BirchBox: Box to Box
Sharing Radiance with Others
YMA Scholarship Competition 2016 Charlytte Morrone Fashion Marketing & Management Business
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Extending the Power of the Box
When founders Hayley Barna and Katia Beauchamp launched BirchBox in 2010, they sought
to provide products to help improve the customer’s beauty confidence. Now, bringing in $96 million in annual sales, it’s time to build on that success in innovative ways (Griffith, 2014). In order for BirchBox to build on its success, partnerships and collaborations are key. Modern consumers care deeply about brands devoted to corporate social responsibility through their innovative business model. Now is the time to make an impact on the rest of the world. BirchBox has the potential to begin changing children’s lives one box at a time. BirchBox can deepen their relationships with their customers by taking the idea of a box beyond the act of buying and into the simple act of giving. BirchBox: The Industry Leader
BirchBox is the industry leader in subscription retailing. They have seen 20%
monthly growth in the past year (Griffith, 2014). Thriving on superior customer service, BirchBox excels in customizable beauty profiles and rewards. However, they are missing that deeper connection that other competitiors have.
BirchBox’s main competitor is Ipsy. In the same price range, Ipsy offers a product that can
be purchased for ten dollars a month. Their customers receive a “Glam Bag” featuring five beauty sample products. Ipsy focuses on makeup and beauty where as the primary focus of BirchBox is on skin and body care. Ipsy also has branched into the eco-friendly re-usable makeup bag. Another feature of Ipsy’s services is the customer can take a quiz that allows Ipsy to send them products tailored to their specific needs. However, Ipsy lacks in their attention to customer service.
GlossyBox is another beauty subscription retailer. For $21 dollars a month, customers can
purchase a box with deluxe beauty sample product inside. GlossyBox is an European based company, so, their customers are exposed to a mix of American and European beauty products. Occasionally they fill their boxes with codes to entice customers. Their one pitfall is their pricing, customers are not as likely to commit to a new service for a higher price than competitors.
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• Personalized products produced monthly • Innovative culture that helps bring forward new products and services • Lack of seamless integration among their Omni channel platforms • Lack of product variety inside the boxes and repetitive product sampling • Inconsistent size of product samples
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BirchBox S-W-O-T Analysis
• Integrate new technology into their marketing and service tactics • Integrate various distrubution channels into an all encompassing omni-channel platform
• Copycat Businesses: -Sephora launching Play! (Brooke, 2015) there monthly subscription business model • Customers fatigue
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Getting to Know the BirchBox Customer
BirchBox has a large customer base, consisting of men and
women ranging from 20 to 55 with a middle to upper level income. However, to understand the core customer, meet Sophie. Sophie is a 24 year-old living in Dallas, TX working as an assistant merchandiser for JCPenny. Her disposable income is around $40,000 a year. A frequent shopper of online retailers and brick and mortar stores, she shops at Zara, Nordstrom, J-Crew, Lilly Pulitzer and Lululemon Athetica. She reads blogs versus magazines, researches online, and religiously reads product reviews prior to purchasing. Influenced mostly by social media,
Image 1 she is inspired by her friends and by celebrities. Sophie is socially aware of the global impact of retailing and supports the move towards a greener planet. In addition to her concern for the environment, Sophie cares about people and is active in supporting many local charities. Shopping is a sport in Sophie’s world and trying new things is a thrill. While she has expensive taste, she loves a good discount and is always on the lookout for coupons or customer rewards.
