There’s nothing like the excitement of opening a special gift each month. That’s part of the appeal of subscription boxes, whether they’re for makeup, fashion, books, or even a pet. So it may come as no surprise that the market for subscription boxes has grown considerably in recent years: more than 100% from 2012 to 2017, according to McKinsey & Co. And those boxes have come to be big business—$10 billion or more in 2017. Double that if you include Amazon Prime, according to a related finding from Fuel x McKinsey.
Those numbers reflect what is going on for large subscription boxes such as “the big five”—including the biggest, fashion box Stitch Fix, with three million active clients, and Blue Apron, Dollar Shave Club, Hello Fresh, and TechStyle Fashion Group—but they also reflect the market for the other roughly 3,500 subscription boxes available.
So where do books fit in? Though book boxes are a small piece of the pie, some general subscription boxes, such as the lifestyle standout FabFitFun, can move significant quantities of books—as many as 250,000 copies of a single title, according to one publisher that PW contacted. Many subscription boxes from non–big five retailers, including many dedicated book boxes, fall into the 5,000-to-10,000-customer range, notes Amir Elaguizy, CEO and cofounder of Cratejoy, the self-described “mall of subscription boxes.” One indication that the market for these smaller-circulation boxes is significant and growing, too, was Amazon’s decision to roll out a self-service subscription box marketplace in 2017. Last year, it followed up with a subscription book box of its own for kids, the Prime Book Box.
“Book boxes are our fastest growing category based on the number of consumers that are subscribed, and our second-biggest based on the number of merchants,” Elaguizy says. “The more niche the box, the better they do. You’re starting to see more specialization.”
Although it may be hard to scale a book box subscription to become a Stitch Fix, one advantage of book boxes that Elaguizy sees is their relatively low level of churn. People tend to stay subscribed to book boxes, and it costs 40% less to acquire a customer for them than for other subscription boxes, or roughly $40 per customer, he adds.
“It’s a category where you see a lot of experimentation, especially in children’s and the YA world,” says Elaguizy, who has observed customers going from one box to another and another. “People might cancel an individual box, but they’ll stay in the category.” He estimates that the average book box customer stays with a company for 18 months, which makes a subscription book box sale worth between $400 and $500.
A “Win-Win-Win”
“We are always looking for new channels,” says Patricia Kelly, director of sales, Americas, and general manager, for Lonely Planet. “Everyone’s looking for every opportunity they can find. Shelf space is disappearing in many areas, not just bookstores.” She points to declining book space at airport stores and Urban Outfitters, as well—places that have historically offered strong outlets for publishers, including Lonely Planet, outside traditional bricks-and-mortar bookstores.
But it’s not just about finding shelf space. “For me,” Kelly says, “it’s all about finding a home for a book.” She characterizes subscription book box sales as “significant,” particularly on the kids’ side, for Lonely Planet series such as City Trails and World Sticker books.
Like Elaguizy, Rachel Geiger, executive director of domestic sales at Chronicle Books, is bullish about children’s book boxes—both those associated with bricks-and-mortar bookstores and book box standalones. Although she says that children’s boxes account for a third of the subscription box sales at the press, she finds that “kids’ subscription boxes are emerging as one of the better book boxes for us.” Unlike boxes aimed at adults, “there seems to be an endless demand for new kids’ books,” she notes.
There’s also a seemingly endless amount of segmentation among kids’-focused crates. Companies such as KiwiCo—which has won a Parents’ Choice Gold Medal and an Academics’ Choice Award—offer hands-on science and art projects for newborns to teens, as well as for adults. Little Feminist, for newborns to age nine, is pitched to parents who want to raise “conscious kids” and features strong women and people of color. It shows up on a number of mommy blogs such as Lucie’s List. Little Bookish Wardrobe includes a book, costumes, and activities for ages three to seven and, like many boxes with lots of materials, is on the higher end, at $32.99 per month. Margins, which concentrates on YA novels, is one of several boxes to focus on books from marginalized voices; its founders include YA author Cara Davis and editor, writer, and library professional Adrianne Russell.
