Subscription Commerce (#SUBCOM) Matrix

There’s a big trend right now with these monthly boxes or subscription based businesses. Basically these services have members who pay a monthly fee to receive some type of box each month. This can be a wide range of things from samples to full-on products. In most cases the contents are highly targeted and curated by an authority on the vertical they serve.

Personally I love the model so I’m bullish on the opportunity here. I’m going to both build and invest into the space, so lately I’ve been doing a lot of research on it.

To start with, some people have been calling this different things. For me it’s easiest to describe the model as subscription commerce or subcom for short. I’ve also heard things like "lazy boxes", "sample boxes" and "replenishment" but subcom is probably sufficient for industry insider talk and blogging. It’s also nice and short for platforms of brevity like Twitter.

In terms of what’s out there let’s first take a look at the subcom brands already launched or in beta. Below I’ve laid that out in one of those matrix grids. To keep things simple let’s start with some basics about the businesses and organize them by rough scale and whether they target males or females (or both).

clicky to enlarge

As you can see these businesses are leaning female-focused right now. That makes sense but means there is likely a lot more opportunities for male-focused subcom. It’s also important to note that Amazon is already part of this space and while they don’t push subscription very hard they could at any time. Any of these businesses that reach large-scale are likely acquisition targets from Amazon as well.

Here’s a more extensive link directory of the various players. Click around and see if any of them excite you enough to sign up. If you have experience with some of these brands already, please let me know in the comments.

Clothes and Fashion

Health and Beauty
Baby and Parenting
Food
Art and Literature
Multi-Vertical
Update: Thanks KISSMetrics for turning this blog post into a slick infographic. View it here and below.

++ Click Image to Enlarge ++
The Rise of Subscription Commerce
Source: Box It Up – The Rise of Subscription Commerce

Marketing Metrics of SUBCOM

With monthly subscriptions, these businesses are typically measured primarily by their Monthly Recurring Revenue (MRR) and their Annual Recurring Revenue (ARR). A member's Average Order Value (AOV) Meaning is also important for growth. Finally, the Life Time Value (LTV) is also highly dependant on having a low churn rate.

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