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Image 2 My Big Idea: Box to Box
The subscription business model brings the challenge of deepening relationships with
customers over time in a way that avoids customers’ fatigue. Customers care about the commit-
ment of BirchBox to corporate social responsibility. According to the study by Nielsen, 55% of
global online consumers are willing to pay more for product provided by companies committed to positive social and environmental impact (Press Room, 2014). Now is the time for BirchBox
to change the world one box at a time. BirchBox will bring “school boxes” and “lunchboxes” to
children across America. This initiative by BirchBox will be made possible with the partnership
of The Kids in Need Foundation and No Kid Hungry Organization. We are in danger of losing an entire generation of leaders, innovators, and problem-solvers and BirchBox Box to Box will
help end that starting today. One in Five children in America do not receive the food that they
need annually. The same is true for their education, statistics show that this is often caused by the economic situation of their parents (Hungry Children Suffer). The Kids in Need Foundation is a
non-profit organization with the mission of equipping kids with the school supplies they need to excel and learn. BirchBox will also partner with Staples to create “school boxes” filled with five school supplies sent to children across America who are in need.
In addition to the “school boxes,” BirchBox will partner with the non-proft organiza-
tion No Kid Hungry and Whole Foods to create “lunch boxes” of healthy food items. When BirchBox members sign up, on the third month of their subscription they will receive the option of sending one “schoolbox” or one “lunchbox” to a child in need. By participating in the Box to Box program, subscribers will be proving a child in need with a box of their own. While this is a great method of charity, it is also a great way to retain customers. This is because
customers will feel that if they were to leave BirchBox a child in America would not receive a box, a box that could potentially change their lives. These acts of charity will help Birchbox connect with customers on more of an emotional level while demonstrating their commite-
ment to supporting quality of life. Research shows that 88% of consumers are more likely to buy from a company that supports and engages in activities to improve society (CSR, 2008).
4 BirchBox Box to Box will connect the brand with the values customers care about the most. Together, Birchbox and its consumers will help build a better tomorrow.
Customers Who Care: The Power of the Box
On the BirchBox website, there will be a section that allows their customers to send the
gift of an exclusive box created to support women who are battleing cancer, with the support of the Look Good Feel Better organization. By enabling their customers to share this gift, Birch-
Box will be furthering there mission of empowering woman to feel confident. The expenses of
executing this new approach include shipping costs, operating expenses and the cost of materials needed to fill the boxes. The barriers would arise with the risk of poor management from Birch-
Box, potential lack of dedicated resources, difficulties with potential partnerships and customers
failing to take advantage of the opportunity presented by Box to Box. The great potential Box to Box presents for building lasting relationships with valuable customers outweighs its potential costs.
BirchBox Box to Box is inspiring their customers to partake in a movement to flourish
change by taking the brand experience beyond the purchase of a box and by turning the box into
a vehicle for social change. Box to Box recognizes that true beauty is more than what lies on the
surface, but is all about sharing that radiance with others. A beautiful, confident person is one that gives and BirchBox will inspire customers to experience the joy of giving by donating BirchBox to others. BirchBox Box to Box is empowering change.
Image 3 The BirchBox website featuring the Box to Box movement
Image 4 Mobile Ad for BirchBox Box to Box
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Reaching Out to to New Customers: Fly Away with BirchBox
It is time for BirchBox to break into the Asian market. Beijing has the second busiest
airport in the world and in order to expand, a duty free pop-up shop located in the Beijing Capital International Airport will allow BirchBox to reach a diverse and valuable international travelers, a group of people who live life on the go (Hetter, 2015).
The majority of global premium cosmetics sales are concentrated within the U.S and
Asia (Ĺ opaciuk, 2013). China is one of the four countries that accounts for 25% of the total global beauty industry (Ĺ opaciuk, 2013). As health and beauty is a continuously growing market in Asia, BirchBox will partner with United Airlines, as it is one of the few airlines that flies directly into Beijing, to create a pop up shop inside the United Airlines terminal. After opening initially in Beijing, pop-up shops would move on to Tokyo International in Japan, Incheon International Airport in South Korea, Dubai International, the Domodedovo International Airport in Moscow, Russia and Tambo International in South Africa. The visual apperance of the pop-up shop will be a symbolic representation of a box, a place where customers can learn about the brand and the products from within. It will be a unique installation that allows customers to directly interact with the latest touch screen technology and to create their own personalized box with professional help from a BirchBox representative.
