Subscription Boxes How to Make Ecommerce

Subscription

How to make ecommerce boxes a steady revenue stream

In partnership with FIPP Insight Report Contents

01 Time to start thinking about 01 subscription boxes / p03 Written by: Jessica Patterson Editor: Sylkia J. Cartagena

02 Types of boxes / p10 Design: Ian Crawford

05 Logistics / p19 FIPP is a not-for-profit trade body with the sole purpose of helping the media industry to develop better strategies and build better businesses. Marketing / p24 06 Support our work with an individual contribution of any size so we can keep communicating trends, sharing knowledge, and improving skills, worldwide. 07 Case studies / p26 Click here for more.

02 FIPP Insight Report

01 Time to start thinking about subscription boxes

OR magazine publishers, multi- platform and brand-focused Fmedia houses, there has been a push towards reader revenue these past few years. New investments in live events, exponential expansion into brand licensing, and exploration of other marketplaces including ecommerce, have provided diverse new streams of revenue.

This move to monetisation of consumer revenue is one of the largest shifts in the past decade, wrote FIPP CEO James Hewes in the Innovation in Media 2019- 2020 World Report. It won’t stop there.

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In this report, FIPP aims to provide Media companies should start thinking subscription box companies around you with a guide on how to start your about subscription boxes, because the world, though nearly 70% were membership boxes strategy and convert they’re highly successful if done right. based in the US, the report said. The it into a revenue source. It answers some In our research, we’ve found that if you most popular categories, as measured of your most pressing questions about have the correct approach, it’s more by site visits, were grooming, followed subscription boxes and how to launch than likely subscription boxes are a by food and clothing. By 2023, 75% yourselves into this million-dollar- good fit for you. Subscription boxes are of organisations selling direct-to- market, helping you find solutions and about providing your subscribers with an consumer will offer subscription opportunities for your business. experience they’re not getting elsewhere. services, the SUBTA report states. It’s about taking advantage of habit, for a We hope you find it useful. subscription box to become a habit, too. As a magazine media publisher, you’re an authority in your niche, and on a daily Publishers are moving to grow their According to the 2019 State of the basis curate content that best suits your subscription revenue as digital ad Subscription Commerce Economy audience’s needs, wants and tastes. It revenue fails to live up to its promise, Annual Report, the global subscription makes sense to extend that authority to as print revenues continue to shrink, commerce economy is growing. “From subscription boxes. and as scale and clicks don’t cut replenishment, to discovery and delight, it anymore. Subscriptions have subscription boxes are a medium for Who wouldn’t want to introduce a more proven to be a solid revenue base consumers to be introduced to and predictable, recurring revenue stream? for sustainability and growth. They engaged with a recurring delivery of Subscriptions provide those revenue may not be as fast-paced as other niche products as part of a marketing flows, and they are something magazines revenue streams, but they’re steady. We strategy and a method of product have been doing for decades. Building off know this, you say. We’ve been doing distribution,” the report states. those strengths, we look at what steps subscriptions for years. So what? magazine media can take to start their As of 2018, there were close to 7,000 own subscription boxes.

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Subscription boxes in the READERSHIP GROWTH DRIVING DRAMATIC needed more now than ever. Hearst times of pandemic SUBSCRIPTION WAVE (%) Autos said it saw a large uptick in sales in March/April 2020, and over that period When we began writing this report in of time, launched a limited-time bonus 300 Source: Pocketmags.com YOY increase in UK January, Covid-19 was a whisper in 268 offer aimed at those sheltering in place 259 page views, 23 March to 26 April 2020 international news. Two months later, 250 or staying at home. when we finished it, the world was in lockdown. How quickly things changed 200 177 Readership growth is driving a dramatic for all of us. 154 150 subscription wave, said Martha 150 Stone, CEO of the World Newsmedia 104 In the time since then, executives from 97 97 Network during the ‘Data-drive pricing 100 80 strategies that grow subscription 50 revenue,’ FIPP webinar in May. According to Pocketmags, there was a surge % in readership growth during the UK’s Sports Music Men’s Covid-19 lockdown, which drove a wave Women’s Food & drink Tech & gamingFamily & home of subscriptions. For example, in tech and Hobbies & crafts Health & ﬁtness gaming, and family and home titles, UK page views increased 268% year over magazine media companies who already year, and 259% year over year, for the had subscription box programmes in period of March 23 to April 26, 2020. place, expressed that there was a surge as a result of worldwide lockdowns. Despite the challenges of the coronavirus Subscription boxes that deliver product pandemic, subscription box retailers Martha Stone, CEO, World Newsmedia Network discovery and tangible experience are have enjoyed a surge in search traffic

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“We created a new wing of our company – with not only new employees, but new employee categories. New departments. New physical space. This is not for the faint of heart, or the halfway

effort. This changed everything...” David Webb, Editor-in-Chief, Explore magazine in Canada

and subscriptions. According to a recent As people practised social distancing Your next healthy subscription report by Zuora, subscription around the world, meal kit subscription revenue stream box companies were resilient during boxes saw a flood of sudden demand. According to the Royal Mail, the UK the pandemic with more than half Blue Apron, for example, sends meal subscription box market is estimated reporting they hadn’t seen a decline, and kits to more than 350,000 subscribers. to be worth £1bn by 2022. In a report 22.5% of companies actually saw their “Within the span of 48 hours, we saw for Royal Mail, GlobalData Consulting subscription growth rate accelerate. an increase in orders that surpassed forecast that by 2022, the UK the staff we had in place to fulfil this subscription box market will have almost “The winners will be those that higher-than-expected demand, and this doubled in size to £1bn, up 72% from successfully retain the new customers caused some challenges in our fulfilment 2017. The report estimates that the top 25 they’ve gained this year,” Guy Marion, process,” Blue Apron CEO Linda Findley companies account for £500m in sales, CEO of automated customer retention Kozlowski wrote on Facebook. while there are about 400 to 600 small software Brightback, told eMarketer and micro-sized companies who account in March. ”There’s a lot to learn from for a combined turnover of £80m and an influx of new customers, and the £200m in 2017. “The business model also companies that commit to finding these presents significant opportunities for answers and making changes will survive international expansion, with our survey that future transition.” revealing that nearly 90% of subscription

