Will Monthly Style Subscription Services Ever Make Money?


ShoeDazzle

You’ve heard about them all — Trunk Club, BeachMint, Bespoke Post.  These members-only sites offer minutely varied versions of monthly product clubs (though Trunk Club differs in that subscribers can order whenever they want).  With celebs at the helm — or, in the case of Bespoke Post, a men’s magazine — the sites intend to appeal via niche, often self-produced product lines.  The thing is, The Wall Street Journal reports, so far, that’s just not profitable.

ShoeDazzle was the first of-the-month club to forgo the model.

The paper reports that Trunk Club, for instance, has 15,000 subscribers, has raised $11 million, but hasn’t yet made any money (the site is only two years old, for what that’s worth).  BeachMint, meanwhile, operates six different sites, has $80 million in venture capital, and has likewise yet to turn a profit.  We’re also big fans of Birchbox, the monthly beauty sample site.  However, even with $11 million in capital, the founders won’t reveal whether the site is profitable yet.

Yet it’s not for lack of appeal — most of these monthly subscription sites have members numbering in the thousands (pretty good, considering almost none of them are more than two years old) and are well-publicized.  Is it possible the subscription model just doesn’t work?  Much as we’re reluctant to say this, perhaps the field needs to take a cue from Kim Kardashian.  The reality star is the face of the first of these such sites to begin as an of-the-month service and nix the idea.  In adjusting its business model, ShoeDazzle abandoned the order-once-a-month rule, but kept other earmarks of the subscription service, like assessing members’ taste via online quizzes, and recommending a monthly batch of products.

That might be the key — those personalized recommendations set the sites apart from run of the mill e-tail, but allow customers a little more purchasing freedom.  ShoeDazzle’s founders have already launched a second site, Teeology, that follows in this vein (and they got J. Lo to front it).  Going forward, consumer freedom to buy, combined with personalized service and a celebrity face, seems like the pony to bet on when it comes to members-only niche online retail.


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