E-commerce is a not a stale industry by any means and the credit for this goes to the constant influx of innovators in the online business.
One such case is of the Subscription Box’s business model, which has enjoyed ample success in the Western retail landscape in the last few years. Even though asking people to subscribe or become a member of a service is not a new concept but with Artificial Intelligence (AI) piggybacking its return, the subscription economy is rising like wildfire!
‘Subscription Boxes’ lure people with the age-old newspaper/gym membership system by reinventing it for a new internet-native generation that has grown with subscription companies like Netflix and Spotify.
Volatile Market for Experience-Hungry Shoppers
According to a recent McKinsey report, 15 per cent of online shoppers have signed up for one or more subscription to receive products on a recurring basis and frequently through monthly programme.
Talking about fashion industry’s biggest boxed-up success stories – Birchbox that took the beauty-counter concept of ‘try before you buy’ online and Stitchfix, whose shopper/stylist support system of personalising online purchases, are two such firms that deployed the Subscription Business Model, to capture a major chunk in the retail market.
This volatile retail concept is now slowly making its way into the Indian domestic market as well. A slew of young entrepreneurs are offering things like grooming and beauty products as well as fashion and accessories that earmarks the fresh fad of ‘subscription commerce’.
So, how does this model work?
You begin by opening the company’s website (or download their app), and take a ‘style quiz’ in order to get accepted to this subscription school.
The questions on this ‘test’ cover everything from your size, measurements, height, body shape to colour and fit preferences, profession and modesty choices. Some of these companies even ask you for your social media profiles and assign a personal stylist that you can bounce off style suggestions with, mirroring the job of a fashion assistant in stores.
All the data collected from style quizzes and a user’s digital footprint helps stylists (or perhaps a creative algorithm), to create a ‘style profile’, based on which they suggest and ship products to a shopper. This is where each subscription company slightly differentiates from the other. Globally, most companies boast of their data mining capabilities and big investments in AI, which only gets better over time. However, there are firms like Nordstrom-owned Trunk Club whose focus rests upon the know-how of personal shoppers, already a strongpoint for Nordstrom’s physical stores.
Who are the Top Players in India?
In India, the fashion subscription scenario is less about being data geniuses but rather brands that ‘brand’ themselves as a ‘stylist’. For example, Snobbox (SB) and StyleCracker Box (SCB) are two proper box services for women that you can order once or as many times as you like. The main difference between them is that StyleCracker curates a box of merchandise from different brands and Snobbox basically curates styles from its own branded collection.
Both SCB and SB emphasise on the customised styling feature, even sending handwritten notes of advice. SB’s website features headshots of several in-house stylists who ring you soon after an order is placed. Whereas, SCB encashes on India’s celebrity culture obsession by getting young movie stars like Alia Bhatt and celebrity stylists to curate one-off boxes.
Another subscription service is Sugarbox that does not market itself as a stylist but more of a ‘cool-hunter’, sending you a box of the latest international products in fashion, beauty and gourmet items, every month. There are no style quizzes here and you only get to choose the duration of membership.
Since all of the boxes are a ‘surprise’ and you don’t get to choose exactly what you get, they let you return items you do not want in 2 days and pay for only what you retain from the box, given that nothing looks damaged or used.
While Sugarbox also offers some men’s products, but by and large, all of India’s box services are targeted at the female shopper. Nevertheless for boys, there is OhLook, an app that functions as more of a rental subscription than ‘just’ a box. Ohlook’s business model thrives on getting men to subscribe to their regular supply of shirts rather buying one.
Currently, only functioning in Pune and Hyderabad, Ohlook sends men a pack of 5 premium brand shirts every week which are handpicked based on preloaded consumer preferences. Ohlook does mention the use of artificial technology in curating products, but the styling expertise is said to be coming from actual stylists again.
Another men’s subscription box is Krate, which is essentially a semi-casual men’s fashion and accessories label that retails through the subscription box model. It’s an online boutique with a touch of curation for millennial-friendly frills, why not!
Is it a Sustainable Business Model?
It is easy to see the allure of subscription services. The business model makes more promises than it can probably keep… From ‘convenience’ of getting everything delivered to your doorstep, ‘access’ to products that might not be easily available near you, ‘assistance’ and ‘personalisation’ for people who are overwhelmed by too many choices, ‘excitement’ for those unable to find anything new for themselves to simply catching a good ‘bargain’ for the regular shopper – offering everything that you need.
Nevertheless, even Amazon, out there appeasing the fashion shopper, is rolling out its own version of the same. Dubbed ‘Prime Wardrobe’, the facility will let any Prime Member pick 3 or more clothing items to be delivered to them at no cost and return whatever they don’t like within a week and pay only for what they keep. Though Prime Wardrobe is still an invite-only feature, it lets people grab things across all categories and price points in women, men and even the kid’s section.
While it is unclear how this will affect subscription start-ups, the new feature definitely makes things infinitely easier for people who resist online shopping simply because they cannot try on things.
Amazon Prime Wardrobe has no focus on styling but given that the company’s servers are already embedded with way more data about you than any style quiz can give, it would not be hard for the mammoth to add one more feature before Prime Wardrobe’s widespread launch.
This is where the ‘human’ element pioneered by most of our Indian start-ups can come in handy.
All-in-all, it is clear that selling subscription boxes is a great complementary service for e-commerce companies and makes the experience of online shopping far more lively. Start-ups may begin on a subscription model but surviving on just that is highly unlikely.