Bulky, boring and booming: the DTC category subscription services giving Amazon a run for its money

Loo roll: the poster child for supermarket panic-buying as we headed into the first lockdowns of the pandemic in 2020. Stockpiling spiked, shelves were stripped bare, manufacturers pleaded for calm. Brands like Andrex saw supermarket orders double overnight, with 800 delivery trucks sent to stores in a single week in March, up from the typical 490. At its peak, the category was in 149% value growth, according to Nielsen.

While lockdowns are now a distant nightmare, excitement within the category is not over. A slew of online services are seeking to shake up toilet paper shopping habits all over again – not for consumers fearful of getting caught short by coronavirus, but for the convenience of stripping out the boring and bulky buys from their supermarket shop.

“If they choose to buy an individual box, they don’t have to make a trip to the shop and then wrestle an oversized plastic bag of loo rolls home,” explains Chloe Green, marketing chief of Root7, umbrella company of bamboo toilet roll brand Bumboo. “And if they choose to subscribe, it means ‘buy more loo roll’ never appears on their to-do list again, nor will they ever be caught short and need to pop out to the shops.”

It’s not the only – let’s face it, fairly dull – category seeking to take a slice of all the boring bits of the weekly basket. Babyfood, cleaning products and petfood are also being targeted by upstart online specialists.

As Green puts it: “There are so many other things that we could be doing with our time than traipsing round a supermarket to buy everyday items.” And these specialist DTC operators have found clever ways to win customer loyalty despite supermarkets doing all they can to make these items work online.

Their proposition appears to make perfect sense for consumers. And might make a lot of business sense too.

Bumboo is one of a growing number of loo roll only online brands – others include Who Gives A Crap, Naked Sprout and Cheeky Panda – offering bulk buys, with subscriptions a significant slice of sales. The businesses are cleaning up.

“Consumers value the ease, convenience and additional extras they can access through subscriptions”

In the past 12 months, Bumboo has hit revenues of £1.6m, gained more than 30,000 customers, and reached £100,000 in monthly recurring revenue due to automatic billing with an “extremely low” churn rate of less than 2% per month. A new funding round is about to launch so it can expand into the US. Cheeky Panda has raised almost £10m over four crowdfunding rounds from 5,000 investors, and is now seeking another £5m, with the business valued at more than £80m. IPO plans are on hold until markets recover, but the option remains “an attractive long-term plan”.

Players from multiple ‘bulky/boring’ categories are vying to secure other elements of the weekly basket.

“The feedback we get from our community is that really what we are providing is total peace of mind,” says Sophie Baron, founder of babyfood brand Mamamade. “We’re helping to shoulder that mental load of mealtime – the planning, shopping, preparing.”

Like with loo roll, the subscription option is key to the convenience offered – some 70% of Mamamade’s business are repeat orders. A ‘set and forget’ for shopping.

“Our products aren’t necessarily bulky but the fact our customers are able to subscribe and/or buy weeks or more worth of meals at once, plays a big part in the convenience we offer,” Baron says. “In buying Mamamade, parents are able to reduce their “mental load” knowing they can reach for a guilt-free, high-quality, organic meal from their freezer at any time.”

But the sheer weight of products is in many cases a big reason alone to buy them online and via such services versus in person, in stores.

“The benefit is one of convenience,” says Graham Coxell, CEO of Paws, which acquired Ocado Retail’s Fetch brand last year. “With the rising cost of living crisis being at the forefront of pet parents’ minds, we reduce their need to travel and provide products at prices that represent great value when compared to high street stores. When you also consider the benefit of reduced need to lift heavy goods, particularly those less abled, online provides a great, convenient and good value alternative to stores.” Auto-repeat orders make up about 40% of Paws sales.

Some players are hoping to handle all the “boring basics”, like Bother, which offers “heavy household essentials, brought to your door”. Its rivals include Dizzie and The Society Company.

“Lugging bulky items home, whether you have a car or not, is a chore,” explains Bother founder and CEO Doug Morton. “Absolutely, we’re taking the hassle and muscle power out of buying your basics.”

Bother, a generalist offering everything but fresh, has doubled its range in the past three months and plans to double it again in the coming quarter. It hopes shoppers will shop local for their meat and veg, and leverage Bother for everything else.

Bother even claims it is “price competitive with the leading supermarkets”, though most bulky/boring players can’t quite compete on price with the mults, discounters or Amazon. So with a cost of living crisis biting hard, they are doubling down on adding value.

Bother is adding additional layers of convenience to its offering. What it calls its ‘Bother Brain’ uses machine learning to get to pre-empt an individual’s current and future needs “allowing them to replenish their home in a single click” with free next-day delivery. “Already, 45% of the value of all our orders has been accurately predicted by our Bother Brain, helping to reduce the time and effort our customers expend replenishing their homes with the things they need,” Morton says.

Toilet paper players also stress their sustainability credentials. Bumboo – whose sales have grown 46% year on year – plants a tree for every box sold. Who Gives A Crap gives half its profits to charities that install toilets in communities the world over, donating £5.3m to date.

