Apparel retailer Old Navy has launched a quarterly subscription outfit box for children this week.
The box, called the “Superbox,” contains six apparel items for $69.99 that, in total, retail for at least $100. Shipping and returns are free. The subscription service is similar to parent company Gap Inc.’s babyGap outfit box, which is a quarterly subscription service for baby clothes that launched in May.
When a shopper signs up for the Superbox, she selects her child’s size, gender and style, which includes preppy, sporty and cool for boys; and classic, sporty and trendy for girls. A shopper can also choose for Old Navy to surprise the shopper, which was babyGap’s most popular option and “one that has tested well for Old Navy in early consumer testing,” a Gap spokeswoman says without revealing specifics.
The retailer believes the boxes can help it test new ways to connect with shoppers, she says. Old Navy is letting shoppers know about the Superbox via its website and email marketing, the spokeswoman says.
From the retailer’s babyGap outfit box test, 76% of shoppers kept all of the items in their box, which the retailer says is a low average return rate. Plus, 91% of shoppers who received one box signed up for a second box, says the spokeswoman. She added that the overall outfit box test is small and declined to share sales numbers.
Another benefit is that the subscription service reaches new customers as well as those who haven’t shopped with the retailer in awhile. Gap’s spokeswoman says 35% of the outfit box customers were either lapsed customers, meaning they haven’t made a purchase in more than one year, or new customers.
“We are hoping for similar trends for Old Navy with the launch,” the spokeswoman says. Gap is No. 24 in the Internet Retailer 2017 Top 1000.
A new study from data management platform 1010data finds that more consumers are gravitating toward retailers that offer clothing subscription services at the detriment of department stores. 1010data uses consumer spending and tracking data of both online and offline purchases that represents millions of consumers for its methodology.
90% of consumers who buy subscription outfit boxes also shop at department stores in the third quarter, which is a down from 93% in Q3 2016, and 95% in 2016’s first quarter. The report finds department store shoppers that also subscribe to subscription boxes has grown to 14% in the third quarter 2017 from 13% in Q3 2016 and 10% in 2016’s first quarter.
Between the first quarter of 2016 and the third quarter, sales from subscription services Stitch Fix (No. 134 in the Top 1000) and Le Tote Inc. (No. 677) have all increased at least 38%, while sales from Trunk Club (owned by Nordstrom Inc., No. 17) has decreased 39% and total department store sales (online and in stores) has decreased 6%, 1010data finds.
The study also finds:
- Stitch Fix has the highest share of the clothing subscription market with 84% of sales in the third quarter.
- Trunk Club’s average order size is $340, Stitch Fix is $130 and Le Tote is $57. (Le Tote’s business model is subscription clothing rental, but also allows shoppers to purchase the items.)
- Only 7% of clothing box subscribers have bought from more than one clothing subscription service.