BIRCHBOX

Presented By :
Shivani Singhal (20/174) Mohit Jain Akansha jain

Most of us know Birchbox.

Birchbox delivers beauty and lifestyle samples to your door for $10/month.

Hayley Barna and Katia Beauchamp are the founders.

They met at Harvard.

Birchbox has become one of the most popular

subscription-in-a-box services in the world.

Birchbox is not a small company anymore

k
paying subscribers

12 60 164 k

million
venture capital money

full-time employees

likes

We believe that Birchboxs performance was driven by its perfect execution of the subscription model

Whats Birchbox story?

Subscriptions in different categories already existed on the market

XIXth century Traditional categories

Magazine and newspaper subscriptions Telcoms and TV Software as a service

2007 Introduction to apparel

Shoedazzle disrupted the market by selling new pair of shoes in subscription for $39.90 Shoedazzle raised $60M in funding

2010 Expansion to other categories

Copycats of Shoedazzle started to appear on the market (JustFab) The model has spread to other categories, e.g. male essentials (Manpacks)

Birchbox twisted subscription model

Katia Beuchamp Every woman wishes she had a friend who lived in New York and she had an access to the editors closet. That was the customer side of the inspiration

Value to the customer

Ability to discover new products and trial them before buying Surprise effect Personal curation

&

Value to the brand

Control over samples distribution (who receives the samples) Ability to collect feedback Additional distribution channel

and did 3 things right

Product

Community

Operations

Cosmetic products is a cluttered industry with a wide variety of suppliers. Therefore it was a perfect choice for a subscription discovery service.

Haley and Katia quickly understood that their product has potential for virality and developed tools to nurture it.

Both founders were introduced to MVP product idea early on and continued with that approach.

Two big questions before launching

Would consumers pay for samples?

Would brands work with us continuously?

Birchbox started as perfectly lean startup

Hypothetical moves

Test
2010 2 months tests 8 participating brands 200 customers Magento-based website

Growth
2010-2012 10/27/10 Birchbox receives Seed funding $1.4M 8/17/11 Birchbox receives Series A funding $10.5M Full-time employee base grows to 50

Future
2012+ Expansion to other product categories (Birchbox has its male subscription in beta and tests lifestyle categories) Geographical expansion beyond US Strategic deals with cosmetic shops, corporations (Birchbox as a perk)

1. The product

Birchbox chose perfect industry for a discovery service

Market Share in Global Sales (2007) Almost 50% of all 12.7%

Procter & Gamble Co L'Oreal Group

cosmetics sales are made

by the companies from the long-tail This leads to great product variety and a lot customer choice Frequent new product releases

47.9%

10.1%
7.1%

Unilever Group
Colgate-Palmolive Co Estee Lauder Cos Inc Avon Products Inc

4.0%
3.9% 3.3%

Beiersdorf AG
Johnson & Johnson Inc Shiseido Co Ltd Kao Corp

2.5% 2.6%

2.8%

3.1%

Others

Source: Global Insight available at:http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=4561

Birchbox resembles a present and its products are nicely wrapped

Samples are reclosable and reusable and from all accross categories (skincare, haircare, fragnance)

Products are curated based on personal profile and come from top cosmetics brands

Popular:

Niche:

Selected brands

2. Community

Birchbox engages a lot in community discussions

Birchbox magazine featuring articles, videos, blog, trend and how-to tutorials - content that is valuable for the target audience

Very active social media accounts, with over 165 000 Facebook followers

Thousands of video testimonials, discussions and opinion sharing on various services

3. Operations

Birchbox relied on analytics and was growing steadily together with its two revenue streams

Analytical approach

Sustainability

Double-headed revenue

BIRCHBOX

Analytics + testing examples: adding lifestyle samples to Birchbox, initial tests with 200 customers

Low fidelity MVP (WordPress based website with shopping cart pluging)

E-commerce & affiliate programs

Subscriptions

Slowly growing employee base