Birchbox was founded in 2010 by two Harvard Business School graduates, and was a pioneer in the subscription economy trend. For a decade, Birchbox has delivered sample beauty products for subscribers to try out on a monthly basis, with the option of purchasing the full-sized products on its website. The company was valued in $485M in 2014. However, it has struggled in the last few years with its business modes. While subscription economy is booming, Birchbox does not make the majority of its revenue from the subscription boxes – its revenue relies heavily on converting beauty box converter into shoppers on its website, and they have not been very successful in doing so. In Feb of 2020, right before the coronavirus pandemic hit US, it was forced to let go 25% of its global staff to cut cost.
However, this changed after the pandemic. Birchbox noticed that as people noticed they were not going to be able to go outside for a while, they became more interested in pampering themselves and shopping online – and Birchbox is right at the intersection of that. Instead of targeting the beauty products enthusiasts, Birchbox noticed a significant uprise in the number of casual beauty customers. These are customers who are not super invested in the beauty industry, but now want to have something to look forward to on a monthly basis. Birchbox reacted fast, and shifted their marketing strategy and content to target this new and rising customer segment, to much success. Going forward, Birchbox is also focusing on sustainable and “clean” beauty, which also appeals better to the casual beauty customers.
Source:
https://www.forbes.com/sites/lelalondon/2020/09/02/has-coronavirus-saved-beauty-box-companies-birchbox/?sh=4c0e10b13848
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