2. |
SAMPLE SIZE
3M+ online panelists
1.5M+ mobile devices
DATA DEPTH
9 M websites
160 M Keywords
20,000+ consumer attributes
DATA FREQUENCY
From Hourly Insights
Through To
Yearly Trends
About Us
2
3. |
3
Agenda
3
1. Industry Overview – top trends in 2017
2. Audience profile – Who is the sub box subscriber & what are
their needs
3. Collaborations– Zoom into Birchbox
4. Takeaways & Predictions for 2018
5. | 5
The sub box industry is one of the fastest growing retail verticals, rising by
30% in online visit traffic over 2017 YoY.
Source: Hitwise, based on custom industry of 170 leading subscription box providers.
Total Online Visits
By Year
43.3
million visits
59.0
million visits
76.7
million visits+30%
+36%
6. | 6
Source: Hitwise, based on custom industry of 170 leading subscription box providers.
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 2016 2017
2015:
4.5 million visits in Nov & Dec. Dec
slight higher by 2%
2016:
5.8 million visits in Nov & Dec.
Both months on par
2017:
Nov overtakes Dec by 12%, reaching
8.6 million visits
In 2017, activity had shifted to November, as Black Friday became more
widespread in retail.
Total Online Visits
By Month
7. | 7
Source: Hitwise, based on custom industry of 170 leading subscription box providers. Dots highlight peak month.
This shift was largely driven by the Fashion & Beauty category, extending
promotions from Cyber Week to Xmas Week.
Total Online Visits - Categories
By Month
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2015 2016 2017
Fashion & Beauty Food & Alcohol Lifestyle
Fashion & Beauty:
2017 traffic grew by 34% YoY,
Nov 21% higher than Dec.
Food & Alcohol:
2017 grew by 25% YoY,
Visits in Nov & Dec on par.
Lifestyle:
2017 grew by 26% YoY,
Visits in Nov & Dec on par.
8. | 8
Each category has its dominant players (the Top 3 accounting for 60%+ of
category traffic), but top risers are gaining traction.
Source: Hitwise, Visits in Q4 (Oct, Nov, Dec). Based on custom industry of 170 top subscription box providers. * Traffic based on visits to main domain. ** Based on relative difference, for top 20 players.
Top Players & Risers in Q4 2017
By Online Traffic
Fashion & Beauty
Look Fantastic *
Harry’s
Birchbox
Harry’s
Not Another Bill
This is Powder
Food & Alcohol
Abel & Cole
Riverfood
HelloFresh
The Goodness Project
The Mindful Chef
Beer 52
Lifestyle
Tails
Blurt It Out *
Butternutbox
The Happiness Planner
Butternut Box
Protect My Pet
Top
Players
Top
Risers **
9. | 9
The growth among top risers is linked changing consumer interests, as
searches shift to niche interests and occasions.
New Keywords around Sub Box Searches
Q4 2017 YoY
Fashion & Beauty
“Bath”
“Wedding”
“Bridal”
“Brooch”
“Perfume”
Food & Alcohol
“Gin”
“Wine”
“Recipe”
“Vitamin”
“Supplement”
Lifestyle
“Fitness”
“Crochet”
“Gym”
“Gaming”
“Scrapbook”
Source: Hitwise, 12 rolling weeks to 30-Dec-2017. New keywords around the search term “subscription box”, vs. same period previous year.
11. | 11
3.1 million people visited a sub box site in Q4 last year, a rise of 18% YoY. What
do they look like?
Source: Hitwise, 13 rolling weeks to 30-Dec-2017 YoY. Visitors to 170 leading subscription box sites.
Sub Box Shopper in Q4 2017
18-24 yo
16% more
likely
Female 10% more likely
South East &
South West
7% more
likely
PI sub-20K or
over-50K
3% more
likely
Largest Rise YoY
45 yo + 40% rise
Males 125% rise
London & East 28%+ rise
PI 40-50K 72% rise
12. | 12
The sub box audience are fashion-conscious, ethical and influenced by
celebrities and external recommendations.
Source: Hitwise and Kantar TGI, 13 rolling weeks to 30-Dec-2017. Visitors to 170 leading subscription box sites.
What does the Sub Box Shopper care about?
“I spend a lot on clothes” “I like to stand out in a crowd”
“I prefer eating vegetarian”
“I feel reassured using products
recommended by experts”
“I buy fair trade when available”
“I’m easily swayed by other
people’s views”
“Wearing make-up makes me
more self-confident”
“Celebrities influence by
purchase decisions”
13. | 13
But there are differences by sub box category, including audience
demographics and attitudes.
Source: Hitwise and Kantar TGI, 13 rolling weeks to 30-Dec-2017.
Fashion & Beauty
18-24 yo
Female
PI Sub-20K
Enjoys experimenting with make-up to
change appearance
Keeps up with the latest fashion
Food & Alcohol
18-34 yo
Female, Male
PI 50-75K
Often snacks on the move, rather than
eating a proper meal
Would pay more for quality wine
Lifestyle
18-24, 55+
Female
0-10K, 75K+
Prefers holidays off the
beaten track
Changes home décor as often
as possible
14. | 14
There is also growing audience overlap between categories, particularly
Fashion & Beauty subscribers with Food & Alcohol.
