“All the best services have some sort of subscription model,” Ashish Prashar, Boxed’s head of communications, told Business Insider. “People will pay for that premium service if it’s unique and brings value to their lives.”
The membership — called Boxed Up — will not replace the standard free membership. But it does offer perks, such as free “priority shipping” for orders over $20, as well as 2 percent cash rewards based on what customers spend, price-matching for competitors, and “VIP customer service.”
In the free tier, Boxed customers need to spend $50 to get free shipping.
The giveaways and discounts will be unveiled on a rotating bases, including 15 percent off items in Boxed’s private label, Prince & Spring.
“Boxed Up is the premium offering customers have been asking for,” said Prashar. “They were looking for deeper discounts and unique offerings, and were willing pay a little to get those.”
The Boxed Up membership will cost $49 a year, and there is a 30-day free trial for customers interested in checking it out. Boxed sells bulk items — such as staples, toilet paper and pet food — and delivers to consumers’ front doors.
In 2015, with just 30 employees and three warehouses, Boxed raised $25 million in a Series B round of funding. The investment was led by GGV Capital and Digital Sky Technologies, with participation from Founders Fund, AME Cloud Ventures and Vaizra Investments.
Boxed boasts an average customer order of $100 and an order size of 10 items.
Earlier this month, the company turned down Kroger’s $400 million acquisition offer — Boxed plans to seek a new funding round to stay private. In fact, CEO Chieh Huang’s original strategy has been that the company stay private, then go public in the future.