2024 Global Digital Shopping index

Holiday Season Presents Key Acquisition Opportunity for Surprise Box Subscriptions

As the holiday season approaches, subscription box companies are going after consumers’ gifting spending.

This time of year presents a valuable opportunity for these companies, many of which offer nice-to-haves rather than necessities — the kind of purchase a consumer may be happy to make for someone they care about but might have difficulty justifying in their day-to-day lives.

Subscription box companies have been targeting this opportunity, with Black Friday and Cyber Monday deals geared toward securing consumers’ holiday season spending. For instance, Japanese snack and candy subscription box Bokksu continues to offer gift cards to consumers who purchase six- or 12-month plans. Atlas Coffee Club has been offering the first bag free. Blue Apron was offering $180 off six boxes.

According to the report “The Credit Economy: How Consumers Are Approaching Holiday Spending and Travel,” a PYMNTS Intelligence and i2c collaboration, spending on gifts will rise moderately compared to last year and average roughly $1,000 across demographics. Plus, the study found, 94% of holiday shoppers are taking action to make sure they don’t have to skimp on gifts.

Subscription boxes tend to be especially popular among Generation Z consumers, whom The Credit Economy study found are disproportionately likely to do at least some of their holiday season shopping online compared to older generations.

The PYMNTS Intelligence report “The Impact of Subscription Models on Consumer Choice,” revealed that 21% of Gen Z consumers prefer the box model of subscriptions. This share is greater than said the same in any other generation, and more than twice the 10% share of baby boomers and seniors.

Granted, after the holiday season bump, many of these consumers may unsubscribe after a short period. Findings featured in the Subscription Commerce Tracker®, created in collaboration with Vindicia, noted that 40% of subscribers ditch their services in less than 90 days, while more than half quit within six months.

Yet if the subscription box can become part of consumers’ day-to-day routines, it has the chance to foster long-term loyalty. The PYMNTS Intelligence study “Decision Guide – How Retail Subscription Merchants Can Win and Retain High LTV Customers,” created in collaboration with sticky.io, revealed that the most loyal 30% of subscribers drive 79% of retail subscription merchants’ revenue.

Still, especially amid the financial challenges pressuring consumers’ budgets, this can be even more difficult than usual.

Customer acquisition has just continued to get more and more competitive over time,” Allison Vigil, president of jewelry subscription service Rocksbox, told PYMNTS in an interview posted in August 2022. “As that acquisition has gotten more challenging, it’s become even more important to retain the customers that we’re working so hard to find.”

As consumers make difficult financial decisions, some of these nice-to-haves may get the axe.

“This change in the economy is forcing people to say, ‘I’d better take a look at my bank statement and see what I am being debited for every month’ and be a [bit] more cost conscious of saving $15 here, $25 there, because it all adds up,” sticky.io President and CEO Brian Bogosian told PYMNTS’ Karen Webster in an interview posted in June 2022.