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businesses make at least some “It’s an exciting time to be working Existing and successful subscription box of their sales overseas,” the in media because now more than businesses have developed various ways Royal Mail report stated. ever it’s critical that publishers to reduce churn, these being 1) using a think creatively and strategically magazine, and 2) selling products in- Barriers to entry into this about their specific audiences store. Online communities and unboxing industry are low, though there and how to best serve them,” videos keep subscribers engaged are challenges of delivery and explained Michelle Panzer, Chief between deliveries. fulfilment. Those that do well Marketing Officer at Hearst offer a flexible service that allows Autos. “With a strong brand and For subscribers, subscription boxes consumers to cancel or change their a passionate audience, anything’s provide tangible benefits. The experience preferences and offer some value that possible!” of opening boxes is like Christmas. It’s Michelle Panzer consumers can’t get in conventional Chief Marketing Officer, about discovery, it’s about anticipation, retail environments, according to the Hearst Autos it’s about getting great stuff at a Royal Mail report. Challenges and benefits fraction of what it would cost them in store. Consumers are looking to be “So what’s the playbook for creating That’s not to say there aren’t challenges delighted, to discover new items that a successful subscription startup? in the subscription box business. One fit into their lifestyles and immerse It’s complicated, but it seems like of the biggest obstacles to overcome themselves in an experience. it hinges on a business model that is something magazine media are goes beyond making money on the well-prepared for and knowledgeable For you, offering people a place to sign box itself, and investing in content about: churn. Retaining subscription box up for a subscription box could also play that makes the unboxing experience subscribers is as big an issue in that into them subscribing to magazines exciting every single time,” wrote industry as it is in ours. Keeping customers and newsletters. Data on these new Elizabeth Segran for Fast Company. subscribing, engaged and excited by the subscriber preferences would also allow brand and its offerings is key. you to target specific segments for ads.

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Analytics of this new audience could help you shape future personalisation features and future products.

“We created a new wing of our company – with not only new employees, but new employee categories. New departments. New physical space. This is not for the faint of heart, or the halfway effort. This changed everything,” said David Webb, Editor-in-Chief, Explore magazine in Canada. ● David Webb, editor-in-chief, Explore, steers his co’s products etc etc

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02 Types of boxes

Membership

n September 2018, the Writers’ Guild of Alberta in Canada launched its own subscription box of literary magazines, Isending out four different Alberta literary magazines per year. “It provides another benefit of membership,” explained Jason Norman, Programme and Events Coordinator for Writers’ Guild of Alberta and Publisher of Funicular magazine.

“The subscription box is a good deal financially for people who One-offs would like a sample from different literary magazines and may not have a subscription to some or all of those options at the If monthly subscription boxes are too much commitment, you moment. The subscription box is also a small way that the WGA could create a one-off. Several brands offer one-offs, including can support Alberta literary magazines that publish many local beauty and health boxes from Glossybox or limited edition writers and do a lot of hard work to strengthen the literary mystery Glam Bags from Ipsy that come with five surprise scene in their areas,” he said. items.

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What do you need to build and distribute a digital subscription box? Some subscription boxes, while box and a gift box purchase. Sephora, available in three, six or 12- for example, has announced its Luxe month subscriptions, also offer box is not available by subscription, The benefit of these digital “boxes” is of course that the chance for consumers to according to SubscriptionInsider. they require little in the way of distribution and physical purchase as a one-off. From Instead, it’s a one-off purchase that logistics. They do require more complex authentication coffee to bridal boxes with offers consumers six samples to choose and access controls, however - a subscriber to the wedding and hen party must- from. Another is Glamour’s Beauty box product needs specific access to gated content haves, a one-off option gives box special edition that includes and the publisher needs to be sure the customer is not consumers the opportunity skincare and haircare for Glamour sharing any access links or logins widely among friends of trying out your box before Beauty Club members exclusively. (the “Netflix problem”). committing further.

Customer Journey Orchestration tools such as Some one-off boxes are Zephr are invaluable for any firm designing a The Digital Box special collections, like the digital subscription box. They provide an ability to High Definition box from There is of course, another option beyond progressively profile visitors that allows publishers to Latest in Beauty, which allows the physical subscription box. Many understand their audiences’ desires. The product and consumers to build their own publishers now have a range of events, feature creation capabilities they offer can then create personalised boxes with three, six masterclasses and other digital goodies specific boxes for each cohort. or nine products, or the Selfridges that they could package as part of a Beauty Collection, a one-off, monthly box. Is it a money-can’t-buy And journey building tools then ensure the right limited-edition box that includes 30-minute fireside interview with the audiences see the right products at the right time. three cosmetic products. publishers’ crossword-setter? Or a free Identity and access management features round out ticket to a session with the chief sub- the mix, ensuring that only those who have the right to Be aware that a one-off may blur the editor of the paper for an insider view see those digital goodies actually end up with them. line between a one-off subscription of how the publication is put together?

