Founded in 2010, Birchbox is a flat monthly fee subscription service that offers its customers six specially selected curated beauty products. CEO Katia Beauchamp and co-founder Hayley Barna were initially having a lot of problems with convincing brands to join their program.
Katia remembers how it was: “The story I always remember is going in to talk to brands and them saying you know, great idea but you’re too small. We just have a lot of other things to do, so come back when you have 10,000 subscribers. It was just really challenging in the early days to get brands to move at the speed that the consumer was ready to move. We were so lucky that some brands did come early, like Benefit and Kiehl’s, but I’d say that’s a really big shift.”
As of 2019, Birchbox has over one million subscribers in six countries and 500 partnerships with various brands. In March, they raised their monthly fee from $10 to $15 – their first-ever price hike since their inception.
The company’s biggest competitor, Ipsy, is using beauty influencers. Birchbox, on the other hand, wants to appeal more to “everyday” men and women.
Katia Beauchamp said: “We haven’t hired a lot of people from the beauty industry because we found that people who don’t know the rules can be very powerful. I feel very interested in this idea of how to use these physical locations as a great place to establish the brand [and] help us be on people’s minds to transact. Things have become very crowded, not just for a subscription, but also for your time. I’d say that’s the biggest challenge for me and for all of our team is we don’t want to be just peddling samples. We all know [beauty isn’t] perfectly recession-proof, but it is one where treating yourself in this category is such a lower entry point than treating yourself in a lot of other categories. Right now Walgreens is a really big initiative for us [and] taking a lot of time and mindshare, and we want to turn that into a big opportunity. So this idea that you know [Birchbox] becomes the place if you don’t love beauty you are still discovering, learning and transacting.”