One Way to Maintain a Celeb-Driven Subscription Commerce? Employ a Whole Lot of Celebs
The narrative of the great subscription commerce trend of 2011 to 2012 has gone something like this: ShoeDazzle launches and, with the help of Kim Kardashian, subscriptions explode. Copycat companies pile on, typically with celebrities at the helm like Christina Applegate's FabKids, Jennifer Lopez' Teeology, and BeachMint's various celebrity-endorsed categories. The Honest Company launches with Jessica Alba.
Then half of the sites realize their celebrity can only get them so many subscribers before they need to take a hard look at fundamentals. ShoeDazzle CEO Bill Strauss noted, "If they’re not satisfied... they’re not going to continue to buy, even if Kim goes door-to-door selling."
Eventually churn sets in, and many of the companies, including ShoeDazzle, drop their subscription requirements. We realize that subscription commerce was more of a smoke screen than a clever new business model.
And yet, stuff-in-a-box companies continue to proliferate. One way they're looking to circumvent celeb fatigue is quite counter-intuitive: They're adding more celebrities.
That's the approach of subscription commerce company 12Society, which launched with Nas, Nick Cannon, Michael Strahan, Blake Griffin, Kevin Love and Tim Lincecum two months ago. While it's too early to know whether the more-is-more approach to celebrity co-founders will ward off churn, the company has experienced solid early adoption.
12Society has amassed 5000 subscribers to its monthly box-of-stuff for dudes, generating $200,000 in revenue. Each box costs $39 and includes $125 worth of items, each endorsed by one of 12Society's six co-founders. The first one included Tapatio hot sauce, American Crew grooming products, some credit card watch thing from Rumba, Incase Reflexive headphones and a nosehair trimmer called the "Mangroomer" (thanks, Michael Strahan).
Brands are eager to get their products the boxes because it's a less expensive than a full-on celebrity endorsement, says non-celebrity co-founder Sameer Mehta. He calls the deals "mini-endorsements." The celebrities have equity in the company and get royalties on the sales of the boxes. It's bigger than a one-time endorsement deal since the celebrities are investors in the company, he says. That's led to TV and magazine interview shout-outs from several of the six co-founders, which has driven sign-up with not much in the way of PR.
This isn't Mehta's first startup idea. He sold that one to Mark Cuban, a deals site called Jungle Cents, very early in its development.
12Society reminds me of another company selling boxes of stuff endorsed by celebrities of a different breed. Quarterly Co. delivers a personal gift from one of the company's handpicked "influential contributors." Thus far it looks like those contributors are mostly cool New York Internet and media types (even though it's based in LA). Contributors include Felix Salmon of Reuters, the founders of Wander, the guys from Cool Hunting, the Food52 girls, Behance founder Scott Belsky, the New Yorker's Sasha Frere-Jones, Atlantic's Alexis Madrigal, Maria Popova of Brain Pickings and Alexis Ohanian of Reddit. They're celebrities that only my Internet friends would know. And more importantly: those that know them would love a box of goods hand-picked by any one of 'em.
Quarterly, 12Society, and other sub-commerce companies like FiveFour and Svbscription depend on subscribers being delighted beyond the price they've paid for their surprise box month in and month out. There's a reason grab-bags at county fairs only cost a dollar. You buy it for the element of surprise, not for the actual junk inside. These companies will learn in the coming year whether a monthly surprise--delightful as it may be--is worth $39.