Loot Crate Delivers Mystery Boxes Of Joy

David_Pearson    October 25, 2015


Company: Loot Crate

Industry: Online Retail

Web References: Loot Crate, Facebook, Twitter, YouTube, Instagram, Tumblr, Twitch

Loot Crate is an online retailer with an interesting product.

Each month Loot Crate subscribers receive a mystery box that contains curated items, chosen to be products that their subscribers would likely enjoy.

According to their company description on their website:

“Loot Crate™ was founded in 2012 by an entrepreneurial team of geeks and gamers who thought that online retail was missing the sense of community, interactivity, and mystery we fell in love with at shows like PAX and Comic-Con.”

Both PAX (Penny Arcade Expo) and Comic-Con appeal primarily to a fans of comic books, video and board games, anime, science fiction and horror movies.

Supply Chain Management

Each month, Loot Crate selects an overall theme, for example “Time”, and works with their partners to choose products that fit the theme.

Loot Crate’s partnerships include exclusive access to popular franchises including Star Wars, DC Comics and Minecraft.

These products are then packaged together and shipped to customers from a centralized warehouse.

The combined retail value of the items in the box exceeds the subscription cost, but customers do not get to choose what they receive.

The advantage of this approach is that inventory management does not rely on shipping items piecemeal as customers order them, however the success of the business relies on overcoming two challenges:

  1. How do you know what your customers want?
  2. How do you gain customers if they don’t know what they are getting?

Social Media play a role in solving each of those challenges.

How do you know what your customers want?

Loot Crate was conceived by Chris Davis and fleshed out into an operating business with 60+ initial subscribers over a 54 hour period during the LA Startup Weekend entrepreneur convention in 2012.

Chris and co-founder Matthew Arevalo had a head-start because they themselves are Loot Crate’s target market.

By choosing items that interest themselves, and seeing what is popular at the conventions they attend, they were able to satisfy their early subscription adopters.

As Loot Crate grew, they were able to adopt a more sustainable curation model by  partnering up with influencers and interacting with their subscribers.

Says Matthew Arevalo:

It is curated by not only the team here but some of the influencers and other people in the industry that they work with.  Obviously Social media is important for every business.  They need to be listening, they need to be interacting but in our particular case it is even more vitally important because it is our primary means of being able to interact with our audience and promote our service.

The use of influencers is interesting, as it is a way of keeping on top of trends in the community to help avoid personal bias.

According to Influencer Analysis,

An influencer is an individual who has above-average impact on a specific niche process.

Influencers are normal people, who are often connected to key roles of media outlets, consumer groups, industry associations or community tribes.

Such individuals are not simply marketing tools, but social relationship assets.

Loot Crate also builds their own community to engage in discussion with their subscribers where they encourage comments, critiques, questions, and suggestions.


Knowing that their commercial audience is very socially connected, Loot Crate engages themselves in the conversation with the result of becoming a trusted supplier and even celebrated within the community.

Loot Crate has an active social media presence on Facebook, Twitter, YouTube, Instagram, Tumblr, and even, Twitch

By having the confidence in their product and encouraging feedback both positive and negative, they are able to quickly address and fix any concerns about their service or the products they choose to include while betting that the community response would be overwhelmingly positive.

Which brings us to…

How do you gain customers if they don’t know what they are getting?

By integrating themselves with the “geek” community so well, Loot Crate have created their own fan base and become the major player in the subscription service market.

In addition to positive word of mouth on social media from existing customers, Loot Crate benefits from the Unboxing Video trend.

Unboxing Videos are where customers upload videos to social media of their reactions while unpacking consumer items.

One in five consumers1 report that they’ve actually watched an unboxing video, according to Google Consumer Surveys.

Obviously, a mystery box generates a lot of interest, the YouTube video below has over a million views.

Additionally, Loot Crate provides content to the “geek” community to build their own enticing fan base and build anticipation around the themes of each month.

For example: Curated Spotify Playlists:

and Podcasts:

All of this results in an incredible word of mouth dynamic over social media where if you belong to the “geek and gaming” community, you may feel out of the conversation if you don’t subscribe or at least pay attention to Loot Crate.

The most recent subscription numbers are pegged at “over 400,000” while in 2014 Global Toy News reported that subscription rates were growing at 20% per month.


What can you learn from Loot Crate?

Loot Crate is an interesting business to study since their success relies solely on trust that is built primarily over social media.  Their customers do not know what products they will receive for their money.

Even if your business does not follow a similar subscription format, Loot Crate did some interesting things with Social Media that you should consider.

Talk to your customers

By engaging in meaningful conversations over social media, you will know what your customers are thinking so you can anticipate demand and to identify and address problems early.

Engage influencers

Identify and involve social media influencers as partners.  Do not consider this relationship as simply marketing, but as a continued discussion about how your business can meet the needs and even drive your market audience.

Encourage sharing

Encourage your customers to share their purchases on social media as a marketing tool and to gain valuable feedback on who your customers are and how they feel about your products.  Engage these customers directly and promote their content on social media.

Create content

Maintaining an active social media presence can build a fanbase for your company where customers routinely seek out your posts and thoughts on hot topics within your industry.

You can even take this to the next level by uploading your own videos and podcasts to provide useful or fun content for your customer base.


Submitted By: David Pearson

To contact the author of this entry please email: davidwallacepearson@gmail.com

If you have concerns as to the accuracy of anything posted on this site please send your concerns to Peter Carr, Programme Director, Social Media for Business Performance.