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What about a one-to-one with a senior and, in return, a publisher gets valuable journalist, or even the chance to see your first-party data that can drive the next own name in print? interaction. Did they watch the webinar for just 10min? Or did they commit to These “golden tickets” - for either and watch the whole thing?” individuals or groups - can bring subscribers closer to a publication, Lessons can be learned from the and allow them to experience the thrill e-gaming industry, where so-called “loot of connecting with those they usually boxes” have been a principal revenue only see in print. Organisations like stream for years. In 2018, Fortnite, the The Guardian in the UK have been popular fantasy shooter, raked in over experimenting with events and member- James Henderson $2.4B in revenue, from a mix of one-off only access for years with great success. CEO, Zephr digital goodies and subscription passes which allow players to access “rare” These digital products can still be reduced churn. And personalisation really or “limited” items. In April of that year, presented as surprises. Monthly ‘reveals’ matters - after all, there is nothing worse Fortnite made $300M alone. ● can be delivered directly to inboxes. than receiving a gift you don’t know what With digital delivery, there can also be to do with! a high degree of personalisation far beyond traditional subscription boxes. James Henderson, CEO of Zephr, points By tracking (or asking) what members out that this digital mode of engagement are interested in, box compilers can can be very powerful for publishers as it quickly assemble different packages drives a flywheel of positive feedback. “If for different cohorts of customers, you can deliver a digital experience that’s leading to increased engagement and out of the ordinary, that builds trust -

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03 Revenue options

Subscription revenue

Most of the magazine media we spoke to for this report based their subscription box off subscriber revenue.

For example, Mike Velez, Publisher of Jiu- Jitsu Magazine, bought two subscription box businesses in 2017, he wrote in an article for Publishing Executive. “Since The BJJ Box by Jiu-Jitsu magazine then, I’ve leveraged my magazine brand, Jiu-Jitsu Magazine, to grow the combined subscription box business by account for more revenue and profit than nearly 5x in just over a year, while at the the magazine operations. I couldn’t have same time helping to grow magazine done this without the unique position advertising and circulation. By the end of having the magazine affords me,” he 2018 our subscription box business will wrote.

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Break-even or loss isn’t part of the Some subscription boxes have been one of the Hudson Yards buildings. subscription box strategy. “While sponsored by big advertisers. Take, branding is important, our goal is to for example, the Robb Vices April make R&T Crew a sustainable revenue 2017 box ‘A New Definition of Luxury,’ Advertising stream,” said Michelle Panzer of Hearst which was sponsored by the real Autos. “Breaking even or taking a loss estate developer, and inspired by Surprise! You can advertise around, on, isn’t a strategy we are interested in.” the sleek, upscale experience of and inside your subscription box. Hudson Yards in Manhattan. Inside were products from two Michelin- Options range from inserts, to Sponsorships starred chefs who were opening advertiser logos on the box, to actual Robb Vices April restaurants there, there was a sound products, to print-and-digital-and-box Sponsorship is another way magazine 2017 box ‘A New system from Neiman Marcus, which advertising packages. You can include Definition of Luxury’ companies are earning revenue from was sponsored by a was opening in the complex, there were advertising in email promotions or subscription boxes. Advertising clients real estate developer fitness headphones and gift certificates featured collections about the box and partners often sponsor curated or for private training sessions. Even the on your website. You can even create themed boxes for select audiences. packaging was themed: a luxury wool content around the items in the box, wall covering that was featured in to run additional advertising against.

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For example, Allure’s Beauty Box: “On top of subscription, sponsorship and affiliate revenue, the Beauty Box inspires more content against which Allure can run advertising: Each box gets its own unboxing video treatment on YouTube, and social media posts for the boxes are often sponsored on Instagram… it found through customer research that one out of six beauty box subscribers become subscribers of the publication, and 74% of subscribers purchased a product after receiving it in a box,” wrote Hilary Milnes on Glossy. Allure’s Beauty Box this trail and now have the best system box hands-on, by creating a product for subscription boxes in Canada,” on a recurring basis, sourcing product Subscription boxes said Explore’s David Webb. “We have a from all over the world, bringing it to as a service warehouse, we have packing staff, we one place, packaging it beautifully, and have factories on contract, we have then getting it to a customer within You can also bring in revenue by advertisers/partners. We have it all.” a certain amount of time. Developing contracting out their subscription box that infrastructure means you could services. Explore magazine in Canada Contracting out the subscription box look into creating boxes for companies has become a subscription box fulfilment fulfilment services is something you who are seeking to communicate company. “We even contract out our can do, as you develop the strengths their stories in custom box and fulfilment services because we blazed and logistics of creating a subscription editorial, to their own audience. ●

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04 Planning ahead

ow far ahead should you start evolve our brands into businesses.” planning? Plan ahead because Hthis is not something you can output in a matter of days. Research

Michelle Panzer of Hearst Autos told us One of the first steps is to a) consult this that what her team did with R&T Crew, guide, or b) consult others to see how seemed an accelerated process. “We to achieve a subscription box. Whether created the product from concept to that other person is your Chief Marketing final product (the first box this January) Officer, or a core group of loyal readers, in about five months,” she said. “This was or your editorial staff, the idea is that you possible in our case because we have do research on the need and market for a

the resources here in-house (from editors rawpixel.com box in your niche. and writers to sourcing and fulfilment) and we have the support to try new “Doing research to determine proof-of- concepts and models as we continue to concept is always a smart idea,” said