Image 5. The pop up shop inside the Beijing International Airport
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The Power of Partnership: BirchBox joins forces with Life Time Fitnesss
A concern for health, fitness and well-being have become a dominant lifestyle trend
and a major theme of our modern zeitgeist. The health industry is one of the biggest stimulants of today’s economy. The health industry now has a powerful impact on the beauty market that is stronger than ever. Total beauty is not complete until the body and spirit are taken care of. How can customers feel confident if their whole being is not happy?
BirchBox will associate themselves within Life Time Fitness, a health and fitness club.
Located in 26 states and two clubs in Canada, Life Time operates 117 centers. Life Time encompasses the entire health experience with fitness programs, a day spa, family recreations, pools, and a Lifecafe. Life Time aims to help organizations, communities, and individuals achieve their total health objectives, athletic inspirations, and fitness goals. An advocate for improving children’s nutrition, Life Time has the Life Time Foundation, which supports a healthy planet through bringing school lunches to various programs. Changing lives positively every day, Life Time aspires to encourage customers to achieve the complete healthy lifestyle.
BirchBox will create a store inside the Lifecafe in six of the Life Time Centers in the
U.S and one in Canada. The BirchBox store will carry BirchBox best selling products and provide customers with the opportunity to create their own box of samples and to become monthly subscribers.
Life Time offers their own set of rewards called LT Buck$. LT Buck$ can be earned
by becoming a new member, referring friends to join Life Time, participating in fun promotional activities and purchasing gift cards through Member Advantage.
Image 6. BirchBox banner and LT Buck$
7 In order to use these rewards one must download the Life Time Health app and spend them on what they love and with the BirchBox colloboration, now the BirchBox store is included in what they love.
BirchBox will market to their customers through the web. BirchBox will buy a banner
placed at the top of the Life Time Fitness website. This will draw customers attention to the BirchBox’s webpage. Life Time customers will receive an email with the newest BirchBox products that are now offered at a local Life Time location. Each customer will receive a personalized email with what products BirchBox sees fit for their active lifestyle. An incentive to download the BirchBox app customers will receive 20% off their first purchase of full sized products sold at the various Life Time locations.
On National Family Health & Fitness Day, on September 28th 2016, members of Life
Time will join the Box to Box campaign to give a BirchBox to a family member filled with their favorite health products sold at BirchBox. Life Time Fitness will attract new customers by encouraging them to participate and to become involved and to take advantage of the incentives offered.
The Power of Partnership: ASOS and BirchBox Inspire Change
The essence of the Box to Box campaign is changing lives through confidence and
inspiring others to do the same. ASOS is one of the largest online only fashion retailers in the word with websites in the UK, Europe, USA and Australia. ASOS now has 8.2 million customers with 5 million of whom live outside of the U.K. (ASOS, 2014). A large portion of their success is due to their innovative business nature, always striving to create innovative partnerships and tactics. BirchBox and ASOS will join forces to empower the innovative culture of both brands. Together they will create a limited edition collection of makeup bags, sold on the BirchBox website and mobile app. This makeup bag will become a gift featured inside December’s box for BirchBox customers.
Image 7. A still from the ASOS and BirchBox video
8 ASOS can help BirchBox reach even more customers in the interactve digital space through a collaborative video. This video will be launched during the holiday season to market Box-toBox, in which a group of millennials dressed in head to toe ASOS will receive boxes with one of the BirchBox makeup bags inside. Once they open the box they will be called to give this makeup bag to a stranger anywhere in America. Given the immense success of ASOS’s previous #BestNightEver Christmas video, generating more than 5 million dollars in sales, consumers will be able to shop the Box to Box makeup bag collection straight from the video (Five of the Best, 2013). This video will help boost the excitement of sharing radiance with others.
On various social media platforms BirchBox will ask customers to share the story of
their bag recipient. ASOS followers will use the hashtag #asosboxtobox to show their involvement in the campaign. This marketing strategy will unite the community and create an overwhelming sense of excitement as customers learn about the experiences of others. This partnership with ASOS will attract new customers by focusing on building strong relationships.
