Secrets of the booming £1bn subscription box market

Secrets of the booming £1bn subscription box market

The subscription box market is booming, according to a report by the Royal Mail, which estimates that one in four (27pc) of us are signed up to receive a regular hit of food, flowers, booze or something else. The sector is growing at such a rate that it will be worth an estimated £1bn in 2022.

Low barriers to entry mean that many small companies – and some established ones – are getting in on the act. Oliver Bridge, the founder of Cornerstone, a shaving product delivery brand, can see the appeal. “Your revenue is more predictable, so you can spend more time on improving the product and service instead of constantly recruiting new customers,” he says. “There are fewer sleepless nights.”

But gaining the first of those clients is the big challenge, says Asher Budwig, owner of Lola’s Cupcakes. “People want to try before they commit, so you end up giving a huge amount of product away for free,” he explains. “It makes for an expensive and unprofitable start.”

Another difficulty is keeping customers once they’re on board. “You need to maintain a low cancellation rate, because if your ‘churn’ is too high, you can’t replace departing clients quickly enough and you end up running to stand still,” says Bridge.

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