21 December 2014
“Try, Learn, Buy. Beauty by Subscription” One of the most exciting things in a child’s life has to be running to his or her stocking on Christmas day, sitting down crossed-legged on the floor and hurriedly dumping out the contents, eager to see all of the little lovingly placed tokens inside. The same enthusiasm that children feel at that moment is comparative to the feeling that I get when my monthly Birchbox arrives in the mail. Like little elves in Santa’s workshop, Birchbox employees are busy viewing customer profiles, carefully choosing goodies to place in colorful boxes, and furiously prepping them for shipping. For this four year-old start-up company, business is booming at a rapid rate. With the explosive increase of hundreds of various subscription box companies in the U.S., Birchbox finds its niche in delivering monthly beauty and lifestyle products to its customers. Founded in September 2010, New York City-based subscription box service company, Birchbox (namesake related to birch trees growing as a family) was an idea originated by Harvard Business school classmates Hayley Barna and Katia Beauchamp. The concept came to them when one of Hayley’s best friends, a Conde Nast beauty editor, provided her with popular beauty product samples on regular basis. The young women asked themselves why cosmetic companies tend to give out very little samples with only the hope that their customers would like the product. It was at that moment that Hayley and Katia were inspired to start a company based on a business platform called discovery commerce. Robert Moskowitz, a business writer for Intuit, defines discovery commerce as “the practice of selling a regular subscription to a bundle of products that you choose for the customer” (QuickBooks). In simpler terms, the customer receives the shipment and ‘discovers’ products that may have been previously unknown to consumer. Both co-founders connected with eleven large and small scale investors and were given $1.4 million in seed capital to start up their business, as well as negotiated with few high-end beauty brand companies, such as NARS and Kiehl’s to give them samples and help with first round small group customer testing (Gatto). It was then that Birchbox’s concept went from an idea on paper into physical online promotion and distribution. The premise of Birchbox’s company concept in 2010 was to assist the female consumer in discovering higher-end beauty and lifestyle products, along with helping their brand partners market and test products. The idea is that every sample is tailored to each individual, via a profile that each subscriber would fill out upon enrolling. The box arrives in the mail at the beginning of the month (for a $10/month fee); the consumer smells, touches, and uses the samples and is able to learn about the products on the Birchbox website. If a sample was enjoyed, the tester could review the editorial about that product and purchase it (free of shipping cost) in a full-size version, on Birchbox’s website as well. February 2014 Birchbox. Photo Credit: Leapfrogs and Lipgloss blog Jumping ahead to 2014, the principle and concepts are still the same, but with additional product lines and marketing strategies that evolved the business. In 2012, Birchbox added subscriptions for men ($20/month) that include grooming products, gadgets, and accessories. A few months following the launch of Birchbox Man, Birchbox Home was added to box subscription options, which consists of various entertaining essentials. The Birchbox website now includes an online magazine format with blogs, training videos for product use, newsletters, and tip guides. The company regularly emails special kickbacks/discounts, offers free shipping on all orders, utilizes points systems for reviews and purchases, and recommends personalized boxes to each consumer.
So what is so different about this subscription box company? A