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Boom! Hitwise Analysis of Subscription Box Sites

Written on
Mar 14, 2016 
Author
Adotas  |

Hitwise Analysis Shows Subscription Box Sites Have Grown By Nearly 3,000%.

Hitwise, a division of Connexity that provides marketers with the largest sample of online behavior in the US, UK and Australia, has released an in-depth study of leading subscription box sites that shows visits to them have exploded by nearly 3,000% over the past three years.

There were more than 21.4 million visits in January 2016, compared to just 722,000 in 2013.

By comparison, visits to the Hitwise Retail 500, an aggregation of the top 500 online retail sites, grew by just 168 percent during that same period.

“While the subscription shopping category is still a niche market, with total monthly visits just a third of one percent of what the top retailers receive, these sites appeal to a critically important segment of consumers, ages 25-34 who are entering the prime of their earning and spending years which should sustain continued growth in the category,” says John Fetto, senior analyst, Hitwise (pictured top left). “Traditional retailers should—and some already are—take note of the success that start-ups in this industry have enjoyed and determine if a subscription model would be a smart extension to their existing product line up.”


Top subscription box shopping sites

While there are numerous regional subscription box services around the world, many of the top sites operate in multiple countries including Birchbox, Dollar Shave Club, Loot Crate and Graze. Here are the top five sites in the US.

Subscription box shopping’s appeal

“Consumers who came of age in the digital era are accustomed to subscriptions models for online media (Netflix), music (Spotify) and news (New York Times online), but ironically for them subscribing to something in the physical world is exciting and new. So it’s no surprise that one of the fastest-growing segments of online retail is based on subscription boxes, like Birchbox, Trunk Club or Loot.com,” says Mr. Fetto. “The sheer variety of products offered through subscription box sites—which range from razor blades to medical marijuana and virtually everything in between—and ease of signing-up is clearly resonating with consumers.”

During the 2015 holiday season, 8.6 million Americans (4.3 percent of the online population), 2.2 million Brits (1.8 percent) and 192,000 Australians (1.2 percent visited one of the 127 sites in the Hitwise subscription box shopping custom industry (complete list available on request).

“Given that subscription box sites are more established in the US, it’s natural that it is is home to a far greater number of shoppers visiting subscription box sites,” says Mr. Fetto. “And while interest in the US is more than twice that of the UK and more than three times that of Australia, the Commonwealth countries are catching up with year-over-year growth rates of online visits of 197 percent in the UK and 110 percent in Australia far exceeding that registered in the US.”

Subscription box shopper demographics

Subscription box shoppers tend to have above average income and education levels, fall predominantly into the 25 to 39 year-old age bracket and skew more heavily female than the average online shopper. Furthermore, tending to live in multicultural urban neighborhoods in larger cities or the surrounding suburbs, subscription box shoppers are culturally-minded and enjoy active, health-conscious lifestyles.

Plugging into distinct shopping attitudes

“Subscription box shoppers are primarily comprised of older Millennials and younger Gen Xers who have reached a stage in their lives where they’re more established, have higher disposable incomes and have found online and mobile shopping to be increasingly easy and more convenient, enjoyable and cost effective than shopping in physical stores,” says Mr. Fetto. “Because even with their rising affluence, this audience still loves a good deal.”

Engaging Subscription Box Shoppers: Social Media is Emerging…

“Social media is a strong driver of the subscription box category as consumers learn about new sites through sponsored ads or posts shared by friends. In fact, subscription box sites are much more likely to generate visits through social media properties than retail sites in general,” says Mr. Fetto.

In the United States, 13.5 percent of referred visits to subscription box sites in December 2015 came from a social media site, whereas the typical retail site received only 8.4 percent of traffic from social. Subscription sites’ skewed reliance on social media is even more pronounced in Australia and in the United Kingdom.

Multimedia sites and blogs are also powerful drivers of traffic for subscription box sites. Dollar Beard Club, for instance, saw 4.9 percent of visits come in from YouTube alone when it launched in June 2015 thanks to an introductory video that went viral. By comparison, the typical retail site that month received just 1.6 percent of upstream visits from YouTube. Blog site Buzzfeed.com, which has no fewer than 10 posts highlighting subscription box shopping sites is another example. In November 2015, snack box subscription site Graze received a spike in traffic from Buzzfeed after being featured in a post titled “15 subscription boxes for when you’re stuck for Christmas ideas.”

…But Search Is Still the Big Driver

“Despite the disproportionate power of social media, multimedia and blogs for this category, search engines are still the most common referring source of traffic to today’s subscription box sites, though subscription sites rely less on search than other retailers,” says Mr. Fetto.

In the United States, 34 percent of referred traffic to subscription retail sites came from a search engine during the month of December 2015. That same month, retail sites as a whole received 40.7 percent of traffic from a search engine. Subscription box sites in Australia and the United Kingdom followed a similar trend.

However as more consumers become familiar with subscription sites, search grows in importance. United States where subscription shopping sites are more established, the share of visits to subscription sites driven by search engines rose a relative 20 percent in the last year.

Mobile first

With the bulk of subscription box shoppers skewing young, it’s not surprising that subscription sites receive an above average share of visits from mobile devices. In fact, sites in the United States are now mobile-dominant, with over half of their visits coming from smartphones or tablets. During the 12 weeks ending January 23, 2016, 53 percent of US visits to the subscription box industry were from a mobile device compared with 35 percent of all online visits that come from mobile. In the UK and Australia, subscription box sites are not yet mobile-dominant, but mobile share of visits is higher than the all industry average.

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