Source: Hitwise, 13 rolling weeks to 30-Dec-2017 YoY. Horizontal % shown in above chart, e.g. 13% of people visiting Food & Alcohol Subscription Sites also visited Fashion & Beauty Subscription Sites.
Lifestyle
Fashion &
Beauty
Food &
Alcohol
2%10%-
3%-13%
-13%15%
Fashion & Beauty Food & Alcohol Lifestyle
+19%
+16%
+15% +14%
+6%
+1%
16. | 16
Birchbox regularly collaborates with brands across different industries, from
publishing, design to gifts.
November 2017
Birchbox X Vogue
December 2017
Birchbox X Matthew Williamson
January 2018
Birchbox X Ohh Deer
17. | 17
In the month of the collaboration, each brand received a huge uplift from
Birchbox audiences, especially Ohh Deer.
Source: Hitwise, each month based on 5 rolling weeks. Audience = visits to / searches of featured brand. Chart shows ratio of Online Population or Birchbox Audience also visiting/searching for collaborator brand.
1.1%
8.9%
1.2%
11.1%
Online Population Birchbox Audience
Vogue
Audience
Pre-Collab (Oct-17)
During-Collab (Nov-17)
0.0%
0.2%
0.0%
0.3%
Online Population Birchbox Audience
Matthew Williamson Audience
Pre-Collab (Nov-17)
During-Collab (Dec-17)
0.1%
1.0%
0.1%
3.6%
Online Population Birchbox Audience
Ohh Deer
Audience
Pre-Collab (Dec-17)
During-Collab (Jan-17)
Audience Overlap per Brand
Pre vs. During Month of Collaboration
+25%
+6%
+59%
-38%
+267%
+3%
18. | 18
Birchbox also benefited, seeing an equivalent uplift from each brand’s
audience.
Source: Hitwise, time period for pre-collab and during-collab varies per brand (refer to previous slide). Audience = visits to / searches of featured brand. Chart shows ratio of Each Collaborator’s audience also visiting/searching for Birchbox.
Audience Overlap for Birchbox
Pre vs. During Month of Collaboration
1.6%
3.4% 3.2%
2.0%
8.6%
11.3%
Vogue Audience Matthew Williamson Audience Ohh Deer Audience
Pre-Collab During-Collab
+26%
+156%
+251%
19. | 19
But what audiences did both sub box and collaborator gain? Let’s look at
Birchbox X Ohh Deer pre-collaboration.
Source: Hitwise, Pre-collaboration = December 2017 (5 weeks to 30-Dec-2017). Audience = visits to / searches of featured brand.
Birchbox and Ohh Deer
Pre-Collaboration
Birchbox
110,300
audience size
Ohh Deer
33,300 audience
size
Birchbox X Ohh Deer
1,000 audience size
91% more likely to be Female
25-34 yo
9% more likely to earn
30-40K
20%+ more likely from London
and East
84% more likely to be Female
18-24 yo
10% more likely to earn sub
20K
10%+ more likely from London
and Scotland
20. | 20
Comparing pre (Dec) to during (Jan) collaboration, Birchbox and Ohh Deer’s
combined audience almost quadrupled.
Source: Hitwise, Pre-collaboration = December 2017 (5 weeks to 30-Dec-2017). During-collaboration = January 2018 (5 weeks to 03-Feb-2018). Audience = visits to / searches of Birchbox and Ohh Deer.
Birchbox X Ohh Deer - Combined Audience
Pre vs. During Collaboration
51%
20% 17%
40%
56%
37%
18%
56%
25-44 yo Male London PI 20K-40K
Pre-Collab During-Collab
Combined audience shifts older, more
male, London based, with higher
personal income.
Combined
Audience Size
PRE: 1,000
POST: 3,900
22. | 22
Trends for 2018
1. Sub boxes will continue to grow More retailers and
more verticals will participate, particularly with niche offers
2. Sub boxes will strengthen their brand partnerships More players
will try to collaborate with the best brands
3. As the market and audience matures, Personalisation will become
even more important
23. | 23
Risks for 2018
1. Offer overload
2. Growing competition in sourcing brands
3. Consumer fatigue, leading to high churn
24. | 24
Key Takeaways
1. Target new segments online: which audiences do you want to acquire, what are their interests, and what
is their digital footprint (e.g. search, content)
2. Loyalty is king: track your audience’s needs and interests (what do they care about), ensure these needs
are met and have a regular feedback loop
3. Get ahead of the curve sourcing new brands and offers: track fast moving trends (e.g. visits, search,
social)
4. Ensure collaborations have a two-fold purpose: delight existing customers and open your brand to new
segments
5. Have the right metrics to track success: regular KPIs such as audience overlap, profile and competitive
benchmarking, pre vs. during vs. post collaboration
25. Thank you
B e c k y P o s t l e t h w a i t e
b p o s t l e t h w a i t e @ h i t w i s e . c o m
0 7 8 1 7 1 7 4 0 3 7
Editor's Notes
Compared to Total Retail -> subscription boxes only account for 0.2% of all traffic
But at 30%+ growth YoY, Sub Boxes are among the fastest growing verticals of retail (vs. 5% increase for Total Retail in 2017 YoY).
