Birchbox looks to expand their lucrative “try it before you buy it” business model to a physical location that is likely to open in May.
By Betsy Mikel (Contributing Writer, Women 2.0)
Four years ago, Katia Beauchamp and Hayley Barna, former Harvard Business School classmates came up with an idea that would make the makeup counter less intimidating for women — and make money off the cosmetic samples those beauty counters usually give away for free.
In 2010, Birchbox was one of the earlier subscription startups to enter the market. For just $10 a month, customers receive their beauty fix in the form of a small box in the mail. Each Birchbox contains a curated selection of 4-6 beauty items — sample sizes of makeup, fragrances and hair products, to name a few — that are tailored to the preferences customers select when they sign up. If they like the products, customers can buy the full-sized versions through the Birchbox online store.
Birchbox has grown tremendously over the past four years. They reportedly have 800,000 subscribers (which is double the number they had a year ago), added a men’s line and have grown to a team of 250. Over the past four years, the team has shipped nine million boxes.
But Birchbox has their eyes on more of the market beyond the revenue they bring in from the monthly subscriptions. The company wants to develop a more personal relationship with their customers, and they’re starting with a physical location in Manhattan’s SoHo on West Broadway.
Sure, in-store shopping seems to be more and more passé by the minute, and why would Birchbox mess with the good thing they’ve got going when they're raking in so much revenue from those 800,000 subscribers? According to the New York Times, only 30 percent of the company’s business today comes from full-size product sales. Instead, if they end up liking the product in one of their boxes, most customers head to that cosmetic counter that at first was so intimidating. Birchbox subscribers are buying the full-sized products from department stores or beauty stores like Sephora or Ulta.
The 4,500-square-foot Birchbox store will have about 2,000 products for sale (about 150 of the 250 that are available in the online store.) Customers will also be able to build their own Birchbox on the spot for $15. Additionally, another floor will offer classes on skincare and makeup application and beauty services.
While the Birchbox store might be sounding like just another beauty store, that may not be the case. New York Times also reported that “Technology will be at the heart of the experience, with touch screens throughout the store. Customers will be able to answer questions about themselves and pull up product recommendations and customer reviews.”
Part of the store’s design and function is influenced by the learnings Birchbox took away from five pop-up shops they tried out a couple years ago.
“We saw some clues along the way — wow, it’s really powerful to interact with our customers,” co-founder Hayley Barna told the New York Times.
All said, we’re excited to see a female-founded company not only grow so quickly and with so much success, but also dip their toes into trying something new that other subscription services haven’t yet tried. Birchbox already shook up the competitive beauty market with their subscription service, and we hope they can do the same with the innovations they are bringing to this brick and mortar store.
Could Birchbox be the next in big player in bringing their online product to the real world successfully?
Photo via Angie Six / flickr. Betsy Mikel is a freelance copywriter and content strategist who helps brands, businesses and entrepreneurs tell their stories. A journalist at heart, her curiosity drives her to find something new to learn every single day. Follow her on Twitter at @betsym.