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Birchbox Makes Moves Into Physical Retail
Posted: May 28, 2014
Subscription boxes have been a big trend in beauty lately, but are brands and consumers looking to branch out further? Mintel senior analyst Ali Lipson, who specializes in retail and apparel, focused the retail strategy of one of the beauty’s industry biggest subscription box services in her blog post “Birchbox moving into a Big Box.”
Lipson writes that Birchbox “is opening its first store location in New York City” and describes the company’s current business model, which is to cultivate monthly subscribers who receive a curated box of sample-size beauty products each month for a $10 monthly feed. The hope is that the subscribers will then convert to buying full sizes of the selected sample products. “However, the company found many users were in fact buying full-size products—just not from Birchbox, rather turning to other retailers,” Lipson writes.
She continues, “With its new store, the company hopes consumers will discover new products through in-store sampling and in turn buy more products directly from Birchbox. Mintel’s Inspire trend Sense of the Intense discusses how intense physical and sensory experiences give brands and products deeper meaning. Birchbox seeks to do just that with its physical store, bringing their online model to life.”
Additionally, Lipson points out how Birchbox also is looking to provide beauty variety. “According to Mintel's Shopping for Beauty Products report, more than one-third of beauty products consumers buy items to try something new, and the Birchbox store plans to accommodate the masses, offering approximately 2,000 products from nearly 250 brands,” she writes. “The store will have a dedicated space for trying out products including a row of vanities and a ‘build your own Birchbox’ section, allowing shoppers to make their own boxes of samples for $15. This will be a popular option for the 36% of beauty buyers who say they would like more sampling of beauty products when shopping in this category. Furthermore, the store will offer classes on various beauty topics as well as services such as hair styling, aiming to create a more complete experience.”
This new retail location offers another touchpoint opportunity for Birchbox, as well as greater chance for testing, but time will tell if the move is for the best. “Birchbox aims to reach a greater set of consumers through its store presence, while also helping them in finding new products through its emphasis on product sampling,” Lipson concludes.