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Panzer. “The goal is to find ‘white space’ member. You audience is your biggest prices go up from there. You may also in the market where you can fill a need asset in garnering organic growth. consider international duties that that no one else has already identified.” international subscribers will have to pay, varied shipping fees depending on region Before starting a subscription box, Amounts or country. magazine publishers need to think about what is the need, why would people » Your box price » How much stuff do you include? want and need this? You really need to Your market research should also take After you’ve figured out the white space make sure it is going to surprise and into consideration the cost of your box, and where the need for a subscription delight people, and that your audience the cost of credit card fees, and the cost box is, the next step is to curate products is going to want this product. You must and amount of product you put in your to include in the box. What do your understand that market well first. box. readers want on a recurring basis? What do they come to you for? How do Make sure that the fundamental business In calculating the price of your you curate products to include in the economics of the box make sense. As subscription box, Cratejoy suggests subscription box? the creator of a subscription box, you that you ought to consider the costs will need to think about retention, cost of “products, shipping, credit card fees, Given that subscription boxes range in per acquisition and lifetime value. Why packaging materials, custom box design, size from that of a shoe box to an office- would someone want to be part of and marketing costs,” and the cost of printer, the number of items to include this venture in two years? To get a your own time. It even includes a handy ranges from about six to 10. sense of whether your readers will cost calculator. buy it, you could try surveying a core For example, the Winter 2019-2020 group of loyal and engaged readers. According to MySubscriptionAddiction, Explore Live the Adventure Box included There’s no more valuable marketing a subscription box costs an average of a magazine, dry bag backpack, a buff, an than word of mouth, said one FIPP $10-40 each a month, but, of course, emergency sleeping bag, a compression

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You’ll need to source suppliers, manage but toques work,” explained Explore’s inventory, and think about the size of David Webb. your box’s items. You’ll need to navigate box sizes and » Size pricing depending on what’s in your box. Size is an important point to consider, and all of the publishers we spoke to said “Typically, we don’t include, for example, this part of the logistics involves a bit of drinks or large bottles of liquid. We try magic or chemistry. to avoid things that are too heavy. In the winter we also avoid things that In some countries, size matters a lot freeze because it’s very cold,” explained because shipping is expensive. In the Katharine Herringer, Editor-in-Chief of sack, zipper repair kits, two carabiners, Explore magazine’s UK, letterbox sizing has become popular Canadian magazine Maple, which also Adventure Box reusable beeswax food wrap and a toque. for subscription boxes because the offers the Maple Box. casing fits through the letterbox. Take, Start with your advertising partners, for example, Garcon Wines, a UK-based At this step, you’re ready to dig into because they might be willing to provide wine bottle manufacturer who produces logistics. ● product samples. Your advertising flat bottles made from pre-existing, partners might be willing to sell you recycled material that are designed flat product for a discount, or sponsor to fit through an average UK letterbox. products. Perhaps you procure product at promotional costs that recognise the “The box size varies a little, but generally impact you have when you introduce all the products we source need to be: these new products to your audience. size specific (fits in box), gender neutral and size neutral. No T-shirts, for example,

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05 Logistics

reating a subscription box is to learn about box design, packing processes… brand-new advertising and outside of many magazine processes, production times, shipping marketing models. Not just brand-new to Cmedia’s comfort zone, as there times, product support, customer service, us – I mean ‘brand new in the industry’.” are lots of new logistics to master. and deal with things like Chinese New Year shutting down overseas factories for Logistics involve sourcing suppliers, “We had to switch from being only a a few weeks, he explained. managing inventory, dealing with media brand to warehouse and inventory customer questions and complaints, control centre as well. I personally “We had to learn everything from the packaging, transport, shipping or had to add ‘buyer’ to my skillset ground up. We packed the first test distribution. In some markets like the UK as a magazine editor. ‘Box packer.’ box in our office, and the next one at a and Spain, magazine companies already ‘Shipping expert.’ ‘Quality assurance warehouse space. We learned it all on the have these areas under control, as they pro.’ ‘Forum moderator,’” Explore’s fly, and used these lessons to be better offer cover mounts and already know how David Webb said. “I’m on WhatsApp with the next one,” he said. to handle this part of the process. to China at 11pm on a Tuesday.” “We learned about shipping out missing But adding these extra responsibilities Specifically, Webb and his team had products, warranty returns, receiving can be a new and heavy burden for

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magazine companies who may not have What platform to choose? Or, go in-house. See our case studies in experience in these areas. Make sure to Part 5 for examples of publishers who foresee and plan for the amount of work Next, pick a software platform to manage took their subscription box business this will require. your subscription box that will keep in-house. track of subscribers, billing, preferences, “Starting a subscription box from scratch labelling, and so on. with a small team is no easy feat,” said How do you obtain products? Michelle Panzer of Hearst Autos. “We CrateJoy is one option that gives have learned so much already about companies a simple and cost-effective Is this an advertisement sold to brands, product sourcing, boxing, distribution, way to set up and manage their or do you actually buy the product with a list management, payment processing, subscription box business. There is no discount? design and development, brand technical knowledge required, it is a marketing, and customer acquisition. plug and play option that sets up Unlike Birchbox, whose model relied on the subscription box site, manages acquiring product samples free of charge, “One of the reasons we were able hosting, billing and payments. acquiring product for your subscription to move from concept to final box involves effort. product so quickly is because Another option is Subbly, of the resources within Hearst. which is an all-in-one Most of the magazine companies we CDS Global, a Hearst company, subscription ecommerce spoke to for this report talked about how is the leading provider of end- solution that provides they obtained products in three different to-end business process outsourcing, companies with everything ways: managing 200 million consumers for they need to set up more than 1,000 brands. So leveraging a subscription box business 01 They work with advertisers and our internal resources was key in making Hearst’s R&T Crew on one simple, easy-to-use brand partners to acquire products this happen.” subscription box. platform. free of charge

