In 2010, Katia Beauchamp and Hayley Barna, college friends from Harvard, launched a business called Birchbox. For $10 a month, subscribers would receive a box of sample-sized, high-end cosmetics and toiletries delivered via U.S. Mail. At the time, the concept was puzzling to some of their peers. Why would women pay to get a mystery box full of tiny beauty items they didn’t specifically ask for?
Pay they have, however. As of April 2012, the company has over 100,000 paid subscribers, and employs approximately 60 at its New York office (Taylor, 2012). According to Beauchamp, Birchbox’smtremendous growth over the past two years can be credited to that modern-day word-of-mouth, social media. “We like to say we’re at the intersection of where glossy meets grassroots,” said Beauchamp.
Why It Works: Sampling and Sales
Beauchamp calls the concept “discovery commerce” (Taylor, 2012). By sending people products they haven’t exactly asked for, and likely have not tried before, they are relying on the quality of the product, as well as the “fun factor,” to inspire subscribers to continue their subscription.
“The beauty industry is so huge, it can be overwhelming,” said Beauchamp (Taylor, 2012). “We’re cutting through the clutter, choosing the very best options from the thousands out there for you to try. We’re helping people find what they didn’t know they wanted.”
With the sampling concept, Birchbox is cutting through the clutter of beauty marketing itself, too. L’Oreal, which holds about 10 percent of the market, spends $2.1 billion on marketing a year, largely through traditional channels such as print and television (Taylor, 2012). Estee Lauder, second to L’Oreal with about 4 percent of the market, spends $80 million. But instead of spending millions to promote specific products or shopping on their Web site, Birchbox is actually getting women to pay to be marketed to, which speaks to the strength of both the product samples and the Birchbox experience. It’s brilliant! Brilliant!
Beauchamp, Barna and the Birchbox marketing team haven’t been content to simply hope a consumer loves a product sample enough to visit their Web site and purchase a $30 bottle of shampoo. Birchbox relies upon additional reminders and enticements to close the loop and, ultimately, close the sale.
Before the box is shipped, subscribers receive an e-mail letting them know “Your Birchbox is on its way!” along with previews of the products inside. Each box is customized to the recipient’s hair and skin type, as well as coloring, so paying subscribers aren’t getting a box full of products that won’t work for them.
When the box arrives, samples are often grouped thematically, for example, “Winter Pampering” or “Pool Party.” Detailed descriptions and instructions for each product are included in the box, which is attractively wrapped and tied with a pink ribbon. Samplers are directed to the Web site to find out more ways to use each product, read blogs, or watch related videos featuring celebrities or how-to demonstrations (Bosker, 2012).
Finally, e-mails are also sent a few days after the box’s arrival, offering special discounts on products inside, as well as again reminding subscribers about the entertaining and informative editorial and videos on birchbox.com.
All of this is working. Half of Birchbox subscribers have converted into customers of its e-commerce site (Taylor, 2012). That’s 50,000 customers who are paying full-size prices after paying $10 per month just for the sample box.
Interestingly, Birchbox also offers more samples as incentives to buy. “Get two additional samples with any $25 purchase!” implores a sidebar ad on the Web site (birchbox.com, 2012). And the sample-buy, sample-buy cycle continues.
The Future of Discovery Marketing
The highly successful Birchbox concept of paying for mail-delivered samples has given rise to a number of copycats. Recently, popular fitness Web site muscleandfitness.com launched a similar endeavor, titled the “Supplement Sampling Program.” For $135 per year, fitness enthusiasts can subscribe and receive a shoebox-sized package of protein powders, vitamins, nutrition bars and other training aids (muscleandfitness.com, 2012). In addition, subscribers receive a discount at the muscleandfitness.com store, further incentivizing larger purchases. They also receive free shipping and free magazines, as well as other special “subscribers-only” discounts, which add perceived value.
Nearly everyone looking for a little surprise in the mail is likely to find a subscription sampling service that suits their tastes. Beyond Muscle & Fitness, which is aimed at a more male, hardcore athlete demographic, other sample box companies include HealthySurprise (healthy snacks), Citrus Lane (baby and toddler products), Foodzie (artisan foods). Prices vary, but most run from $10 per month to about $25 (healthysurprise.com, 2012; citruslane.com, 2012; foodzie.com, 2012).
One company, LoveWithFood, puts a twist on their offering by appealing to the human desire to do a good deed. For $10 per month, subscribers can enjoy gourmet snack samples, such as chipotle-smoked almonds, and also know that they have helped feed a hungry American through a donation to Feed America/Share Our Strength (lovewithfood.com, 2012).
Beauchamp and Barna’s startup has spurred an entirely new business model for e-commerce companies, and it doesn’t appear they will be going away anytime soon. Americans are, if the success of these “discovery marketing” companies is any indicator, very happy to pay to be marketed to, as long as that marketing includes fun surprises in the mail.