Innovative Retailer – Birchbox

Brought to you by Retail Insider and PCMS Group

Name: BirchBox

The Place: Head quartered in New York because, um, that’s where the early adopting cool people live but it’s mainly an online outfit which operates in numerous countries and is now definitely in the UK too.

The Story: Every now and again this column likes to give a shout out to a company that basically invented a ‘thing’ that we now just assume was always there in the ether. And that’s right where we’re headed with this one.

And what might this great invention be? It’s a thing of beauty. Or rather it’s a box of beauty. In fact it’s a monthly Birchbox of beauty. Did you see what I did there?

Yes, it took forever. Do you mean that they were pioneers of the subscription model for beauty products coupled with an e-commerce platform? Well, I preferred my version but yes.

Now can you tell the story properly please: Back in 2010 two ambitious young thrusters from the Harvard Business School (where else!)…

Seriously those professors should negotiate deals with all the entrepreneurs they taught who now run multi-million dollar enterprises! Tell me about it. Anyway, Katia Beauchamp and Hayley Barna thought there might be a market in women who are not beauty fanatics, too busy to endlessly browse the department store aisles, but who nonetheless are interested enough in experimenting with new stuff at home.

And? And guess what there was. And the idea was that customers would then trade up to buy a full-sized version after trying the mini samples and use Birchbox’s e-commerce platform to do that. Leading to their mantra of ‘Try, learn, buy’.

Like it: Or as Savannah Sachs, MD of Birchbox UK, would put it – they provide ‘how to’ content and a path to purchase.

Just a quick interjection – is Savannah by any chance from Harvard Business School? Yes.

Thought so. Anyway brands must love them: Brands DO love them. Imagine, being able to go to a one of them and say ‘good morning, we have one million subscribers, would you like them to try your product and then easily be able to buy it via our shop?’

No brainer: Although actually at the beginning of the journey when they were unknown, it was an uphill struggle along the lines of ‘website, schwebsite. We already sell in Macy’s you know’.

And who does Birchbox work with now? Around 200 brands from major labels like Estee Lauder and Bobbi Brown right over to little independents. Sachs says that being able to find great French brands and showcase them in the US and vice versa for US companies to Europe is a big part of their success with customers. For brand-owners Birchbox offers them cross-channel digital marketing campaigns, which supports the whole sampling business.

Now excuse my cynicism, but how might one measure the success of such campaigns? Simples. For example, customers buying the Benefit brand in Boots were asked how they had come across the brand – 22% said it was through Birchbox. Result. But guess what?

Can’t. What is it? Of all the European countries that Birchbox operates in, the UK is the fastest growing. A whopping 125% growth in 2016 and 160,000+ subscribers.

Well, hello…The e-commerce side has also grown very healthily year-on-year too, with full-size revenues accounting for 35% of sales…pretty good, no? Especially as Birchbox is a recent arrival in the UK and there was very little previous awareness of them.

Have we hit peak Birchbox yet? Far from it. Sachs feels there is a huge potential on full-size purchasing still to be had. Customers stay with the box for around nine months on average before progressing into purchasing only those products they want at full-size.

I feel we are about to get on to data retention: We certainly are. When you sign up to Birchbox you fill in the beauty profile and then every month you will leave feedback on what you liked and didn’t allowing the company to continually refine which five samples you are sent in your box. This defines which brands’ digital campaigns you are involved with – should you turn out to be a high luxury kind of gal or a discoverer of indie products babe.

Can you be a bit of both? S’pose. But I know you will have probing questions about who shares the data/pays for what etc. Haven’t you?

Umm: So this is how that works for Birchbox. For brand campaigns the brand will supply the samples for the boxes free and Birchbox will share the feedback, reviews, and aggregate trends with the client. And of course Birchbox pays for any full-size products that a subscriber goes on to buy from its site.

So if it’s all going so swimmingly then what is left to conquer? Wash your mouth out. Never let it be said that Birchbox made one great innovation and now rests on its laurels.

Personally I never thought that… Bring on – the pop-up store and its totally different layout.

I knew it!! They are going to open shops: Calm down. They already have outlets in Paris and New York last Christmas they opened a store in Carnaby Street in conjunction with YourStudio, which featured a gift wrapping station, pick and mix station and a wishing tree where customers could record GIFs on the theme of ‘Share the love’ and put a wish on the tree.

Sweet. What was the deal on the products? 100 of the best sellers across the whole range together in one place. But, wait for it, not presented by brand as in all department stores. But by product type.

That is genius: Totally. Sometimes the simplest changes are the most intuitive. So if you go in and know you wish to buy a lipstick – all the lipsticks are together in one place.

WHY does no-one else do that? I know!!! It must be working because they have extended the pop-up to March.

I think we should just leave it there – and exit to the sound of women cheering: Agreed.

 

PCMS is a global provider of IT software and services for the retail industry. PCMS offers a full-range of integrated commerce solutions across selling touch points and also provides turnkey managed services and cloud hosting. Its client list includes John Lewis, Marks & Spencer, Waitrose, Whole Foods, as well as Walgreens in the US and fashion brands including Prada and Ferragamo across Europe

 

 

 

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