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02 They work with the same to Costs to acquire products deliberate presentation of your product, acquire products at a discount depends on your box. At is a branded packaging experience. one end of the spectrum is According to postal services, it’s more 03 Sometimes products are Birchbox, and at the other end, important than you think. “Its purpose sponsored the value of the products in is to provide additional value for your some high-end subscription customer as well as your business “In order to connect with brands boxes is hundreds of dollars. through the ability to create a memorable that want to be featured in and sharable experience.” the box, we draw on many of our advertising clients that advertise in Packaging Maple magazine or we’ve had pre- Katherine Herringer Packaging done well offers companies existing relationships with,” explained poribusam aut aut et One of the biggest expenses in the opportunity to create a memorable Maple Box’s Katharine Herringer. subscription boxes is packaging. experience for their box subscribers. Shipping, too, is an expense that can “A branded packaging experience is a David Webb from Explore outlined their often be underestimated. thoughtful selection of shipping and approach. “We work with sponsors and packaging materials as well as how you’ve brand partners to acquire products and You can customise your subscription decided to present your shipped products,” we also go direct to factories to have box packaging in a number of ways. In writes Thea Earl on the Shopify blog. specific products manufactured for every addition to custom boxes, you can use box,” he said. “Our brand partners are a bubble wrap, packing peanuts, crinkle A great package invests in how the box big part of the box – they appreciate paper, tissue paper, and separators, all of items are packaged – because the box is that they can get their materials and which can be customised, too. an experience. The moment a subscriber products directly into the hands of active opens the box and sees items for the users and buyers through us.” A thoughtful selection of packaging first time is really important. See more on and shipping materials, and the unboxing in the Markerting chapter.

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Delivery and distribution Esquire magazine’s » In-house fulfilment » Third party Sprezzabox A number of magazine media have The next step in creating your taken fulfilment of their subscription subscription box is looking into boxes in-house. Women’s lifestyle site distribution options. Magazine publishers PopSugar made the jump into commerce have long had distribution departments, in 2012 with Must Have, a $40-a-month- some sell by newsstand, others by subscription box that today accounts subscription. Even with the explosion for 20% of its revenue. PopSugar does of digital channels, from OTT to social, all of its fulfilment in-house, according to magazine media know how to get their Digiday. product into the right hands. Conde Nast’s Allure Beauty Box is Subscription boxes are no different in-house, too. “We’re running all – logistics must be taken into launched a subscription box in October the procurement, marketing and consideration. How will you get this box 2019 with Sprezzabox, to deliver curated manufacturing, but we also own the that you’ve worked hard to fill, into the collections of the most in-demand men’s customer data,” Allure’s then Publisher hands of your subscribers? fashion accessories. and Chief Revenue Officer Agnes Bogdan Chapski told Digiday. Some companies choose distribution “In collaboration with the editors services, some choose a third-party of Esquire, we’re pleased that our You could: distribution in certain geographic partners at Sprezza have curated » Work with sponsors and brand locations that are closer to their an array of fashion accessories that partners to acquire products subscribers for better service. embody the very essence of style which our readers know and expect,” said » Go direct to factories to have Take, for example, Hearst’s Esquire, which Hearst’s Steve Ross. product manufactured

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Logistics during a global pandemic

» Handle all of the operations in-house (this option requires you to build out all BEWARE of significant challenges that of these areas, though) have arisen as a result of the Covid-19 pandemic. After starting with a fulfilment company, >> Take into account that the pandemic Maple took its subscription box in-house, strained supply chains that were already in because it was important to it how its PopSugar’s Must Have Box flux or partially shut down. boxes were filled and presented. It didn’t >> Fulfilling products for brand partners may fulfil the level of quality that it needed. be particularly difficult. As a result, some subscription box teams have had to rebuild “They just literally toss the items in the their product curations. box and they don’t really care,” explained

>> Adjust your curation to address the way Maple’s Katharine Herringer. “For us, that people are living now and focus on we are so much about the curated delivering a moment of joy and a bit of an experience. It was important that we had escape from the quarantined routine. 100% control of our subscription box. We now have our own packing team, our own >> You may lose sponsors, as businesses pause or cut their advertising spend. warehouse.” ●

>> Be aware that the pandemic has and will impact packing and assembly, as suppliers implement additional cleaning protocols and practise social distancing to keep their employees safe.

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06 Marketing

arketing your box is an essential part of the process. Doing at the Indy 500, outdoor advertising, Mresearch to determine proof-of- geotargeting, and in-home mailings. concept is always a smart idea, Michelle Panzer of Hearst Autos said. “The goal is At Explore magazine, David Webb to find ‘white space’ in the market where explained that the CMO did the initial you can fill a need that no one else has research on other subscription boxes already identified.” in the marketplace, “But we forged the path on this one – there was In the case of R&T Crew, everything no model to follow for a Canadian is designed by the Hearst Autos magazine publisher to sell a subscription marketing team. “We don’t have many box to its readers,” he said. specifics because we really haven’t done a big marketing push beyond “We hoped it would be a good fit because promoting the subscription box within Explore readers are hyper-niche. We know the pages of our own Hearst titles R&T Crew’s the next few months, they were on what they love – outdoor recreation – and on our own websites,” Panzer unboxing video track to activate a larger marketing and we can use my expertise to curate told us in January. However, over push that will include an activation gear that helps them get outside. Plus, we

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“The unboxings from our influencers are great because so much of our box is about product discovery”

already had a huge digital reach and a Unboxing is a huge component of very engaged print audience. We had the the Maple Box’s success, thanks to brand recognition and respect.” its community of macro influencers. Herringer explained Maple Box’s macro If you type “unboxing” into YouTube, the influencers have a minimum of 30,000 to highest hit video has 214 million views 50,000 followers and they’ll do unboxings (it’s a PJ Masks playset). Unboxing for the brand. experiences can have benefits for your business you mightn’t have considered. “That’s part of the excitement,” They build trust and loyalty for your Herringer said. “The unboxings from our brand and they drive repeat sales. influencers are great because so much of our box is about product discovery. But be warned: a bad subscription box We love introducing new brands to an also has the potential to negatively audience that might not know them. impact a title’s relationship with its And, there’s always a story behind readers and advertising partners. Explore Magazine’s us for four to five boxes,” explained that really connects the products.” In “Live the Adventure” Herringer. ”The majority of our original addition, the box’s advertising partners unboxing video “Every element of the unboxing subscribers are still subscribers today, a and clients are getting third-party experience is so important to us and year later. Which, as I understand it, is not validity by being in the box, but also that is part of our strength and why so industry standard.” being tagged and getting that visibility many of our subscribers will stay with on social from the influencers.●

