The subscription box and meal kit sectors have undergone a number of challenges in 2018. But boxes for children represent one area that seems to be thriving. Many players in this sector are expanding their product arrays, maintaining strong and growing subscriber bases, and/or attracting continued influxes of investment funding. Meanwhile, new competitors—some formidable—are entering the ring.
The energy is coming from all three of the major participant groups:
- Independent kids’ specialists. Kidbox, which has focused on curated collections of clothing culled from 130 brand partners, launched three private label kids’ brands this fall. And Yumble, a healthy meal kit for kids, received a new round of funding in September from Sonoma Brands and several other venture capitalists, earmarked for new product development and expansion nationally.
- Generalist box marketers. Stitch Fix, the personal styling box for women and men, introduced Stitch Fix Kids with a back-to-school 2018 box. The service focuses on kids aged two to 12, with each shipment including eight to 12 fashion items plus surprises to engage the children in the opening process.
- Retailers. In February, Target launched a Cat & Jack box containing six to seven baby apparel items plus a gift, all tied to its private label kids brand, with items featured in the box before they launch in stores. Separately, Amazon began a test of a book box for children up to age 12 in May, and by August had expanded its availability to all Prime members.
The subscription box model makes sense in the kids’ space. Parents are busy and looking for convenience. Kids can choose the types of products they like, upping the chances that they will use the items they receive each month or quarter, and they often love the element of surprise associated with opening the box. Children also go through products quickly as they grow and their interests change, making their parents more likely to stick with a subscription program long-term. This may help marketers overcome the retention challenge that has plagued boxes for older consumers.
Not all of these examples are associated with licensed products, but licensing is certainly a possibility in the children’s box segment. Some of the brands Kidbox works with, for example, include Disney Baby, Jessica Simpson, and DKNY, all of which oversee licensing efforts for kids’ products.
Of course not all subscription box ventures for kids will succeed. Gap has been a big player in this sector lately, launching its BabyGap Outfit box in May 2017, an Old Navy-branded kids’ subscription program in November 2017, and a BabyGap Bedtime Box in April 2018. On its corporate blog and in press interviews, Gap reported high retention rates and low returns on the BabyGap Outfit box, but in September of this year it discontinued all three ventures, explaining at the time that results were positive but that it was “pausing” the program to focus on other initiatives.
A reminder: Raugust Communications’ monthly e-newsletter will go out tomorrow, Tuesday, October 16. The Licensing Trend of the Month will highlight how eco-friendly licensing initiatives are gaining traction, while the Datapoint research spotlight will highlight the scope of licensed capsule collections. If you are not yet a subscriber to this free publication, you can sign up here.
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