Geiger anticipates seeing even more segmentation as the children’s book box category continues to take off.
Videos of unboxing book crates can be a big deal on YouTube and offer publishers nice exposure for their books. But one of the other big marketing advantages for publishers, Geiger notes, is that subscription book boxes offer “a new way to connect with readers at their home.” Book boxes help get out the message of their books to kids who might not see them otherwise, which was the case when the Literati book box featured Matt Lamothe’s This Is How We Do It, on diversity. And book boxes associated with bricks-and-mortar bookstores offer publishers a way to introduce new authors, such as Portland, Ore., author Alison Farrell, whose debut picture book, Cycle City, was part of a recent Boox box from Powell’s Books in Portland.
For Valerie Pierce, director of retail marketing and creative services at Sourcebooks, bookstore subscription boxes in particular offer a “win-win-win” for publishers, bookstores, and readers. “As a publisher,” she says, “we can sell a larger quantity of nonreturnable books to bookstores. And since the booksellers have a loyal group of customers, we know that they’re sending our books to readers who will fall in love with our titles.
“Another great by-product of subscription boxes,” Pierce adds, “are the social posts from readers. If a reader is really excited about their box, they’re likely to share that on Instagram. The social post helps us extend the overall reach of the promotion to that individual’s followers. And it can eventually lead to more sales over time.”
Segmentation and Personalization Rule
Children’s book boxes offer a way for bricks-and-mortar and online booksellers to stand out and compete with Amazon through unique offerings—and, in the case of Literati, an Austin, Tex.–based company focusing on kids up to age nine, on price. Literati’s website clearly states, “We match (or beat) the Amazon List Price.”
Launched in November 2016 by former Google executive Jessica Ewing, Literati is the only kids’ book box to offer books on a returnable basis. She says that when the company began shipping its first boxes in 2017, she was influenced by the fashion subscription box Trunk Club’s try-before-you-buy policy.
Like other book boxes, Literati aims to delight readers through its selections. To make those choices more special, last November it began shipping books recommended by what it calls “great minds.” These include book selections from Melinda Gates (Rosie Revere Engineer), B.J. Novak (Shel Silverstein’s Uncle Shelby’s ABZ Book), Steven Pinker (The 500 Hats of Bartholomew Cubbins), and Sheryl Sandberg (Girls Who Code). The company also has an Illustrators Hall of Fame with Amy June Bates, Joe Blum, and Kathryn Otoshi, among others, whose original art is included in its boxes.
Known for its personalization, OwlCrate focuses on YA. Founded by children’s toy store employees Korrina Ede and Robert Madden in their apartment in Vancouver in 2014, they claim to have introduced the first curated book box with a theme. Together with its newer subscription box—OwlCrate Jr., which launched in 2017 and is aimed at middle graders—OwlCrate has more than 10,000 subscribers. It works with an independent fulfillment house in the U.S., where the majority of its subscribers live. But it has long had an international presence in Canada and beyond, says Ede, who notes that its customer base extends to Kenya, the Philippines, and Saudi Arabia.
OwlCrate only chooses new books for its boxes. “We always pick a new title that’s been published within the last 45 days,” says Ede, who started offering books with exclusive covers at OwlCrate in May 2017. The following January, the company began offering signed books rather than signed book plates—something it hopes to be able to offer to its Jr. customers soon, as well. “The books we include you can’t buy on Amazon,” Ede notes. “People know the value inside the box is more than we charge.”
This year, OwlCrate began branching out beyond monthly subscription boxes by offering limited edition boxes to supplement its regular mailings. Its first were Holly Black’s The Wicked King, Stephanie Garber’s Finale, and V.E. Schwab’s Vengeful. Beyond giving OwlCrate the opportunity to make add-on sales, limited editions give the subscription box company a way to offer customers the chance to pick books that are not necessarily the first book in the series, notes creative director Sally White, who makes all the book selections with Ede. She adds that Jr. will introduce its first special edition soon.