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07 Case studies

● Hearst Autos’ R&T Crew: clearly that this community feels so “Putting education into much passion for everything automotive,” entertainment is like hiding she explained. “They want to live it, share zucchini in chocolate muffins” it, buy it, and they definitely want to pass it along to everyone else! If you’ve ever WHEN Michelle Panzer of Hearst Autos been to a car show or concourse, you’ve joined the company in April of last seen families gathered around amazing year, she was tasked with building the cars and kids gawking at incredibly enthusiast business for Road & Track, beautiful feats of engineering on wheels. which is Hearst’s automotive brand focused on motorsports, performance “One of my colleagues has a friend who driving, vintage autos and new cars. is a mother. She asked if we had a car magazine for kids, and that was the ‘a- “I was developing the first of our ha!’ moment for us. It just hit us: We could immersive, multi-day road-rally build out an experiential business for our experiences and, in doing so, saw very adult audience (including our rallies and

26 FIPP Insight Report

other experiences) and we could educate entertainment is like hiding zucchini in Panzer said because Hearst has so much and entertain the next generation of chocolate muffins.” at its fingertips – the support, resources, auto enthusiasts! That’s how our first and infrastructure – it was able to subscription box came to life.” Subscription boxes were a good fit for create the entire R&T Crew subscription Road & Track because the magazine programme in just five months. R&T Crew soft-launched during the brand is more than a magazine or Christmas 2019 season, and started website – it’s a community, a lifestyle and “I’m very lucky to work in a place where shipping in January 2020. It is designed a way of life, Panzer said. we can take an idea and make it happen for kids aged six and older. Subscribers so quickly,” she said. receive six boxes for $225/year, and “It’s the ideal brand to take beyond each box includes an issue of R&T Crew the pages of a magazine and offer “Starting a subscription box from scratch magazine and at least five accessories experiences – whether that’s a SIM racing with a small team is no easy feat! We or activities, Panzer said. Families can series, a rally through the redwoods or a have learned so much already about also opt to receive just the magazine for kid’s club,” she explained. product sourcing, boxing, distribution, $25/year. list management, payment processing, “Cars are the ultimate feats of science, design and development, brand “R&T Crew is designed to be fun and technology and engineering so the R&T marketing, and customer acquisition.” entertaining but also to educate and Crew subscription box will always include inspire by taking a STEM approach something to construct and/or design, One of the resources Panzer had was to exploring the ways science, tech, and the magazine will feature stories Hearst company CDS Global, which is a engineering, and math both drive and are about automotive innovation. And, provider of end-to-end business process driven by the mobility industry through of course, we hope that as our young outsourcing, and manages 200 million stories, games, puzzles, experiments subscribers age, they’ll graduate from consumers for more than 1,000 brands. and activities,” Panzer said. “We like Crew to the Road & Track flagship.” to say that putting education into the “Leveraging our internal resources was

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R&T Crew is fun and entertaining but also educates and inspires by exploring the ways science, tech, engineering, and math both drive and are driven by the mobility industry through stories,

games, puzzles, experiments and activities” Michelle Panzer, Chief Marketing Officer, Hearst Autos

key in making this happen and also in products and acquire them, CDS Global Track offerings means that R&T has so managing cost centres,” Panzer said. does the fulfilment.” much more to offer its consumers now, “Our internal Hearst Autos marketing Panzer said, from print products to one- group develops each theme, sources The theme of the first R&T Crew box that of-a-kind driving experiences. and designs each product, and creates shipped in January 2020 was ‘Snowed In,’ the magazine. Our colleagues at CDS and Panzer said it was packed with fun “I’m looking at our entire portfolio and handle boxing and fulfilment. There are things to keep young enthusiasts busy exploring ways to expand touchpoints no limitations to what a box can look like and cosy, including a colour-in poster and deepen engagement. We hope new or include but, of course, it’s important to that tracks the design evolution of the readers come to us through R&T Crew consider shipping costs. automobile, super-soft socks with that and, at the same time, we hope our fans same design, a winter hat featuring the and consumers join us for the unique “In our case, our internal marketing R&T Crew logo, trading cards with facts events and experiences we’re creating team sourced the products, working and figures about both new and vintage this year,” Panzer said. closely with the Road & Track editors to cars, a 3-D model car to build and, of determine what would be interesting, course, the R&T Crew magazine filled with “We soft-launched R&T Crew over educational, unique and, most of all, fun stories, interviews, games, puzzles, word the holidays with advertisements in for kids. As I mentioned, the lens we use searches and more. our automotive titles and across the to vet all the options is STEM-based Hearst portfolio, and the results were entertainment. Once we lock down the Adding a subscription box to the Road & very encouraging! It will be exciting to

