Brandless unveils a subscription, but it’s no match for Prime Pantry.

WHAT HAPPENED: Brandless, which sells $3 essentials, is offering subscription plans at a variety of frequencies, including a $36 yearly membership with free shipping.

Why it matters

  • Brandless came onto the scene in 2017, selling essential products devoid of the typical brand tax. Almost all of the company’s approximately 400 SKUs are $3, with shipping at a flat $5 (it’s free for orders over $39). However, Brandless is neither a prominent competitor in any of the categories in which it sells, nor can it boast about customer retention. Only 20% of first-time Brandless shoppers in Q4 2017 returned in Q1 2018, and the percentage fell to 13% by Q4 2018. The subscription service, which can be weekly, monthly, biannually, or at the customer’s discretion, may help remedy these numbers by helping form consumption habits around shopping at Brandless.
  • This tactic makes sense for a brand predicated on essentials, though many other retailers already offer bundles. It’s unlikely, for example, that an Amazon Prime member, who is already paying $119 a year for free shipping among other benefits including Prime Pantry, will now pivot to Brandless for its household and grocery items. Right now, Brandless offers far fewer SKUs than those included in Prime Pantry, though it hopes to expand its product assortment to about 800 items by the end of 2019. Still, as a fully private-label brand, Brandless does raise the question of whether Amazon will create a private-label-only CPG subscription once it’s built up a large enough roster of owned brands.