Marketing Campaign Reveals New Brand Ambassador
BirchBox needs a brand ambassador who is going to make a genuine impact. Accord-
ing to the September 2013 Nielsen Trust in Advertising report, 69% of people trust branded channels (Newswire, 2013). Twenty two year old actress Shailene Woodley is known for her charity efforts and exudes the radiance needed to be the brand ambassador for BirchBox Box to Box. Shailene has shown her generous nature with her donations to the Children with Hair Loss organization and her own charity All It Takes. She has raised $60,000 for ALL It Takes, a charity that promotes youth empowerment and inspiring meaningful change (Thurmond, 2015).
Image 8. Shailene Woodley for Box to Box
Image 9. Shailene Woodley’s social media following
9 Shailene is known for her efforts to educate her fans about the healthy, natural ways of life. She will maximize the visibility of BirchBox with her personal involvement in social media. An influencer, Shailene has a well-established online presence and has proven to be a natural born leader in her efforts to educate and inform. She exudes passion for improving the community, oneself and the environment. She will be announced as BirchBox’s ambassador in February at the time when BirchBox will launch “A Day Without” campaign; a campaign that promotes recycling. Customers will be encouraged to come to the SoHo location in New York to participate in a movement to flourish change and better the environment. By bringing in empty makeup products, customers will receive reward points for each product they bring in. Shailene will encourage her followers to use the hashtag Box to Box on social media and invite them to join her at the store. By sharing her experience and passion for Box to Box Shailene will create an emotional bond with the BirchBox brand and BirchBox customers. Planning for the Future The following financial plan is an overview for the six month period of August 2016 to January 2017 of the financial impact of the new marketing strategies I have created for BirchBox including the new customers for the brand, the new monthly revenues created by these customers and the expenses required to implement these strategies:
Image 10 Box to Box Ad in Magazine
10 The New BirchBox Customer
BirchBox needs to be where the customers are. The target market for Box to Box is 18-
45 year olds. In 2015 millennials became the largest American workforce. Research shows that millenials give to causes, donate impulsively and want to get involved to volunteer (Hawthorne, 2014). Generation Y is active in promoting charitable organizations because of their familiarity with technology and there desire to bring positive change in the world (Who Gives, 2015). Millennials want to feel like they are investing in a social movement (Who Gives, 2015). It is imperative that BirchBox use the philanthropic movement of Box to Box to establish lasting relationships with these consumers.
The following customer lifetime value analysis projects the financial impact of the 87,400
new customers annually my strategies will bring to BirchBox over the period of five years including the anticipated revenues, retention costs, profits and the net present value of profits:
Box to Box is a movement that will become a vital part of the BirchBox ethos and brand identity. Are you ready to send your first box to change a life today?
Image 11 Box to Box Ad
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Images
Cover Photo Katie Georgas (photographer). 2015. BirchBox Box to Box Campaign. Created for YMA competition.
Image 1
AQUA TANK WITH TRIBAL BLACK AND AQUA SHORTS. Retrieved from http://forum. ladypopular.com/viewtopic.php?t=31546&p=210732.
Image 2
Retrieved from https://www.couponshop.co.uk/articles/family/back-to-school-savings/.
Image 3
Created by Charlytte Morrone
Image 4 Created by Charlytte Morrone Image 5 Created by Charlytte Morrone Image 6 Created by Charlytte Morrone Image 7 Created by Charlytte Morrone Image 8 Created by Charlytte Morrone Image 9 Created by Charlytte Morrone Image 10 Created by Charlytte Morrone Image 11 Created by Charlytte Morrone
Appendix A
Interior view of the Pop-up Store in the Beijing International pop-up store.
Appendix B The BirchBox store located inside Life Time Fitness. The exterior and interior view from a customer’s perspective
Appendix C The BirchBox website featuring the ASOS colloboration of makeup bags