28 FIPP Insight Report

see what happens when we put our the launch. Thankfully, we had systems various digital and brand-development in place to manage this growth. We’re strategies in place and really rev things optimists!” up!” Webb said his team forged a path for the LTA box, as there was no model to ● Explore Magazine follow for Canadian magazine publishers to sell subscription boxes at the time. Live the Adventure Club: “It Their CMO did the initial research on the caught on like wildfire.” subscription box marketplace, Webb said. OFFICIALLY called ‘Explore Magazine’s Live the Adventure Club,’ this Canadian “We hoped it would be a good fit because magazine’s subscription box is a Explore readers are hyper-niche. We know quarterly box of outdoor gear and a what they love – outdoor recreation – current issue of Explore Magazine, and we can use my expertise to curate curated by Editor-in-Chief David Webb. gear that helps them get outside. Plus, we outside – weekly, monthly, bonus, annual... already had a huge digital reach and a “We pair the gear with outdoorsy non-stop engagement and prizes. Plus, very engaged print audience. We had the challenges and a private forum where we we offer discounts on other gear, from brand recognition and respect.” engage our community and give away partners, and so on. Value-loaded.” tons of gear for people who participate in Each box includes a copy of the the challenges,” Webb said. The inaugural LTA box was launched in magazine. The Gear Box is very much December 2016, a small test run, Webb connected to the magazine brand, Webb “In this forum, we also have more explained. “It caught on like wildfire and said. Subscribers can get a traditional challenges to inspire people to get by Summer 2017 we were more than 10x magazine-only subscription but the Gear

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Box is like a premium subscription. “It’s an their kids transition from toddlers to outdoors magazine, with tangible gear school age, or helped them get back into and challenges to help you get outside. shape – or in shape for the first time. Read the magazine, get inspired, use the Honestly, we have had member feedback gear, get outside!” he said. that has brought tears to our eyes.”

To fill Explore Magazine’s Live the Explore Magazine’s LTA club also includes Adventure Club subscription box, Webb a Facebook forum. The subscription box and his team work with sponsors and inspires outdoors experts to share their brand partners to acquire products, knowledge with others, and absolute and also go direct to factories to have newbies learning to camp for the first specific products manufactured for every time, Webb related. “Family is a big box, he said. And in doing all of this, Explore became a component – a lot of families use the fulfilment company. gear and the challenges to get their “There are sponsorship packages for whole families outdoors.” advertisers that range from a small The response to Explore Magazine’s insert, to logo-on-the-box, to actual Live the Adventure Club box has been Since 2016, Explore magazine has physical products, to print-digital-box huge, Webb added. “In the first year, shipped more than 45,000 boxes. advertising combos, and pretty much it blew us away. The initial growth The box, which has a membership of any combination thereof. Our brand was madness. Member feedback has 3,000, brings in new subscribers to the partners are a big part of the box – always been very positive. We have magazine and to the box. They have they appreciate that they can get their had people tell us the box and the found that while there is some subscriber materials and products directly into the outdoorsy challenges has helped them churn and retention is high, many of their hands of active users and buyers through ‘find themselves’ following a divorce, or subscribers transition to a magazine-only us,” he said. re-kindle the love of the outdoors after subscription afterwards.

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“Exponential growth is a good problem ● Writers’ Guild of Alberta great start.” to have, but it becomes a logistical Alberta Magazine Literary Sampler: challenge of its own,” Webb said. “So, “Strengthening the literary scene” The WGA’s Alberta Magazine last year we decided to cap membership Subscription Box is an extra option that at 3,000 boxes per season. (This SUBSCRIPTION boxes come in all shapes can be added to any guild membership was down from our peak of more and sizes. Offered by the Writers’ Guild that will send members one issue from than 4,000.) This allows us to focus of Alberta, this subscription box isn’t a four different Alberta literary magazines on delivering quality products and a physical box like the others profiled in this per year, Norman said. The magazines value-loaded experience, rather than report. include Glass Buffalo and Funicular out of just growth. Warehouse space is a Edmonton and Filling Station and FreeFall finite commodity. Growth becomes the “First of all, it’s not a physical box of out of Calgary. The box was first offered quintessential 800-pound gorilla.” stuff,” explained Jason Norman, WGA’s in September 2018, and issues were sent Programme and Events Coordinator. “The out that autumn. Webb explained that Explore also WGA doesn’t send them out directly. has 1,000 members in the Adventure We collect the names of subscription The subscription box was a good fit for Challenge Club (ACC), “which we box subscribers and send them out to the Guild, which was established in 1980 internally call the ‘no gear box,’” he the magazines when they request them. to provide a collective voice for Albertan said. “Basically it’s the magazine, the Each magazine only has to send out the writers. It is a benefit of membership, challenges, the forum, the prizes – but no subscription box issues once per year. Norman said. “The subscription box actual gear box. Obviously significantly Normal subscription boxes are something is a good deal financially for people reduced in price, but it keeps people in that can arrive monthly and be filled with who would like a sample from different the community they love when they’ve dog treats or comic book toys and things literary magazines and may not have decided they have enough gear.” like that. It would be nice if there was a a subscription to some or all of those literary option for people like that but options at the moment,” he said. right now a literary magazine sampler is a

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“The box is also a small way that the WGA can support Alberta literary magazines that publish many local writers and do a lot of hard work to strengthen the literary scene in their areas.”

Norman offered some advice for publishers looking to start their own subscription box. The main logistic you WGA’s Alberta few paid staff, Norman said. more of the literary magazines included have to master seems to be distribution, Magazine Subscription in the future. “The WGA has a small staff Box he explained. Each of the magazines in the WGA’s and we do what we can but it’s been a subscription box have different fairly good response so far and many “When a new member signs up or distribution models and send their issues people are renewing their subscription an existing member renews their to subscribers individually. “It’s really just boxes for another year,” Norman said. membership and adds the subscription a matter of sharing the subscriber box box option to their WGA membership user data with them when they need “Ideally I would love to get the word out they can do this at any time during the it. Our job is to maintain that list. It’s more, because it’s a great deal. If the year,” he said. “They get added to the something that is very easy to scale programme keeps going for a number of subscription box list and if it’s in January up and I hope that we keep growing,” years I hope that we’ll see the lit mags the idea is that by next January they Norman said. getting a bump in subscriber numbers should have received four copies of the from it.” Alberta literary magazines.” The response to the Writers’ Guild of Alberta’s subscription box has been good. The revenue that comes back to each Literary magazines in Alberta are small WGA members who get the subscription magazine is something that helps with operations run mainly by volunteers or a box are more likely to subscribe to one or the promotional side of their business,

