john fetto, senior analyst, hitwise · audience profile: mindset subscription summit 2018 24 “all...

The rise of subscription boxes and the consumers behind themJohn Fetto, Senior Analyst, Hitwise

1Methodology

Industry trends

Audience profiles

Traffic sources

3

2

4

Wrap-up

5

1

Methodology

| 4

Unique data and consumer insightsPowerful combination of scale, depth and quality

Subscription Summit 2018

4 million mobile devices

20 M sites/500 M Searches

8.1 million panelists

60K consumer attributes

Unlimited

Audience

Possibilities &

Reporting

Combinations

|

Hitwise subscription box industry

300 leading sites

Subscription Summit 2018 5

2

Industry trends

|

US subscription box industry

Monthly visits

Subscription Summit 2018 7

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Surpassed 44 million visits in January and March

890%

increase

since 2014

Record: 45.6MM

in January 2017

|

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Surpassed 44 million visits in January and March

US subscription box industry

Monthly visits

Subscription Summit 2018 8

10%: Year-

over-year

growth 2017

vs 2016

3%: Year-

over-year

growth first 4

months of

2018

5%: Year-

over-year

growth Q4

2017

|

US subscription box industry

Quarterly visitors

Subscription Summit 2018 9

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Surpassed 18.5 million visitors in Q1 2018

Actual Projected

65%

increase

since 2016

|

Top subscription sites

Number of visits in April 2018

Subscription Summit 2018 10

1,272,975

1,565,124

1,875,711

1,895,338

2,583,352

2,819,863

3,072,563

3,176,367

3,316,500

4,040,757

GROVE COLLABORATIVE

LOOT CRATE

BIRCHBOX

FABFITFUN

HOME CHEF

DOLLAR SHAVE CLUB

STITCH FIX

HELLO FRESH

BLUE APRON

IPSY

2017

2018

+291%

+122%

+137%

+220%

|

Top subscription sites

Number of visitors in April 2018

Subscription Summit 2018 11

275,190

305,501

326,473

378,426

678,118

702,129

706,663

761,430

819,998

935,599

FABFITFUN

HARRY'S

LOOT CRATE

BIRCHBOX

IPSY

DOLLAR SHAVE CLUB

HOME CHEF

STITCH FIX

HELLO FRESH

BLUE APRON

|

Subscription Box vs Traditional Retail match up

Top subscription sites now on par with major brands (in visits)

Subscription Summit 2018 12

|

Category breakdown

Share of subscription box sites visits/visitors, April 2018

Subscription Summit 2018 13

34%

33%

17%

12%

2% 2%

Food

Beauty

Apparel

Lifestyle

Pets

Kids

25%

37%

20%

12%

3% 3%

Visits Visitors

| 14

Category breakdown

Monthly visits by sub-category, four year trend

Subscription Summit 2018

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Pets Kids Lifestyle Apparel Beauty Food

4 year change:

• Pets: +3,533%

• Apparel: +1,137%

• Lifestyle: +1,116%

• Food: +952%

• Beauty: +519%

• Kids: +288%

1 year change:

• Kids: +24%

• Apparel: +20%

• Pets: +12%

• Lifestyle: +12%

• Food: +8%

• Beauty: -1%

|

825,848/6%

1,249,399/9%

2,583,352/19%

3,176,367/22%

3,316,500/23%

Sunbasket

Graze

Home

Chef

Hello Fresh

Blue Apron

Food box sites: 14.4 million monthly visits/4.3 visitors

Top food sites, April 2018

Subscription Summit 2018 15

+115%

-20%

+37%

-5%

+279%

|

977,970/7%

1,875,711/13%

1,895,338/13%

2,819,863/20%

4,040,757/29%

Harry's

Birchbox

FabFitFun

Dollar

Shave

IPSY

Beauty box sites: 14.1 million monthly visits/6.4 million visitors

Top beauty/grooming sites, April 2018

Subscription Summit 2018 16

-22%

-7%

+120%

-14%

-13%

|

Apparel box sites: 7.1 million monthly visits/3.4 million visitors

Top apparel/accessories sites, April 2018

Subscription Summit 2018 17

471,723 /7%

575,320 /8%

723,571 /10%

808,609 /11%

3,072,563 /43%

Le Tote

Gwynnie

Bee

Bespoke

Post

Dia

Stitch Fix +22%

+65%

+8%

+48%

+220%

|

139,085/3%

193,497 /4%

520,770 /10%

1,272,975 /24%

1,565,124 /29%

Battlbox

Care/of

Mystery Tackle Box

Grove Collaborative

Loot Crate

Lifestyle box sites: 5.3 million monthly visits/2.3 million visitors

Top lifestyle sites, April 2018

Subscription Summit 2018 18

-28%

+191%

+69%

NEW

+43%

|

27,629/3%

31,597 /3%

53,425 /6%

207,950 /22%

633,075 /66%

Meow Box

Kitnip Box

Cat Lady Box

Bully Make

Bark Box

Pet box sites: 960K monthly visits/551K visitors

Top pet sites, April 2018

Subscription Summit 2018 19

-5%

+258%

+7%

-29%

+34%

|

25,443 /3%

39,484 /4%

50,063 /6%

213,819 /24%

441,844 /50%

Owl Crate

The Nick Box

Raddish Kids

Little

Passports

Kiwi Co

Kids box sites: 886K monthly visits/530K visitors

Top kids sites, April 2018

Subscription Summit 2018 20

+258%

+63%

+16%

+236%

+70%

|

Overlap analysis

Where are the biggest cross-sell opportunities?

