceived that is different enough to start the whole process over again on a new curve.

Right now, the Subscription Box industry is in the transition from maturity into decline, and we’ll soon see many of the Subscription Boxes fizzle out completely or radically change their strategies to embrace other pockets of innovation.

(My hunch? Key features of the Subscription Box product, such as Specialty Fulfillment and super kitting, may break out into their own markets. But I'm getting ahead of myself.)

The Birth of Subscription Boxes

A decade ago, the Dot.Com bubble gave rise to eCommerce, and suddenly established retailers were competing with scrappy eRetailers and struggling to keep pace. Sooner or later, brick and mortar shops realized they also had to launch online storefronts or lose their customers.

And many large brick and mortar retailers did lose their