5 things retailers can learn from Birchbox

Rachel Humphrey, director of PR and strategic partnerships at Birchbox UK shares five ways the subscription retailer has created a whole new way for consumers to buy beauty products both online and in-store.

1. Find your niche

Birchbox was one of the first brands to capitalise on the increasingly popular subscription model of retailing. And when it launched in 2010, less than 2% of beauty was sold online. Its founders realised how inefficient beauty sampling was and wanted to create a new way of attracting new customers to beauty brands.

Nearing a decade later and Humphrey still believes the subscription model has legs. “In 2017 we had a 63% increase in subscribers and we ended the year having shipped 1.5 million boxes to 150,000 customers,” she said.

“People are shopping differently and the subscription industry is just one conversation.”

2. Know your customer

Birchbox has invested a lot of time in getting to know their customer and a few years ago, the beauty retailer learnt it was attracting a very different customer than the typical beauty industry shopper.

“Around 20% of the population is a ‘beauty junkie’ who spends a lot of money on beauty,” explains Humphrey, noting how most beauty retailers have concentrated mainly on this small proportion of the industry. “But the Birchbox customer is very different, call them a ‘casual beauty consumer’ and we target that person in a way that suits them with a box to their home with personalised products so they feel empowered to then buy the full-sized products online.”

3. Think outside the box

Over the last eight years, Birchbox has transformed the way beauty has been sold online. And in 2014, the e-tailer decided to see how its model could transfer to physical retailing, with the launch of its store in NYC. Since then the brand has tested the physical space in the UK and France, and while its main focus is its subscription model, the physical store has also positively impacted its online presence.

For its UK pop-up store in London’s Carnaby Street, Humphrey says this was mainly a brand awareness drive. “We know our opportunity is in subscription, but brand awareness is our biggest barrier.”

The store was designed to be highly “instagrammable” and the press coverage along with organic sharable social traffic led to a direct revenue increase for its online website. In fact, during November 2017 when the UK store opened its doors, online revenue grew 136%.

4. Stand your ground

When launching a UK store, Birchbox decided from the outset that it had to feel different from shopping for beauty elsewhere on the high street, and one way to do this was to merchandise by category rather than brand. Humphrey describes how the brand’s ‘casual beauty consumer’ doesn’t necessarily have a favourite brand of makeup and going into a department store can be overwhelming and not very intuitive because similar products are not grouped together.

But asking brands to fundamentally change the way they have always sold their goods was not an easy conversation: “In the early days with our NYC store, it was tough, but that’s come with our journey and our growth and we’ve proven ourselves with our partnerships,” she says, noting how a massive 22% of consumers who bought a Benefit beauty product from Boots on the high street, first discovered the brand on Birchbox.

“For them it was a very different way of working with a retailer partner, but we stood our ground and that was very important,” adds Humphrey.

“When more and more people in the businesses see the impact Birchbox has had as a retailer partner, they’re open to trialling new things.”

Birchbox Pop-up Store Carnaby Street 2017 from George Malsbury Films on Vimeo.

5. Create content to engage your customer

Humphrey says content is a major part of the Birchbox business model.

“In the early days when we launched we used this mission statement internally – try, learn, buy. That’s always been a major part of our DNA and our content team is a major part of the brand strategy.”

Birchbox provides mini video tutorials for its consumers – “their engagement time is very short, these are not shoppers who are watching YouTube videos all afternoon” – while it sees a lot of conversion from Facebook and Facebook Live.

Later in the year, it will be revealing how it is using AI to further personalise its content to meet the needs of its CRM strategy.

“Personalisation is at the forefront of what we do – whether it’s pick your box design or pick your sample,” she says, explaining that if a hair product is sent out to a customer, Birchbox can use its beauty profile data to show a woman with similar hair using the product in the corresponding tutorial email.

“Our subscribers trust us that we know them really well and we can use that to our advantage.”