Birchbox has built solid partnerships with the leading brands in beauty who advertise their product by paying to put their samples in the Birchboxes, which are delivered to subscribers for the cost of $10 each month. Launched in 2010, Birchbox now has more than 800,000 subscribers and the company has grown to more than 250 employees globally. Fortune estimates that Birchbox is generating at least $125 million in revenue per year. They must be doing something right. Here we talk about the inspiration for the Birchbox idea, and how the company is using Big Data to drive its business and create a personalized shopping experience for its customers.
Where Did The Birchbox Idea Come From?
Overwhelmed by the Sephora experience, Katia Beauchamp, and Hayley Brana, co-founders of Birchbox, were inspired to find a solution to the problem many beauty enthusiasts face – too much selection. What if you had a friend who was a beauty expert, who was able to recommend products for you based on your personal style, colorings and preferences? That’s where the idea started according to their interview with Inc. Hayley Brana’s best friend, Mollie Chen actually was a beauty editor and always recommended the best in beauty products to Brana, which went onto inspire Birchbox’s positioning of delivering the right products for the customer. Beauchamp, had worked at Estee Lauder in college, and realized that samples near the cash register were nice but didn’t exactly translate to sales for companies.
Recognizing there was a real void in terms of women’s beauty retail online, Beauchamp explained to Mashable: “We came up with this idea of a subscription business where we were leverage brands’ samples that they were already creating and getting them in the hands of a more qualified consumer. Creating an efficient marketplace was the vision, but focusing on delight for the customer, as well. So efficiency plus surprise and delight — we were excited by the intersection of both.”
The Elevator Pitch
As noted on The Next Women, Birchbox had a well defined brand: “Launched in 2010, Birchbox is the discovery commerce platform redefining the retail process by offering consumers a personalized way to discover, sample, shop and learn about the best products and brands available. Birchbox members have first-touch experiences with products each month and access to educational content to help them get the most out of their products.”
Getting The Big Brands On Board
In an interview with Racked, Beauchamp explained that cold emailing is what got them connecting with big brands in the beauty world: “I liked to do the cold email. Neither of us had beauty background but one really great thing going was that we were students so we’d send out a dozen emails to our favorite brands. The ask was really simple, because we just told them the idea and asked for advice. Then we recognized we had a good idea and we were timing it really well because [beauty companies] were thinking about content, commerce, and the beauty community online. It wasn’t the absolute easiest thing but when the ask was simplified, we got yeses quickly and we built the website.”
The Launch Of Birchbox
Birchbox launched in September 2010, with 660 members, recruited through word of mouth. An initial e-mail to 40 friends for a beta test in March 2010 generated a waiting list of some 3,000, Beauchamp says. Their first hire was Barna’s beauty editor friend, who oversees Birchbox’s content, which includes a beauty trends blog.
A month after its launch, Birchbox closed a $1.4 million seed round. Investors included First Round and Accel Partners. And then there’s the support of big beauty brands, who give free samples to Birchbox in exchange for data about customer purchasing behavior.
Big Data Translates To Great Consumer Marketing
Birchbox uses big data when they launch a new service or offering, and when they launched Birchbox Man they used both behavioral and survey data. After surveying subscribers, Birchbox discovered that there was a demand for a selection of products catered to men and after careful analysis and review of a Limited Edition Birchbox Man release in November 2011, the company decided to pursue a subscription delivery service for men in April 2012. Birchbox has continued to use survey and behavioral data to improve its offerings to work with vendors to deliver products customers are interested in. Birchbox VP of Marketing, Deena Bahri explains that data has been incremental in the growth, strategy and success of Birchbox: “We use it to make important company decisions, and use it to guide us towards creating the best possible new products for our customers”.
Discover Birchbox for yourself, and sign up for their monthly subscription here.