How was the custom industry built?
Through third party research, media, aggregator sites and downstream from search, Hitwise has developed a list o over 250 sub brands (covering beauty, clothing, pets, food, alcohol and hobbies).
This list was then culled down to the top 170 sub box sites, based on site traffic meeting feasible thresholds.
- Peak in the industry occurs in Nov & Dec like the retail calendar.
- 2017 saw a significant shift to November -> largely driven by Cyber Week / Black Friday becoming widespread in the UK.
2017 shift to Nov largely due to Fashion & Beauty sub boxes -> where visits in that month were 21% higher than visits in Dec.
Out of Hitwise’s 170 list of sub boxes -> - Fashion & Beauty accounted for 55% of online traffic,- Food & Alcohol accounted for 38%- Lifestyle (which includes crafts, pets, gaming) accounted for 7%.
Fastest growth in 2017 also seen among Fashion & Beauty, growing by 34% YoY (vs.. 25-26% for Food & Lifestyle).
Note about Look Fantastic & Blurt It Out – visits to top domain
Q4 2017 saw ->
Shift toward occasions & pampering – e.g. wedding, perfume, bath
Growth in alcohol (e.g. gin), and health sub boxes (e.g. vitamin, supplement, fitness, gym)
Shift to hobbies (e.g. crochet, scrapbook, gaming)
=> So what? Be on top of search term trends & ahead of the curve before the customer gains loyalty with a brand (i.e. repeatable business). Use keywords to target in PPC or content. These terms can also influence product mix.
3.1 million people visited a subscription box site from Oct-Dec 2017 (i.e. 6% of online pop). This was an increase of 18% YoY.
What do they look like first and how has the profile changed since the previous year?
Might be expected -> female, younger, urban, both high and low incomes
Highest growth though seen among more male, older -> particularly among the more “niche” sub box interests.
What do they care about?
Plug for TGI partnership
Sub boxes currently attract -> high retail spenders, fashion conscious, ethical, influenced and people who like to stand out
There are audience differences by the type of sub box
Fashion & beauty: younger, female, lower income, enjoys experimenting
Food & drink: Older, female & male, higher income, time poor and pays for quality
Lifestyle: Range of ages & incomes, enjoys adventure, design and change
Highest overlap among people who visit lifestyle sub boxes, and also visit fashion & beauty sub boxes (15% overlap).
When we look at YoY growth -> fastest growing opportunity is among people visiting fashion & beauty sub boxes, and also venturing into food & alcohol sub boxes.
=> So what?
Cross-sell / up-sell opportunity among sub box subscribers.
Inform your own product offering (what else is your customer interested in)
Partnership & collaboration opportunities -> delve into more detail in the next chapter..
Collaboration – key to keeping existing customers delighted and strategic way of gaining new audiences.
In this chapter – we look at one sub box provider that uses collaborations successfully to attract new audiences.
Background => Key collaboration each month
November: Birchbox X Vogue => 100 Vogue Beauty Hall of Fame best picks
December: Birchbox X Matthew Williamson => Brit luxury designer clothing & interior
January: Birchbox X Ohh Deer => stationary & gift brand
Note -> Birchbox’s audience size each month is 100,000+
Online population MoM % Change also shown to compare seasonal uplift.
From Oct to Nov, Online Pop visiting vogue sites grew by 6%. Birchbox audience saw even greater uplift of 25%.
From Nov to Dec, Online Pop searching/visiting MW’s site was tiny. Zooming into Birchbox’s audience, this grew by 59%.
From Dec to Jan, Online Pop grew by 3%. Huge uplift in Birchbox audience also searching/visiting Ohh Deer of 267% (most successful box then from a collaboration point of view?)
Side note –
Audience size for each brand varies - Vogue (500K-600K per month), MW (c. 5K per month) and Ohh Deer(c. 30K per month)
So if we were to put actual volume, the difference between months for Vogue is 3,000, for MW is 100 and for Ohh Deer is 2,500
Pre Collaboration – only 1,000 people visited or searched for both sites – demographics for each brand also varied
Birchbox – younger, lower income
Ohh Deer – older, higher income, different geographies
Zooming into the combined audience – Birchbox AND Ohh Deer
Audience size triples pre vs. during (noting that we are also comparing Pre-Collaboration, which is Dec - normally peak, to During-Collaboration, which is Jan typically low period).
So what? This is an example of a successful collaboration – growth in both combined audience and shift in profile (if the strategy was to reach new audiences).
The profile of this audience shifts as we combine the two:
Older
More male (but still female dominated)
Slightly higher proportion in London
Higher personal income