As for picture book boxes, Ede says, “It’s in the back of our minds. We’re very hesitant bringing on a lot of new things. We would need a new team.”
Some book box companies may be small, but have a large reach. That’s the case for Ivy Kids, a five-year-old subscription book box that offers STEM titles and activities to children between the ages of three and eight. Begun by former elementary school teacher and chemical engineer Taseea Cruz in her home in Brooklyn, N.Y., Ivy Kids sends 2,000 boxes per month with a book and a month’s worth of activities—most created by Cruz. The activities include detailed directions to address developmental differences of the recipients. Cruz also offers the option for a sibling add-on subscription for consumables and activities, so that parents can use the boxes with more than one child—and so kids don’t fight when the boxes arrive.
The recipient of a Parents’ Choice Silver Honor Award, Ivy Kids prefers to pick older, award-winning books, often related to life cycles. Some of its most popular offerings include Judy Allen’s Are You a Bee?, Marianne Berkers’s Sea Life books, and Leo Lionni’s Fish Is Fish. “I’m really looking for highly rated content,” says Cruz, who not only reads each book but tests them on her three kids. “When I had the idea for Ivy Kids, I thought, ‘Wouldn’t this be fun for moms at home if they got a box in the mail and everything is included?’ ” As for running a book box on her own, Cruz comments, “I thought chemical engineering was hard. But this is harder.”
Book Boxes from the Bookstore
Bricks-and-mortar children’s booksellers have long excelled at encouraging customers to buy kids’ books as gifts. Book boxes are an extension of that and offer indies another source of revenue. The Reading Bug Box raises personalization to another level by offering a subscription book box with books based on each individual child older than 30 months. “Our idea was to give the personal attention we do in the store,” says Lauren Savage, co-owner of the 11-year-old Reading Bug bookstore in San Carlos, Calif. She sees the subscription box, which she launched in 2015 when sales were flat, as essentially a second store. And like many indies who open a new store, she turned to Kickstarter to raise needed funds. The campaign was so successful that it raised over $10,000—more than double its initial $4,000 goal—to introduce it. The number of customers fluctuates, particularly at the holidays, with a high of 1,600. Her biggest complaint, Savage says, is that “we have too many books.”
Recently, the Reading Bug, which holds daily story times, decided to launch a podcast, Reading Bug Adventures. Savage views the podcast, subscription box, and bricks-and-mortar store as working together, making the Reading Bug “a multimedia platform.” She says that helping customers in the store gives her a good sense of the books that kids want. Publishers advertise books on the podcast that also end up in the book boxes. She sees book boxes as the one area where independent bookstores could compete against each other and, for that reason, emphasizes the need for a niche.
Bethany Beach Books in Bethany Beach, Del., was also an early book box adopter and offered its first box, the Book Drop, in February 2015. “Since we are in a vacation resort town, we are quite seasonal,” says bookstore manager and Book Drop creator Amanda Zirn Hudson. “I decided I wanted to launch a subscription service to allow our summer readers a chance to read what we are reading and recommending all year-round.”
Initially, Hudson broke the store’s YA and middle grade book boxes into three subcategories: romance, adventure, and “a little bit of everything.” She soon decided to select a single title for each category because, she says, “it is difficult to select one fabulous, hidden gem title each month, let alone three.” She prefers not to pick bestsellers that can be found in a big-box store.
In order to keep the price of its kids’ boxes down, the Book Drop features paperbacks. “We decided to opt for a simpler box that any YA or middle grade reader could afford each month, if it wasn’t being gifted to them,” Hudson says. “Most of the time, our readers who are in-store are here on vacation, and therefore have some extra spending money. So we have really great sales in hardcover books in-store.”
Though Hudson says she has seen an influx of new subscription box companies and offerings, she notes, “We continue to see growth in the Book Drop, but it takes a lot of work. You constantly have to be on top of it. You can’t slack for even a month, because you’ll lose subscribers.”
As for the goals of the box, Hudson says that they are the same as for the bookstore: “finding new and diverse voices in literature and spreading the love of books.”
