Building a Subscription Box Brand Around a Social Mission – Shop.org ’18
A couple of years ago, Miki Berardelli met the co-founder of Kidbox, Inc., Haim Dabah. He was in the process of launching the new subscript box brand for children and was looking for a CEO to run the company. “He had me at hello,” says Berardelli during her Shop.org session. It didn’t take much to convince her that she was the right person to fill the position. Every season, Kidbox delivers curated, name-brand outfits for newborn babies to 14-year-old kids. Each box comes with tops, bottoms, accessories, and fun surprises.
“It’s always been imperative to me that I’m working for a brand or a company that I relate to, that I am a customer of,” says Berardelli. At the time Dabah approached her about the CEO position, she was a busy working mom and a senior leader at a major brand. After learning about Kidbox, she thought how great this product would have been for her kids when they were younger.
To use the online subscription box service, a parent and their child must complete a style profile on the Kidbox site, which asks things like what’s your kid’s personality, what do they like or dislike, and what type of activities do they like to do. Based on the kid’s answers a personalized box is curated just for them. The stylists add a personal touch to each box based on the child’s style profile.
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Kidbox was founded with a social mission at its core. For every Kidbox purchased, the company delivers a new outfit to a child in need through one of four charities they partner with. These are typically children in foster care, military families, or families who lost their homes due to natural disasters. At checkout, the customer is prompted to choose which charity they would like to donate to. All the clothes donated are brand new with tags still on. Berardelli says, “The impact this has on their sense of confidence and dignity is life changing.”
Other brands, such as Patagonia and Warby Parker, follow a similar social mission model. However, is this model of doing good, good for business?
“Absolutely,” answers Berardelli. “I don’t think it’s imperative for a business to be successful. I think it has to be done in a very authentic way, and it has to be done from the beginning. Trying to retrofit an established brand into a social mission can be difficult.” The Kidbox team has found that this type of business model resonates with their customers, especially millennials. Since its launch two years ago, Kidbox tripled the business year-over-year, and the Facebook page has over one million followers.
Early on, Facebook was a large part of building the brand and acquiring new customers. This fostered a community around the brand and allowed Kidbox to grow its customer base through word-of-mouth. Now the team is actively diversifying their marketing efforts beyond Facebook. “Once they experience it once or twice, they stay with us season over season, so our retention numbers are really exciting,” says Berardelli. Additionally, the team has donated $8.5 million worth of clothing to children in need. It’s a big undertaking since they fulfill the donations through their own inventory, but Berardelli adds that “it’s worth it.”
Kidbox’s social mission is prominent on the site, and the team makes sure the messaging stays at the forefront of everything they do. Recently, they launched their second Kids Board of Directors—yes, a board of directors comprised of children. Their first Kids Board of Directors actually launched before establishing their real board of directors comprised of adults. The chosen kids all partake in philanthropic activities in their communities, so this has given the brand a lot of momentum. It also provides them with a constant loop of product feedback from the children.
When you curate a subscription box, how much should come from data and how much from “the human touch?” For Kidbox, it’s split right down the middle. The design team is developing their own exclusive brand of clothing and merchants are buying products from their partners (they partner with over 135 brands)—that’s the human element. Beradeli and her team rely on these partnerships with brands like Adidas, Levi’s, Puma, and many more to provide a variety of clothes. The data comes from customers filling out the questionnaire, and the answers are matched up against the product catalog to create a personalized box. No two boxes are alike unless the parents request it (often happens with twins). The human stylists put their touch on the box, so it’s “truly the marriage of both,” says Berardelli.
With the development of its clothing brand, Kidbox is now a technology, fulfillment, and manufacturing company. For long-term sustainability, Berardelli believes this is key in differentiating themselves from their competitors. “People ask me often about sustainable growth, and I always say, well, I can’t finish that sentence without talking about defensible utility. I think you really need to know what it is that you’re doing that’s unique and differentiated, and building our own brands was very much a part of that,” states Berardelli.
Typically, brands and retailers develop collections based on trends in Europe, then these styles are seen on the runways by merchants and other designers. Merchants interpret the styles and manufacture their versions to deliver to their customers. Kidbox turned this model upside down and, instead, relies on its customer data to determine what they should design. The team considers how many sporty girls they have, or how many preppy boys. It’s data like this that drives their collections, not the latest trends in Europe.
Subscription boxes are a disruptive industry. So, if you’re partnering with traditional retailers, how you do reassure them that this business model benefits what they are doing? Berardelli says that Kidbox, and similar subscription boxes, acts as a vehicle for brand discovery. Through the subscription box, customers find these new brands they never heard of or never thought to try. Once the users realize how much they love them, it’s common for them to shop for these brands offline at retail stores.
The subscription business model is still a relatively new concept for many consumers. Brands will need to educate their consumers on why a subscription is a great option. Not only does it usually save them time and money, but they also get the positive experience of being pleasantly surprised each month. If you’d like to continue the subscription box conversation, please feel free to reach out to the Blue Acorn iCi team here.
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