For Paws, orders come with expertise. “We believe the key is to have specialist, pet-led advice linked in with professionally qualified pet nutritionists ensuring all recommendations are right for their pet,” says Coxell. “Retailers who can deliver true personalisation at an individual pet and pet parent level will succeed.”

At Mamamade, users join a sympathetic “community” of 70,000 parents. “The reason they buy from us isn’t just because we’re online but because of the quality of the products and wider support we’re able to offer, which you can’t find as an all-in-one,” says Baron.

Economy and efficiency

There are cost advantages to avoiding fresh produce, in wastage, storage, delivery and above all energy costs.

“Bother delivery costs are far more economical and efficient than traditional grocery delivery because they require no refrigeration, which means more orders per van and also less time per delivery,” explains Morton. “By not selling fresh items, not only do we not need refrigeration units in our vans, but we can also pack our goods into handy boxes meaning we fit at least 20% more orders per van into our deliveries. Our drivers spend a fraction of the time delivering each order at our customers’ homes, and customers aren’t required to book time slots for deliveries or even be at home due to our lack of perishable goods.

“On top of that, our route planning can be significantly more efficient given our monthly order cadence versus weekly for our peers,” he adds.

For Bumboo “a lot of thought” goes into packing as much product in as small a space as possible. Its rolls are longer than those typically found in a supermarket – 30 metres versus 25 metres – and “compactly rolled to minimise transport related carbon emissions”.

“Our rolls are then packed in bespoke cardboard boxes which have no wasted space inside,” Green says.

Most of those competing in the field were born out of or shortly before the pandemic boom in online shopping. “Virtually overnight, parents started looking for a service like Mamamade, and what started from my kitchen as an Instagram business became a community of 20,000 in under a year,” recalls Baron. “Fast-forward to now, almost three years later, and demand keeps rising. We’ve continued to see month-on-month growth, and that’s really because the need to feed children, and to prioritise their nutrition as best possible, doesn’t disappear.”

But drawing consumers to their computers and away from stores is increasingly challenging. According to latest Kantar figures, online’s share of total grocery fell again in the 12 weeks to October, to 11.3%. The decline has been a trend ever since the 14.6% high watermark seen last summer.

“The plateau of online may well be more to do with the legacy cost structures of the incumbents than any signal of what level of convenience consumers would want in their household grocery needs in our opinion,” argues Morton.

“Our unwavering approach to utilising logistical efficiency to provide the simplicity of convenient value to our customers has stood us in good stead, even as a cost of living crisis has caused some other grocery disruption – like rapid grocery – to prove unsustainable,” he adds. There are reasons to be cheerful. Babyfood is flourishing online, long after the pandemic. Brand Organix reports a “permanent shift” in consumer behaviour. “Shoppers can bulk buy with ease, and save the heavy lifting and nuisance,” says Organix commercial director Matt Goddard. Stateside, the DTC petfood market is expected to grow at a compound annual growth rate of 25.2% to 2028 to reach $8.16bn. E-commerce sales will account for 55% of total US petfood sales by 2025, according to a report by Packaged Facts.

“Whilst there has been some impact on the online world due to stores reopening,” says Coxell, “the customer desire for making their informed purchases online, without time pressures associated with in-store purchases, continues in most categories and in particular food.”

Positive trends

Online subscription trends show a potentially positive picture too. Concerns about the rising cost of living have prompted seven in 10 Brits to be more selective about the subscription services they use, according to a Barclaycard survey. Over a third have cancelled at least one subscription because their disposable income has fallen.

But some categories are weathering the storm. Petfood delivery subscriptions are used by 4% of Brits, the same figure as pre-pandemic (after peaking at 11% last year). Cleaning product subscriptions are at 6% – up from 4% in 2020.

“As the rising cost of living continues to squeeze finances, many consumers are re-evaluating their discretionary spending and cutting back on some products and services they no longer deem essential,” says Kirsty Morris, MD of Barclaycard Payments.

“It remains clear, however, that consumers still value the ease, convenience and often additional extras they can access through subscriptions,” she adds.

Green is confident. “Buying online, via a subscription, will only gain popularity,” she says.

Still, the spectre of Amazon looms. According to Mintel, Amazon Prime is the “absolute leader” among the UK paid subscription schemes, with three in 10 Brits members at last count in 2020. Amazon Prime accounts for nearly eight in 10 consumers who have any kind of paid subscription, Mintel says. There is little offered by any of the bulky, boring players that can’t be picked up on its website. But it’s not just Amazon’s might that strikes fear – it’s the fact it failed at a similar play.

“The feedback we get from our community is that really what we are providing is total peace of mind”

Amazon Pantry – which focused on products like bottled water, paper goods and flour, for a flat per box delivery fee – was discontinued last year. And the Amazon Dash Button – a physical button that users pressed to instantly reorder various products – was considered an April Fool at launch and a tech flop ever since.

Nevertheless, the bulky boring players are bullish. “Bulky, boring household items are still sold predominantly through the same channels they have been for 70 years – the supermarkets,” says Morton. “We’re tearing up the rulebook in an industry that still reflects the way our grandparents lived their lives and says nothing about who we are now. It’s time for a change.”