Birchbox

Decoded Fashion - Weekly Stories - Sephora Beauty Box
Image source: Sephora

Beauty and cosmetics megabrand Sephora is entering the subscription beauty box business, competing with established players such as Birchbox in offering convenient product discovery platforms to beauty fans.

Costing a reasonable $10 and featuring a theme (such as ‘Uncovering the Essentials’), the Play! By Sephora monthly delivery box will introduce five deluxe-sized prestige products as well as samples, application tips and a Play! Pass for one-on-one tutorials in Sephora stores. A themed Spotify playlist will also enrich the experience of product discovery.

The first box will launch with limited distribution in a few top US cities such as Boston in September 2015 before rolling out nationwide in 2016. It will include the Sephora Collection’s Rouge Infusion Lip Stain in Peony, Marc Jacobs’ Beauty Highliner Gel Eye Crayon in Blacquer, Ole Henriksen’s Sheer Transformation Face Crème, Bumble & Bumble Hairdresser’s Invisible Oil, and Glamglow Supercleanse facial cleanser.

Such ventures are disrupting the process of beauty product discovery, allowing consumers to access and try new items ultra-conveniently. The sample boxes also help to establish a fan base for specific products, giving them cult status and fuelling sales. Benefit’s They’re Real mascara and Liz Earle’s Hot Cloth Cleanser are bestsellers on competitor Birchbox, with consumers returning to the site to buy full-sized versions of their introductory samples.

The subscription beauty box business is a strong market. Birchbox (which also charges $10 for its monthly delivery service) has grown exponentially in the five years since it launched with $71.9m in funding. It’s now the leading monthly beauty delivery service in the US and UK.

In the US, similar service Memebox introduces consumers to the Korean beauty routine, which, with thousands of products launching each month and its rigorous 12+ steps, can be daunting to Western consumers.

Guest post Stylus.com by Lisa Payne

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“Subscription-based beauty sample box provider Birchbox, which helps consumers discover new products by shipping them samples by mail, today announced its plans to expand its offline retail footprint to at least two more stores in 2016. The additional retail locations will join the company’s now year-old brick-and-mortar storefront located in Soho, New York, and will be chosen following a summer “road trip” involving pop-up shops aimed at evaluating consumer demand and sales potential in the prospective cities.”

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Decoded Fashion - Fashion Tech Daily - Birchbox

Le-Tote

In the current online marketplace, everyone’s on the hunt for the “next Netflix” – and, as indicated by the latest in start-up investment news, the search doesn’t stop at fashion’s door. Le Tote, a company that allows women to rent out clothing and accessories to rent and return. Operating on a subscription model, the service made tech headlines this week with news that it has acquired substantial new Series A funding worth $8.8 million from Azure Capital Partners (other pitchers in the round included Simon Venture Group, who are running our Decoded Fashion competition at SXSW). With the tech industry clearly ready to back these kinds of ventures, is rental fast replacing retail as the e-commerce model of choice? Or is it just another fast fashion fad?

By all accounts, the services that apparel subscription companies provide are designed to reflect a fast fashion world. Le Tote, for example, sends you a box a month (at $49 a month) filled with 3 items of clothing, 2 accessories and a tote bag. You can wear these for as long as you want (with no late fees!) but can equally move on to the next trend package as soon as you’re ready. You can even buy an item outright if you feel you want to keep it forever. Even better, the picks are styled by an in-house stylist so each package is tailored for your style.

Other subscription services have found success in focussing on this mix-and-match, customisable approach. The original trailblazer in subscription services is undoubtedly beauty company Birchbox, which delivers high-end beauty and lifestyle products at $10/month. Dubbed the leader of ‘Discovery Commerce’ since its launch in 2010, Birchbox also operates in the UK and Europe. Why has this particular beauty queen been so successful? Because they’ve looked beyond the sample-size subscriptions and at the bigger, full-sized picture: the conversion rate to full-size purchases through Birchbox’s e-commerce site is impressively pegged at half of all subscribers.

Also re-inventing retail through rental is US-based Rent The Runway, whose mission professes to have a ‘technology soul.’ An online e-commerce service allowing customers to rent high-end designer apparel and accessories for a fraction of the retail price, the service’s transformative business model has also put them ahead of other copycat companies (see Girl Meets Dress in the UK). One key aspect that gives customers and partners a reason to buy-in is the engineering: in order to help customers find the perfect dress amidst over 60,000 items on the site and app, Rent The Runway leverage a huge amount of fit data. Moreover, a high-speed reverse-logistics system allows for an astonishing (often 1-day) turnaround. In their own words, the company ‘gather an insane amount of data’ – proving that analytics helps customers have the perfect e-commerce experience, as well as helps brands to accrue brand loyalty from younger customers with unique tastes. Put simply: the clothes will certainly look as good at home as they did on your screen.

With many of the leading subscription services still ensconced in tech capitals of the US, time will tell whether there will be similarly disruptive game-changers in the UK. The lesson, overall, might be to stop looking for the ‘Netflix for Fashion’ – in the apparel and accessories subscription model game, tailoring to your market is key.

Reported by Claire Healy

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“Beauty retailer Birchbox just joined the ranks of other formerly online-only businesses (Warby Parker, Rent the Runway and Bonobos) and opened its first permanent store in New York City’s SoHo neighborhood.”

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Decoded Fashion - Fashion Tech Daily - Birchbox
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“Birchbox, the popular ecommerce service for beauty products, announced Monday that it has raised $60 million in funding. The Series B funding round was led by Viking Global Investors and brings Birchbox’s total funding to date to just more than $70 million. Fortune, which broke the news, reports that the latest funding round values Birchbox at around $485 million.”

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Decoded Fashion - Fashion Tech Daily - Birchbox

Decoded Fashion - Fashion Tech Daily - Zappos

 

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