The proliferation of subscription boxes points to new business models even traditional natural foods retailers should consider.
Direct marketing competition is nothing new to natural foods retailers. But NatureBox puts a new spin on taking a product direct to the consumer.
And it’s attracted major funding for the enterprise.
Perhaps the box model is an idea for traditional natural foods stores, too.
A blend of CPG and subscription box service, NatureBox develops its own healthy snacks that it ships direct to monthly subscribers. The company’s gained attention recently after it raised $8.5 million from investors.
Forbes talked with the co-founder and CEO Gautam Gupta, who told the magazine:
“We wanted to be able to control the customer experience and really create a unique customer experience,” explains Gupta. “And we thought that by creating our own products, we could really deliver to the customer the products we think they would like and aren’t available anywhere else.”
The model allows for nimble response as it grows its line by five to 10 items a month.
It’s able to do so by working with both internal and external teams to develop concepts and formulations, and with independent growers and manufacturers for production. The subscription model allows the company to forecast production volume, which helps minimize the amount of inventory it carries. Finally, because of the direct connection with its customer, NatureBox can sell, test and get feedback about its products in near real time.
Investors look at this as a sea of change in the healthy living category, a model in the changing ecommerce business and perhaps a preview of CPG evolution.
Subscription and sample box services have propagated wildly, featuring everything you can imagine. Many promise wellness products the buyer may later seek in a brick-and-mortar store. Others seek to grow their online sales from the introduction.
Some consumers suffer sample box fatigue, but the model shows no signs of faltering.
So, just as some natural products retailers have taken to adding delivery and CSA models to their retail offerings, perhaps thinking inside the box might be an idea, too. After all, customers already trust your product selections and love to discover new products (even your own private label ones). And the “sample” relationship they will develop is with you, not third e-party.
Have you offered such a program through your store? Please let us know about it.