Subscription E-Commerce Player Cravebox Counts Impressions For Retail ROI

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"Discovery" and "curation" have become big buzzwords for e-commerce start-ups, as flash sales and daily deals-based social shopping reach the saturation point for many consumers. Brands like Birchbox, PopSugar and the year-old Cravebox are trying to entice consumers with a subscription-based model that sends consumers sample products in the hopes of connecting brands and shoppers in a more targeted way.

Last March, Cravebox was spun out of blog network SheSpeaks. Its CEO, Kitty Kolding, was previously head of another social marketing company called House Party.

The holiday season may be make-or-break for a number of companies in this increasingly crowded e-commerce category. In a bid to set itself apart and back up its curatorial selectiveness, in order to be featured in “Cravebox,” a brand receives a five-part promotional sequence that accompanies the shipments to ensure that the brands are reaching at least a million people and delivering a minimum of 25 to 40 million impressions, even if the shipment is less than 10,000 boxes. We spoke with Kolding about the idea of using impressions as a measurement of e-commerce ROI.

AdExchanger: What is Cravebox and why are these subscription-based “deal of the month” clubs so hot right now?

KITTY KOLDING: Cravebox is a discovery service, so our goal as a company is to bring very targeted consumers together with brands using these themed box shipments. We do five to 10 completely separate shipments every month and the shipments are themed around activities or interests or occasions that are relevant to the consumers we're talking to. We'll do the Dog Lover's Cravebox and we did Back to School and we did Summer Barbeque. Following our recent Ultimate Thanksgiving box, we're now doing Hot Holiday Gifts.

There’s a value in having paid subscribers when you send targeted items to them. For one thing, there’s an obvious opt-in, marketing aspect. Subscribers pay between $10 and $15 per month, so it's not a lot of money, but for us it counts as a qualifier. The reason we have them pay is because these are promotions, these are marketing programs from the brand and we want to be sure we've got truly engaged consumers and not, frankly speaking, “freebie seekers” just trying to get their hands on some groovy free stuff. The boxes themselves are beautiful and gift-like, they feel curated and very special. Our goal is to make very powerful and long-lasting introductions between the five or six items in the box and that particular consumer. And that connection between consumers and new items – the idea of discovery – is best done through the subscription model.

How do you promote the boxes to begin with?

For each shipment, we have curators that are in the market designing these box “experiences.” We launch a 30-day promotion around each shipment when it's ready to go out to the public. It kind of takes the shape of an hourglass — the idea is at the top; we're out promoting to lots of consumers and getting lots of people interested to see if they may want to get the box. If they want to get it, they go to a landing page, learn about it and enter a drawing basically to win a spot in that shipment.

We're big believers in the idea of scarcity. We use that notion very much to our advantage, since we always have way more consumers who want the boxes than we have quantities available. That scarcity allows us to utilize game mechanics very deliberately.  It increases the intensity and velocity of the marketing and promotion behind the program significantly.

What do you mean by “game mechanics?”

It’s all about how we target the consumer through the collection of data that is shared with us. In the first layer of the mechanics, the consumer says, “Oh, I want to get that coffee lovers box. I want to enter the drawing.”  To enter the drawing, they fill out a questionnaire. Through that, we gather a bunch of data from them. We collect that data over a week.

Then when we're done collecting it, we look at the entrant pool and we do two things. We pull anybody out that's not the right demo for that shipment. So, for the Back to School box, we pulled anybody out that did not have kids between the age of five and 12. From the group that remained we picked the people that are the most active and the most social and those are the people that if we've got 5,000 boxes, we pick 5,000 from that group, they are already qualified demographically and those are the people we ship the boxes to. That's where the hourglass is kind of at the tightest in the center.

As soon as we ship those boxes, we launch the rest of the promotion, where we do a lot of additional game mechanics. We launch a blog contest. We launch a Twitter party. We do a bunch of work on Facebook.  We do Pinterest contests and Instagram contests and all kinds of work with consumer-generated video. Our goal is to basically give those consumers who got the box ways and reasons to systematically talk about the products and their experience. A lot of them will organically do that anyway, say by simply telling friends directly or posting about it on Facebook.

From my point of view, these are big promotions for brands, so we want to be sure that they have every opportunity possible to tell lots and lots of people about the products they get. We want to give them every possible option to share their experience because our goal is to make a shipment of 5,000 boxes meaningfully reach a million or more consumers. That's the kind of the math that goes on with the program.

When the program is done, we create this really nice post-program report because again, brands are really paying us to be in these programs and so we want to create a great experience, find the right consumer, ship them this fabulous box that makes a powerful introduction and we want to promote the heck out of it using social.  We spend three weeks doing that so that we can create this awesome report that we send over to the brands to say, “Here's how this program performed for you.”  They can readily compare it to any other sort of tactics or initiatives they may have in the market.

How do you measure performance?

The things that we measure most extensively are reach and impression results, so we use third-party tools like Simply Measured to track across all these different social platforms to quantify those results and match that to a marketer’s stated objectives. We measure engagement very extensively. We define engagement in the form of time spent with the brands in the box. One of the things that we're able to do well is cut through all the clutter in the marketplace and create a memorable connection between the five or six items in the box and the brands.

We find that these consumers will spend somewhere between 45 and 75 minutes on day one with the items in the box. The behavior is, they get the box, they take it someplace by themselves, they unwrap each item, they look through them, they start reading all the material, they go online and start posting about what they got and how they like it. That all goes on for an extended period of time.

The fourth area that we spend a lot of time in terms of measurement around is the idea of increasing “brand consideration.” We look at five measures for brand consideration: awareness, product knowledge, favorability, intent to recommend and intent to purchase.

We want to show definitively, from before the boxes arrive to after, how we move the needle with particular consumers. That involves an extensive amount of consumer surveys. We ask the consumers to evaluate a bunch of things before and after, and we do a brand consideration lift analysis, which includes a directory of all the blogger coverage, plus a sentiment analysis, so the marketers can understand the tone and tenor of the social conversations that are going on around their products.

Retargeting has become fairly important to general e-commerce players in the last few years. Is this method compatible with Cravebox’s subscription-based profile?

It could certainly work. But we’re not doing any retargeting now. That said, let me answer that in a roundabout way. When we first started doing this earlier this year, we were promoting these programs to our own community of consumers and having a lot of success. We sold the programs to lots of big brands, Unilever, Johnson & Johnson and Kraft, and all the big players you'd really want to be doing business with. The first part of our strategy was simply to get the brands using the platform.

The next piece was to engage a bunch of media partnerships because we want to be able to reach lots of different consumers. We want to be able to hit pretty much any target demographics that a brand is seeking to engage. We have a big relationship with Time Inc. The idea there is we promote the availability so we have the [Time Inc. owned] Cooking Light Cravebox. We promote the availability of that box, we promote it to our community but most importantly we promote it on the Cookinglight.com digital real estate, using social of course, to get people interested in that box and see if they want to try and get it.

Those ads appear on Cooking Light’s website, and I think the next layer will be to use some retargeting to sort of let those ads persist and follow people around the web as they continue to visit different locations. So retargeting is definitely in our future. We haven't had to pull it off yet because we're getting such good pull-through at this point through other methods. The next couple of pillars that we're working on will be focused on marketing efforts in entertainment. We just launched a book club program and we have all the big publishing houses lining up to work with us to launch new authors or new books from existing authors. We're also talking with some big folks, ABC Family and CNN, and people like that, to promote some of their programming.  Once those programs become more established and start using display advertising in some form, you can expect that we’ll explore how to apply retargeting more deeply.

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