Subscription Summit 2018 21Icons created by: Marvdrock, Oliviu Stolan and Maria Kislitsina from Noun Project

+7X

+9X

+10X

+8X

+4X

+6X

+5X

Source: Hitwise Q1 2018

+6X

+6X+6X

+6X

+6X

+6X

+6X

+5X

+5X

+5X

+8X

+7X +7X +7X

+7X +7X

+7X

+7X

+4X

+9X

+9X

+9X +10X

3

Audience profiles

|

Who are America’s 18.5 MM subscription box shoppers?

Audience profile: Demographics

Subscription Summit 2018 23

Younger

Millennials

(116 index)

55% Female

(index 107)

College

towns/Hipster

enclaves

College

degree/student

(index 111/115 )

HHI $100K+

(index 108)

No kids

(index 105)

Source: Hitwise Q1 2018

|

“Upscale Clicks”

(index 113)

“I pay attention to

online ratings and

reviews” (index 118)

“Super

Democrats”/“Mild

Republican”

(index 111)

Who are America’s 18.5 MM subscription box shoppers?Audience profile: Mindset

Subscription Summit 2018 24

“All things being

equal, I’m more

likely to buy online

than in store”

(index 112)

“I like when websites

provide product

suggestions based on

what I’ve purchased in

the past” (index 108)

“I tend to spend

long periods of time

in a store browsing

(index 107)“I consider

myself

interested in

the arts” (index

110)

“I sometimes post

reviews online”

(index 117)

“True Foodies”

(index 111)

Source: Hitwise Q1 2018

|

Who are America’s 18.5 MM subscription box shoppers?Where else do they shop?

Subscription Summit 2018 25

Source: Hitwise Q1 2018

|

Who are America’s 18.5 MM subscription box shoppers?Where do they buy?

Subscription Summit 2018 26

58% bought from Amazon during Q1Source: Hitwise Q1 2018

|

Who are Blue Apron’s visitors

What lights their fire?

Subscription Summit 2018 27

Even Younger…

Millennials index:

132

Condo owners

(index 125)

No kids/Never

married

(index 107/112)

“I mostly

stream/download

my entertainment”

(index 122)“I enjoy eating

foreign food;” “I like

to try new drinks”

(index 110/109)

“Innovators”/

“Mavens” (index

110/106)

“Healthy Holistics”

and “Weight

Reformers” (index:

126/114)

Source: Hitwise Q1 2018

|

Blue Apron vs Hello Fresh

“Recipe” search “cookoff”

Subscription Summit 2018 28

Tofu (+234%)

Quiche (+129%)

Sous vide (+127%)

Whole 30 (+391%)

Risotto (+221%)

Easy vegetarian (+184%)

Source: Hitwise Q1 2018

|

2

Traffic sources

|

Traffic drivers: Social

Subscription boxes rely more heavily on social, but not as much as before

Subscription Summit 2018 30

14.0%

8.3%9.3%

7.5%

Subscription boxes Retail 500

2017 2018

|

Traffic drivers: Email

Email drives double share of traffic to subscription box sites

Subscription Summit 2018 31

9.1%

4.5%

9.6%

5.3%

Subscription boxes Retail 500

2017 2018

|

Traffic drivers: Affiliates

Sub-box sites get more traffic from affiliates

Subscription Summit 2018 32

1.6%1.7%

2.8%

1.5%

Subscription boxes Retail 500

2017 2018

|

Traffic drivers: Affiliates

My Subscription Addiction drives about 1/3 of affiliate traffic

Subscription Summit 2018 33

11%

2%

14%

30%

2%

5%

13%

13%

14%

31%

Groupon

My Points

Swagbucks

My Subscription

Addiction

Pinchme.com

2018 2017

|

Traffic drivers: Search

Search still the biggest driver of traffic but less than retail in general

Subscription Summit 2018 34

30.8%

46.0%

31.1%

42.4%

Subscription boxes Retail 500

|

Traffic drivers: Search

1 in every 50 searches to sub-box sites include the word “best” or “review”

Subscription Summit 2018 35

|

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

Traffic drivers: Search

1 in every 50 searches to sub-box sites include the word “review” or “best”

Subscription Summit 2018 36

“Best beauty boxes”“Best meal delivery boxes”

Winter

Holidays

Fourth of

July

Back to

School

|

Traffic drivers: Search

1 in every 400 searches to sub-box sites include the word “cancel”

Subscription Summit 2018 37

|

Traffic drivers: Search

1 in every 400 searches to sub-box sites include the word “cancel”

Subscription Summit 2018 38

Kids Apparel Pets Beauty Lifestyle Food

|

Beauty: 72%

Food: 57%

Lifestyle: 68%

Apparel: 63%

47%

Mobile share of visits

Subscription boxes are ahead of the curve in the shift to mobile

Subscription Summit 2018 39

53%

All sites Sub-box sitesRetail 500

65%

|

2

Wrap up

41

5 Key takeaways

Subscription Summit 2018

1. Personalization is key. Don’t be afraid to ask for info

to help you deliver a more curated experience.

2. Keep things fresh, but offer replenishment sales and

“fan favorites.”

3. Know your audience and grow with them. Find a

niche, but don’t get stuck in it so that you can’t

expand.

4. Differentiate from Amazon!

5. Explore partnerships and affiliations to spread the

word.

6. Think mobile first.

Thank you!

John Fettojfetto@hitwise.com

www.hitwise.com