subscription services

The Newest Fashion Trend? Subscription-based Shopping

By Rieva Lesonsky

Subscription services have been a hit with consumers for a while now (Birchbox, for instance). But just how popular are they? Wildly—particularly in the apparel business, according to The NPD Group, a leading global information company. In fact, NPD’s online receipt mining service, Checkout TrackingSM E-commerce, shows Stitch Fix and Amazon’s Prime Wardrobe rank in the top 10 online apparel retailers last year.

Marshal Cohen, chief industry analyst, at The NPD Group says, “We have entered a new world of retail where the traditional leaders are faced with unconventional channel competition, and subscription services are the newest player.” Cohen attributes part of the success of these services to the “personalized approach” to shopping they bring to the consumer.

The NPD Groups says there’s a lot of room for growth in the market. In a survey it conducted, 15% of consumers have already ordered subscription boxes, and 14% haven’t ordered yet, but plan to. Plus, 35% didn’t even know what these subscription services were, showing there’s a lot of the market yet to penetrate.

Though NPD says the industry is “still in its infancy,” it points out how its consumer reach is on the upswing. Three of the industry players (Stitch Fix, Trunk Club and Le Tote) claim about 5% of online shoppers’ business—and the annual spend per consumer is $170.

The apparel industry is huge—annual sales top $217 billion. Cohen believes the subscription model will “change the face” of fashion retail because it delivers “innovation, personalization and convenience.”

If this intrigues you, try to find a niche that hasn’t yet been exploited—especially one Amazon isn’t exploring.