Subscription Boxes and the Benefits of Product Flexibility
It goes without saying that the world today is a very different place than it was a year or two ago. This is true specifically in the world of manufacturing and logistics.
The biggest and most discussed trend in the industry as of late has been how the pandemic has affected logistics, including both air and sea shipments. The challenges presented by the pandemic do present a unique opportunity for subscription boxes.
For sea shipments, ports have been delayed due to the increased demand from shipments overseas. With everyone staying home, consumers have increased their consumption from Pelotons and home gyms, to outdoor furniture and more. This has led to increased congestion in land as well. This increased demand has not only increased the price to sea ship, but has increased the required lead time.
For air shipments, the lack of commercial aircrafts (that historically took 50% of cargo) has led to increased air rates. Throughout the pandemic, this has ranged from 2-4x the rates pre-pandemic.
Is there any Good News? Yes!
As dire as this may seem, this presents a shipping alpha opportunity for the subscription box world. With Peloton, their product(s) are large and heavy. They have to choose between planning further in advance due to the port delays (which has led to customers getting products up to three months late) vs. the cost of air shipping, which is hard to stomach with such a large product. There is no great option. There are companies that are air shipping hot tubs for an additional $1000/ unit!
Subscription boxes, due to the nature of the business, may not be able to stomach the increased cost of air shipping some items. The good news, is that subscription boxes don't have to air ship heavy items. With subscription boxes, there is a degree of product flexibility, as products change from month to month and from season to season.
Whereas if Peloton is choosing to air ship, they have to air ship a bike or treadmill, subscription boxes are able to pivot towards air shipping small and light weight items.
The opportunity to plan very light/ low weight items for air shipping allows subscription boxes to not have to wait for long delays at the port, while simultaneously taking advantage of the fact that low weight/ volume items are economical by air.
Having this product flexibility and choice is something that companies that create the same sku all the time just do not have.
Of course, larger items have a place as well. And for those ones, the pandemic has proven the importance of planning those items out further in advance.
Please feel free to reach out to your Account Manager. We would be happy to share with you our growing list of low weight and low volume item ideas that could be a great fit for your box!
The Procuremint Team