Birchbox Realigns Expansion Strategy

Makeup subscription service Birchbox is realigning its business strategy to get shoppers to buy more full-size and full-price products.

Makeup subscription service Birchbox is realigning its business strategy to get shoppers to buy more full-size and full-price products.

"We are not in the business of selling people samples," said Birchbox CEO and Cofounder Katia Beauchamp in an interview with Bloomberg. "That would be a really boring business."

With stiffening competition from other services, which have xeroxed Birchbox's model, the company is now looking to focus more on expanding its physical footprint.

Currently, Birchbox runs one store in SoHo, NY, but soon plans on expanding its footprint to dozens more. The company recently hired Sephora's Philippe Pinatel as its president and chief operating officer and top talent from Juicy Couture Inc. and Apple.

However, Beauchamp said, the company's focus would remain on its online platform. Currently, 50 percent of Birchbox subscribers reportedly go online to buy full-size products.

While in-store sales might help the company fuel its growth in the coming years, its subscription model, which continues to be at the core of its business, might make it an uphill battle for the New York-based company.

"Subscriptions have a lot of issues," Forrester Research Analyst Sucharita Mulpuru told Bloomberg. "They're not huge addressable markets. You're constantly dealing with churn, and you have to find new customers."

Still, Beauchamp says, building its store front footprint might prove to be a key to growing and building longlasting relations with its customers as it gives the company a chance to directly interact with them.

Customers, she said, "want to feel like they're in a relationship with the company, and I feel like that's totally new. We constantly hear from customers that they are going steady with us, breaking up with us, and I think it's exciting, it's a privilege and it's way hard. Every month is opportunity to delight and disappoint."



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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