Birchbox is targeting the majority of beauty shoppers who have been traditionally ignored by the beauty industry.

Birchbox curates a beauty subscription box, posting miniature products direct to consumers based on their online beauty profile. It now has one million beauty subscribers, while 35% of its revenue comes from directing consumers back to its website or flagship stores in New York, Paris – and soon to launch London – to buy the full-sized products.

While Birchbox enjoys success from its subscription strategy, MD, Savannah Sachs, explained how the eCommerce subscription company changed its approach in the last couple of years to focus directly on the majority of beauty shoppers, rather than the elite big spenders.

The bigger opportunity

Speaking at the Millennial 2020 event in London earlier this month, she said: "We've just scratched the surface on a much bigger opportunity when we, two years ago, developed a deeper understanding of who our customer is."

She explained how most prestige beauty retailers target a customer that represents less than 20% of the population – the trend-based, socially influenced, high disposable income beauty shopper. "The classic 80/20 rule," said Sachs.

"The beauty industry is catered to them assuming knowledge – this is the type of customer would walk into a department store and not be intimidated and overwhelmed – they know what they want."

Sachs said Birchbox soon realised it had over indexed on this type of customer and wanted to attract the beauty majority "who isn't obsessed with beauty, who is a casual consumer, has some knowledge and is willing to learn".

"She aspires to be the best version of herself, not wanting to cake on makeup," she explained pointing to 70% of the beauty population.

"She's been ignored by beauty retailers but we naturally appeal to her. We can build her confidence in beauty and she then changes her spend, buys new products."

Birchbox has its eyes on London for its next physical store

Data and stores

And this approach is equally appealing to Birchbox's beauty partners who want to get in front of as many potential consumers as possible.

Sach explained how by using data, the e-tailer matches products to a consumer's particular skin or hair type. "Our proprietary algorithm can make up to 50 different box types, which is different from your best friend's," she said. "And if Estee Lauder is only interested in millennial consumers, we can send their products only to under 27s."

She also pointed to how online has driven the design of its stores. "We've learnt to merchandise by category and not by brand," explained Sachs. "No other store is doing that."

She described how a beauty majority customer wanting to buy a new mascara would walk into a store and go to an area where she can test several different brands.

"We're mirroring online purchasing behaviour – that's how you navigate a website. We're transcending that online hierarchy into the store."