Subscription-based commerce services like Birchbox and BarkBox can meet individualized (if sometimes quirky) consumer needs by providing curated product samples, such as cosmetics or dog treats. For just about any interest you can find, though, there's probably a subscription service waiting to ship items to your mailbox, including razors, fishing gear, dive-bar T-shirts, underwear, and even feminine products. But when giant corporations get in on the latest retail fad, does that mean it's an idea whose time has come, or is it the moment when it's jumped the shark?
General Mills (NYSE:GIS) is the latest company to launch a subscription service with its debut of nibblr, a box of four small snacks shipped right to your door on a weekly, biweekly, or monthly basis, all for less than $6 each. It follows other corporations that are dabbling in the fad, including Target, Amazon.com, and even Wal-Mart, which actually had two services, the social media service Shopycat and the recently closed Goodies that was testing the mailbox snack service General Mills is exploring.
Snacks must be an especially ripe opportunity, because Graze.com, which is majority-owned by private equity firm Carlyle Group, has been selling snacks by mail in the U.K. for five years through its service and recently said it wanted to make a big splash here in the U.S., too. General Mills will have its work cut out for it then, since Graze says it has 55,000 U.S. customers and is adding 1,000 more every day.
The cereal maker grew the subscription plan out of its business development division 301 that focuses on food tech and emerging food brands. Named in recognition of the original Pillsbury A Mill, which was located at 301 Main St. in Minneapolis, the incubator site was created in 2012 with the purpose of accelerating General Mills' product development outside of its primary brands by partnering with emerging businesses. One of its first innovations was the bottled Pillsbury Pancake Batter that you store in the refrigerator and pour onto the griddle.
While those working on the General Mills subscription service feel they're making history with nibblr, it's really derivative of other similar curated sites and suggests the concept may be finally running its course. As previously noted, Wal-Mart already closed down its snack service, and while that may have been due more to it being an experimental idea to see what consumer data could be gleaned and punched into Wal-Mart's Social Genome project, had it been a runaway success, it's hard to believe the retailer would have ended the program after just a year.
A subscription service might lend itself to the business plan for selling esoteric or hard-to-find items such as Mystery Tackle Box's fishing lures and tackle items, but snacks that you can grab at any grocery store hardly seem worthy of the effort, let alone the expense. General Mills may feel it's on to something big here, but that could just be the shark ready to swallow it.
Tell me in the comments section below if you think subscription commerce projects like nibblr or Amazon's "Subscribe and Save" services are the future of retailing, or just the latest fad about to run its course.
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.