Any organisation looking to compete in the increasingly crowded subscription box market must have the right logistics – or fulfilment – partner, says Charlie Walker, sales director of Walker Logistics
The subscription box market is booming. According to a recent Royal Mail report, the market is forecast to grow 72%, from £583 million in 2017 to £1 billion by 2022. Royal Mail says 27% of UK customers have already signed up to a subscription box service, with boxes being most popular with under 35s, while more than half of 25-35 year olds are signed up to at least one service. In addition, Royal Mail’s research discovered that 40% of consumers plan to join more schemes in the future.
Fuelled by venture-capital investments, start-ups have launched subscription box businesses in a wide range of categories, including beer and wine, child and baby items, contact lenses, cosmetics and vitamins to name just a few. And, of course, established consumer brand manufacturers and retailers have also been quick to enter the space.
The coronavirus crisis has not surprisingly generated extra demand for subscription boxes of all kinds as consumers confined to home realise the benefits of having their ‘essentials’ delivered direct to their front door on a regular basis.
The ability to retain customers is one of the keys to the sustained growth of any subscription commerce-based business with even a relatively small number of cancelled orders likely to have an unwelcome and hugely negative impact on the subscriber base, so for any organisation looking to compete in the increasingly crowded subscription box market, choosing the right logistics or fulfilment partner is vital.
A fulfilment company provides the interface between a subscription company and its customers and plays a key role in maintaining customer satisfaction by delivering the right products to the right place at the right time and presenting goods in a way that breeds customer loyalty, so a logistics company that doesn’t specialise in this bespoke offering is unlikely to contribute the levels of service required!
At Walker Logistics we have two 10,000 sq ft units (in addition to 250,000 sq ft of main operating unit space) dedicated to the kind of kitting and re-work processes that are required to ensure the success of any subscription box fulfilment model. The self-contained facilities employ a high concentration of staff (who, of course, currently observe social distancing rules) to allow fast, efficient and accurate turnaround of orders.
One of our clients is a fast-growing provider of online diet subscription boxes to health conscious customers across the UK. The products that make up each individual order are tailored to the subscriber’s precise dietary requirements and provide enough meals for a month. With more than 100 items – that all have to be packed in the chronological order in which they are to be eaten – plus leaflets and other giveaways in each box, it’s a complicated pick but our warehouse management software and data capture devices guide our operations staff through the process.
A relatively recent addition to our client base is a start-up business enjoying tremendous success by offering ‘quarantine care packages’ to those isolated at home during the Covid-19 lockdown. Everything from candy to chocolate can be parcelled together and sent out to a subscriber’s home on a weekly, fortnightly or monthly basis.
Start-ups have driven the remarkable rise of subscription boxes with the low barriers to market entry allowing entrepreneurs to establish and grow successful business with little capital or resources. But, as subscription commerce firms grow there will come a time when they need professional and dedicated order fulfilment support. Choosing the wrong fulfilment partner risks undermining any early success the company has achieved but, with the right support there are huge opportunities to make a real impact in a sector of the online retail market that is experiencing rapid growth.