A Marketing Report on Birchbox

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Based in New York City, Birchbox began in 2010 by founders Katia Beauchamp and Hayley Barna. They established Birchbox to assist consumers with the clutter of beauty retail to discover products that actually work for them. Although Birchbox started as a product primarily for women, they extended into men’s products in 2012 with Birchbox Man. Also in 2012, Birchbox purchased JolieBox, based in Paris, increasing their business to France, Spain, and the UK to take the company global and become a leader in the international market in discovery commerce. They now have around 400,000 subscribers.

Birchbox is a monthly beauty subscription service that helps customers (both men and women) discover beauty products that they will love. Along with the monthly subscription service, they also provide a personalized beauty product shop and editor beauty tips and tricks on their website: www.birchbox.com.

Customers sign up online through the website to get delivery of a monthly box filled with prestigious skincare, grooming, beauty and lifestyle samples which have been personally customized for the customer for just $10 a month for the women’s box and $20 for the men’s. Birchbox delivers 30-50 diverse editions of its boxes every month based on a quick survey customers fill out on their skin and hair type, plus what products they would indulge in. Once the survey is complete, customers receive a selection of samples (5-6) each month that Birchbox also personally recommends. They source the samples from both well-known brands as well as new and emerging brands. The women’s subscription box includes samples ranging from makeup to skincare products, as well as lifestyle samples. The men’s subscription box contains high-end male grooming samples as well as lifestyle products like tech accessories or socks.

If the customers like the samples they receive in their monthly beauty box, they can then purchase the full size products directly from the Birchbox Shop on the website. Birchbox offers a generous loyalty program that rewards the customer every time they shop, refer friends, and give feedback on the monthly samples. Customers can exchange their Birchbox Points in order to save money on full size products or gift purchases.

Birchbox’s website also contains a magazine section filled with content such as advice, tips, and tricks from their beauty editors. This original content helps customers get the most out of their samples. Customers can keep up to date with the latest beauty and lifestyle news and get expert tips on the products in their boxes. They show customers how to master techniques and upgrade their daily beauty practices with videos, editorials, and interviews from beauty experts.

Birchbox is aimed at consumers who take pleasure in utilizing the best beauty products, but who don’t feel like having to try too hard to discover them and guarantees to cut out the confusion in buying beauty products in order to send customers what works for them. But even self-described anti-subscription commerce and anti-beauty product consumers have been turned into loyal customers after trying their monthly boxes.

Birchbox suits women and men of all demographics who want to try new products and explore through discovery. Selling strictly online, Birchbox is able to overcome geographical limitations. Birchbox users live in all 50 states with New York, California and Chicago being the biggest markets. Although they mainly target women ages 25 to 39 with annual income of $35-$55k who love beauty products, Birchbox transcends generations. They have customers ranging from as young as 10 years old to as old as 89 years old. While popular in the United States, Birchbox has also begun to expand internationally, acquiring its French clone, JolieBox, which permitted it to move into Spain, France, the UK, and several other markets in Europe.

Birchbox, which was originally intended just for women and beauty addicts, has expanded its reach into new ventures, including a subscription box for men. The high-end male grooming category is a lesser market than the women’s market. Birchbox has customized the “try, learn, buy” model, accommodating both women and men who want to try out new, trendy products and want that elite and insider experience. Birchbox presents an easy, low-cost way for customers to discover beauty products, blending the trial of products with online content and online shopping to make exploration, innovation and the purchase process simpler.

Birchbox is lumped in with subscription commerce sites, but it’s much more. Birchbox is also a direct eCommerce beauty retailer as well as a hub for online beauty content. Customers can purchase Birchbox subscriptions and products from their computers, tablets, or mobile devices. Specifically within the eCommerce market, Birchbox is a subscription business model and describes itself as “discovery commerce”. It competes with other beauty subscription companies like Glossybox, MyGlam, and Goodebox, all which provide customers a way to try new beauty products before they buy.

The benefits of the Birchbox subscription service are that it is curated specifically for each consumer so they are receiving products personalized for them. It’s also convenient. The customer doesn’t have to worry about trying out tons of beauty products and wasting money on products they don’t like and will never use again. They also don’t have to go to a store and try to find someone to help them pick out products. They get products delivered straight to their door with a convenient website that tells them all about their products and tips and tricks for helping customers use them. If they like the product they can purchase the full sized version directly on the website with free shipping. It takes the hassle out of buying beauty products.

Birchbox has provided a huge value to the beauty retail market. The beauty industry – in terms of marketing and retail – had not experienced significant innovation for many years. When it comes to eCommerce, the beauty industry really hasn’t figured it out yet. As a group, beauty has had a hard time bringing consumers online given that the majority of women want to smell, touch, and try the products they want to buy, and they don’t make returns. Online shopping is usually limited to researching and replenishing products customers had previously purchased, not trying new things. In addition, the beauty industry is disjointed and overwhelming to navigate because each category contains thousands of brands. Birchbox better satisfies customer needs compared with other innovations in the market because it exemplifies curation, content, commerce, marketing, and a subscription business, in a global beauty commerce that’s been delayed in the online space. Birchbox does a good job at encouraging women to try new products and offers them an outlet when they make a decision to buy. Their revenue comes from both the subscription service as well as the sales of full sized products on their website.

Birchbox also helps brands get in front of their target consumers. Brands spend a ton of money on marketing and advertising in order to stand out among all of the competition. Birchbox is a low cost way (brands just have to provide the samples) for brands to market to consumers who they know already like beauty products and are ready to buy. This works especially well for smaller brands that do not have the money to spend on advertising or marketing. These smaller brands can also sell their products through Birchbox’s web shop, cutting out the need for their own warehouse and shipping costs. In this aspect, Birchbox provides a whole new avenue for brands to market themselves.

The amount of data Birchbox has on its customers and their beauty preferences is enormous. This allows them to see what new products, brands, and features customers want out of their beauty products. This kind of data and information is invaluable to the beauty industry and will help them to create new products to better fit what consumers want.

Recommendations:

  • Expand its business model beyond beauty and into other areas- clothing, accessories, jewelry, food, home décor, work products, etc
  • Themed boxes- special occasions, holidays, limited edition, organic/all natural, etc
  • Offering an option that’s not subscription- buy when you want or skip a month, etc for a higher price. Some competitors offer this option.
  • Monetize content section of their website with ads

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