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Norman said. “This is something magazine,” Herringer said. “We really do product, Herringer said. “The Maple box that we hope in the future will grow focus on those Canadian brands. The is seasonal,” she said. “We’ve got our subscriptions to these individual products that are in the box can range spring rejuvenation box coming up. Then Alberta magazines over time... As a from skincare to body care, lifestyle it’s the happy summer boxes and the promotional expense it is definitely accessories to natural health products, cosy autumn box. In each of the boxes, something that is affordable and a lot with a luxury component.” we’ve got a lot of those seasonal things of the costs can be covered by each and then they always get a copy of the new subscription box name we sign up.” One of the things that Herringer tries to magazine in there as well.” do with the Maple Box that is different from other subscription boxes is have a The Maple Box launched and was sold Maple Magazine: light footprint, avoiding soft plastics in out within its first two weeks, Herringer their box, using recyclable material, and said. It was great, but they didn’t expect The Maple Box housing all of their items in a beautiful that to happen. “We grew very quickly. MAPLE Magazine is an independent canvas bag. “Unlike other beauty boxes Now, we have 1,000 subscribers across niche title in Canada that focuses that have a lot of single-use plastics, we the country. We’ve even tapered our on true north organic living and really do try to reduce that,” she said. “We growth. In the last quarter of 2019 we lifestyle. Its subscription box, The also tried to not include a lot of items spent sort of upgrading our internal Maple Box, contains luxury, organic that are manufactured overseas and infrastructure and setting up again for and natural products, explained instead focus on Canadian companies.” like a second phase of growth.” Katharine Herringer, co-founder and Editor-in-Chief of Maple magazine. The inaugural Maple Box was launched in A subscription box was a good fit February 2019, and it has been shipped for Maple magazine, because the “It’s an excellent platform for us to be out quarterly ever since. The Maple brand is such a wealth of curated able to launch a box especially and Box is priced at $90 CAD per box, and brands, Herringer explained. “We do profile brands that we talk about in the contains approximately $200 worth of talk a lot of nature, a lot of editorial

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“Because we’re one of the only players in our space, we have had very, very strong response to the launch of the Maple Box.” Katharine Herringer, co-founder and Editor-in-Chief, Maple magazine

around brands and products and investment, so you have to be really movement. We’re really good curators. clever with other elements of the box in It felt like a really natural fit.” order for it to be viable.”

Though, in Canada subscription boxes For fulfilment of the Maple Box, Herringer aren’t as big a market as in the US and her team started at a fulfilment or the UK, and that largely has to do house, but discovered it wasn’t a great fit with the cost of shipping, the editor for them. It didn’t fulfil the level of quality said. Part of the secret to success of a that they needed, so, Herringer decided Canadian subscription box is being able to then become an independent. to navigate and create a formula around how to offer free shipping in a very “Without giving away any secrets, there inhospitable environment from a shipping is a little bit of magic involved. We started perspective. Because again, shipping in at a fulfilment house, but as a brand that Canada is probably four times the price is so highly curated, every aspect of the of shipping in the US. Ideally you’d like to customer experience is so important to offer free shipping, but it’s very expensive. us from the customer service to how it’s That is definitely one of the hurdles that packaged. Every element of the unboxing we have to overcome. “Shipping is a big experience is so important to us and

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that is part of our strength and why so huge increase in our private subscribers many of our subscribers will stay with us across Canada.” for four to five boxes. The majority of our original subscribers are still subscribers Over the last quarter, Herringer said today, a year later.” Maple has acquired its own packing team and warehouse. It was important The subscriber response to the Maple that Maple had 100% control of the Box has been fantastic, Herringer said. process. Much like Maple magazine, “We’ve had to taper our growth to be which is always invested in quality from able to get proper infrastructure in place. the typography to the paper quality, the Because we’re one of the only players Maple Box reflects that care 110%. “I’m a in our space, we have had a very strong founder, I’m the editor of Maple magazine response to the launch of the Maple Box.” as well as the Maple box,” Herringer said. “And I am very engaged in working with The box brings in new subscribers to our packing team. I personally, weigh both the box and to the magazine. “So many of the boxes to make sure of if, for example, the Maple Box costs $98 the accuracy as everything meets our a season, whereas a Maple magazine standards. We’re incredibly hands-on and subscription is $35 for the year. For that is a big part of our brand’s promise is people who might be more price maintaining that really high quality.” ● sensitive, maybe they just want the magazine. So because of our activity online, because of the influencer or unboxing and our advertising on Facebook, we do get a lot. We’ve had a

35 In partnership with

fipp.com zephr.com

Zephr helps the world’s leading media companies, brands and organisations to gear-up for the subscription economy. Businesses that use Zephr give visitors tailored digital journeys based on real data, leading FIPP - Connecting Global Media represents to increases in subscriptions, improved ad yields and stronger, longer content-rich companies or individuals involved customer relationships. Zephr initially focused in the publishing industry in the creation, publishing or sharing of quality but has since developed into automotive and gaming. Founded in 2017 content to audiences of interest. FIPP exists and headquartered in London, Zephr already works with dozens of major to help its members develop better strategies clients globally - including a host of international media brands such as and build better businesses by identifying Conde Nast, News Corp and Dennis Publishing. Last year Zephr set up and communicating emerging trends, sharing operations across Europe and in the US, recently welcoming both Central knowledge, and improving skills, worldwide. Mediacsoport, Tribune Publishing and The New York Post as clients.