Abstract: Meghan Casserly’s article examines the success of Birchbox, a member based monthly subscription box. Their vision was clear and had a win-win for both brands and consumers. Users would benefit from trying out products that were either too obscure or too costly to purchase in the full-size version to be tried by the average consumer. This would give beauty product lovers a chance to try before they bought and review for others. Monthly subscription boxes, like Birchbox, have changed the way companies market and the way consumers buy. Some of the important numbers: Currently 50% of all subscribers are making regular full size purchases on the site and that, which surpassed the numbers they had predicted. According to Birchbox, 15% of all E-commerce orders come from non-subscribers, which Beauchamp says is “a testament to the educational content on the site as well as Birchbox-exclusive products.”
If I haven’t said this enough times already, the most efficient marketing channel for beauty products currently is social media. Millions of people use it to research product reviews, photos, and how-tos. With accessibility to reviews and tutorials online, beauty brands that don’t have a large social media engagement, will not likely succeed. Subscription boxes are a new, disruptive innovation from an old industry concept: try it before you buy it. Before the Internet, social media and other technological advancements, companies had to invest in costly, time-consuming focus groups and surveys to determine what consumers wanted and purchased. Now with web analytics, they can reach their market quickly and with the correct products.
I love the last line of this article: “Birchbox is marketing, media, analytics and retailer all rolled into one.” These monthly subscription boxes have changed the way companies are marketing as well as the way consumers are buying. When registering for Birchbox, shoppers are prompted to complete an initial profile survey. Each month, members receive a customized selection of samples from various beauty brands based on this profile. Membership is $10 a month and you can cancel at anytime. These boxes can include brand new products, current products with updated colors or formulas, and best sellers. Because of the detailed survey subscribers are required to take when registering, Brichbox can help brands target specific products to the right subscribers. This creates an outlet for brands to market their products to niche markets. If the subscriber likes to try various lip colors, he or she will end up with more lip products in their box. Subscribers can retake the survey if they are looking for something else.
Where does big data come in besides the ability to segment and customize products? Conversion rates. Birchbox uses conversion as one of their main measurers of success. For example, Stila Cosmetics sent a sample of one of their products to 7% of Birchbox subscribers based on their beauty profiles (the survey). The product saw an 11.2% conversion rate into a full sized purchase. It may not seem like a lot, but in this industry, that is strong number given how many SKUs a brand usually has. I like the idea of companies using these subscription boxes as outlets to market their products. It shows the innovation within the industry and how analytics can help customize who brands want to target.