Subscription Services Shake Up Ecommerce

Beauty Products

Image from: Beauty Products / Shutterstock

What’s old is new again in the world of subscription box services.

Subscription box services are still a bit of a novelty in the retail world, but they have quickly become an innovative and extremely popular way for consumers to sample a variety of products in an affordable, convenient way. Shoppers simply provide the subscription provider with a bit of personal information about who they are and what they like, and each month, for a low cost, a customized box of product samples appear. Both parties, company and consumer, win… in theory.

In reality, the subscription model may not always have the desired effect for the retailer. Birchbox ranks as one of the most highly recognizable subscription services, and since its launch in 2010, subscription order numbers and web traffic have steadily increased, as evidenced by Compete PRO monthly traffic data.

Uvs and Visits Birchbox

However, despite increased traffic, there is a disconnect when it comes to Birchbox subscribers purchasing full sized products directly from the Birchbox website.

Average Stay has decreased both month over month and year over year for Birchbox. In conjunction with a decreasing Average Stay, the Outgoing Traffic report for Birchbox.com illustrates that consumers may start product research at Birchbox.com, but quickly navigate to a search engine or brand partner like Sephora to execute a purchase. Simply put, although the product samples come from Birchbox, consumers take purchasing action elsewhere on the web.

Avg PPV Birchbox

BirchBox Outgoing Traffic

To combat the apparent disconnect among their subscribers, Birchbox will invest in traditional retail tactics to revolutionize their current business model, and potentially the entire landscape of the retail industry. Birchbox hopes that by adding brick and mortar locations to their already powerful arsenal, their consumers will be more likely to buy directly from Birchbox, in person and online, as opposed to purchasing from brand partners.

Birchbox founders Hayley Barna and Katia Beauchamp created their subscription service to make it easier and less intimidating for women to navigate the ever expanding world of cosmetics. Now, the company will continue to leverage the notion of ease to make a bold business decision.

Birchbox will rely on the roots of retail to revolutionize the modern day shopping experience and make it less complicated. The company is set to open its first retail store in late spring. What exactly does the brick and mortar element bring to the table? The total retail experience. Rather than navigating through, what can feel like, disjointed channels to ultimately make a purchase, Birchbox aims to eliminate any confusion about where to purchase. With the new, multi layered strategy, consumers will now know how to interact with the brand and create a relationship with it on all levels, whether it be online or in person.

Birchbox believes that a stronger relationship with consumers has the potential to seamlessly translate into increased revenue.

Experts in the industry agree. Teresa Novellino of the Upstart Business Journal states, “For the brick-and-mortar vanguard, these new players are worth watching, because they are bringing some of the greatest assets of the online shopping experience in-store. For example, Rent the Runway allows customers to go online and set up a virtual fitting room for themselves so that the outfits they want to try on are waiting when they arrive. Bonobos keeps inventory (and hence costs) to a minimal with its Guideshop concept, which lets shoppers visit the store and get one-on-one attention while they try on, but everything is ordered online.”

The coming months will determine whether the concept is a success for Birchbox specifically, but as the subscription ecommerce space continues to become more crowded, increased investment in traditional methods, such as a brick and mortar element, may determine which subscriptions brands succeed and which fall flat. 

About Sarah Friedman:
Sarah is a member of the Syndicated Products Customer Success team at Millward Brown Digital. Sarah attended Northeastern University. Prior to Millward Brown Digital, Sarah worked in Advertising and Public Relations. Connect with her on Google+ or LinkedIn