Subscription services are all the rage these days, and no wonder why: "You can acquire a customer once and potentially keep him for life as long as you provide a service or product that he wants and values," said Alex Zhardanovsky, co-founder PetFlow.com, which calls the retail model "the holy grail."
More recent subscription success stories include Dollar Shave Club and HelloFlo, both of which found a niche and have rocketed to success. With affordable, quality products and a rocking brand story to match, it's no secret why the startups have found immense success in the overcrowded personal care industry.
Interestingly, HelloFlo, which was bootstrapped by former American Express marketing director Naama Bloom, partners with P&G to supply feminine products—the same CPG giant that Dollar Shave Club is challenging with its low-cost, high-quality razors. On track to make $60 million in sales in 2014, Dollar Shave Club accounts for 6 percent of the US razor cartridge market, according to AdAge, and it only has plans to expand.
After bursting onto the market in 2012 with a hilarious video featuring CEO and comic Michael Dubin, Dollar Shave Club has gone on to release after-shave products, a line of men's wipes for the bathroom, and now has plans to market its unisex razors to women.
Similarly, HelloFlo made its initial mark with equally entertaining online ads, first with "The Camp Gyno" in 2013 and "First Moon Party" this year, wtih over 35 million combined views on YouTube.
But when it comes to successful subscription services, the models vary as much as the products:
Birchbox: One of the earliest entrants in the space, the beauty startup has now expanded into men's and home products. Following several years of online success, Birchbox just opened its first permanent retail store in New York.
Trunk Club: Recently acquired by Nordstrom for a reported $350 million, Trunk Club offers online concierge clothing services for men who are style-challenged.
Hatchery: The monthly artisanal goods subscription service just launched an online marketplace, Hatchery Marketplace, with 350 products from more than 100 small foodmakers from across the US, including family farms and green markets.
ClubW: The digital sommelier matches a consumer’s palate to wines, then delivers them to your doorstep for $13 a bottle.
Nootrobox: The subscription service packages up brain nutrients and “smart drugs,” aka nootropics, as well as their proprietary supplement, RISE, to help improve “memory, focus and energy,” in shipments ranging from $9 a month to $53 a month. The model banks on selling multiple compounds in one pill, as the nutritional supplements industry is projected to reach $60 billion by 2021.
BarkBox: A product of e-commerce company Bark & Co., the monthly subscription service has 200,000 customers and boasts a 90 percent customer retention rate from month to month— satisfying both its human and canine users. Barkbox targets dog-owners with The BarkPost and just raised $15 million in funding to grow its dog-treat service and vet care-on-demand service BarkCare. The company also rolled out a new app for dog adoption, BarkBuddy.
NatureBox: The snack food e-tailer sold 50,000 boxes of snacks in 2012 and 1 million boxes in 2013 and just closed an $18 million funding round. “I’m floored by NatureBox’s ability to rapidly produce and deliver new snacks light speeds faster than traditional [consumer packaged goods companies] while continuing to grow its consumer base,” said newly appointed chief supply chain officer, Michael Thompson.
Julep Maven: Formed out of fast-growing beauty brand Julep Beauty, the Maven program offers first access to the latest nail color trends and beauty innovations in customized monthly boxes, with free shipping and additional discounts.
Rent the Runway Unlimited: The cult favorite fashion site just launched Unlimited, a new subscription service for accessories. For $75 a month, the company mails three upscale accessories including leather jackets, handbags and jewelry from designers including Vera Wang, Missoni, Oscar de la Renta and Balenciaga for a period of time.