Subscription boxes offer companies a treasure trove of data, but only if they know how to use it. For consumers they fulfill a variety of conveniences.
Amazon offers a subscription box service similar to Stitch Fix called Prime Wardrobe, where users pick out clothing, try it on at home, and only keep and pay for what they like, shipping the rest back.
Thread Beast, which launched in April 2015, is a little different. It is a through-the-mail box clothing retailer that aims to provide affordable streetwear to young men.
The company recently made a name for itself based on building personas and using them to target ads and clothing brands to consumers. Now sometimes it will throw something out of the ordinary into the box.
Looking to differentiate itself from other such clothing retailers, the company has been throwing into the box specialty items like wireless speakers.
ThreadBeast is a little different than the usual Stitch Fix model. Size exchanges are accepted when something doesn’t fit, but not when the person doesn’t like an item. Curators use data to predict the type of clothing the consumer loves. Four monthly plans provide a variety of options that range from $55 to $250. Brands include Levis and G-Star.
The company uses data to personalize the items sent to monthly subscribers. Audience segments are created based on color, age, and style preferences as well as weather, trends and physical location. Consumers can opt-out at any time and from certain items.
Uday Singh, ThreadBeast CEO, believes that showing consumers with dreadlocks a variety of baseball hats adds no value to the service.
“The reverse logistics becomes a nightmare when someone wants to return an item,” Singh said, adding that the company ships about 250,000 units monthly.
RBC Capital Markets predicts 40% of apparel sales in the U.S. will occur online by 2023, up from about 30% today. E-commerce now accounts for roughly 20% to 25% of clothing and accessories sales for most retailers and 29% for specialty retailers.
ThreadBeast’s targeting strategy is based on personas and style profiles, focusing on consumers who want the convenience of avoiding the trip to the mall to comb through the racks. It is also built on interests and lookalike campaigns.
Videos and images drive traffic to the ThreadBeast website are based on each persona. Creative might target consumers who typically shop at Tillys and Pacsun, for example.
“We run thousands of versions of the ads at any given time to see what resonates on potential new members,” he said. “We mostly use text ads on existing members.”
The ads run on Google, YouTube, Instagram, and Facebook. The company also runs affiliate advertising, but less so than in the past. Singh says the company also tried Snapchat, but he doesn’t feel it is mature enough yet.
The data provides direction in terms of product lines and the features that ThreadBeast should invest in and send. For example, the company looks at year-over-year trends and also provides insight into new product ideas, such as new brands or categories, as well as offering products other than clothing such as electronics or tickets to a sporting event.