Old Navy Subscription Boxes

Gap is selling subscription boxes for kids through Old Navy, after a successful run with baby clothes

• Gap Inc. is launching another subscription box service through Old Navy.
• The Old Navy Superbox is a quarterly subscription for kids ages 5 through 12.
• The boxes include six items and retail for $69.99.

Lauren Thomas | @laurenthomasx3

Source: Gap

Old Navy’s new subscription box.

Gap Inc. is launching another subscription box service — this time through its less-expensive Old Navy nameplate.

Just last month, Gap's baby division was seen ramping up its own subscription offering, but only for a limited time.

Now, right in time for the holidays, Old Navy is selling a subscription box for kids, called Superbox.

Similar to babyGap's Outfit Box, the Old Navy Superbox is a quarterly subscription for kids ages 5 through 12. The boxes include six items and retail for $69.99, with more than $100 worth of clothes, according to Gap.

The service is being marketed as a giftable option for shoppers, where customers are able to personalize the boxes without making too many selections. After choosing a size and gender, for example, shoppers simply pick a style — options include "preppy," "sporty," "cool" or "classic." From there, Gap does the curating.

Shoppers can also select a "surprise me" option, which Gap said has been highly popular among shoppers of its baby division. It adds a fun and mysterious element — like opening presents on Christmas Day — to the process.

In the early testing of babyGap's Outfit Box, Gap found low average return rates, a draw of new customers to the brand, and high customer retention from the first to the second box, a spokeswoman for the company told CNBC. From here, Gap said it will continue to glean insights about its customers from future product launches.

Subscription boxes offer companies like Gap a treasure trove of data on consumer shopping behavior, likes and dislikes. The business model also offers companies a predictable source of revenue, granted shoppers don't cancel their subscriptions.

"We have entered a new world of retail where the traditional leaders are faced with unconventional channel competition, and subscription services are the newest player," Marshal Cohen, an analyst with NPD Group, said in an industry report earlier this year.

"There is a great deal of room to grow within the subscription model, and the competitive field will continue to expand as online retailers develop subscription services and options for auto-replenishment of fashion basics," he added.

NPD Group estimated that 35 percent of consumers "don't even know" what subscription services are. Only 15 percent of consumers have ordered subscription boxes, while another 14 percent haven't yet ordered them but plan to, the firm found.

Just last month, Stitch Fix, a pioneer of the apparel subscription business, filed for its initial public offering. The IPO will test investors' reception to a new breed of online shopping companies.

Meantime, Amazon is working on its own subscription box service — although not exclusively for kids, like Gap's — called Prime Wardrobe.