Birchbox London Pop Up Shop

BIRCHBOX u POP-UP SHOP // // LONDON U.K.

Created for FASM 410: Retail Management Professor Koumbis / SCAD / Fall 2015 Shandy Frey, Georgiana Knox, Ashlee Scott, & Kristin Terrana

EXECUTIVE SU MMARY Founded in 2010 by Hayley Barna and Katia Beauchamp, Birchbox became the first beauty subscription service to reach the market. Over the years, the business has expanded into multiple countries, as well as opening its first brick and mortar store in New York City. This innovative idea to bring beauty samples straight to one’s door revolutionized the world of e-commerce for the beauty industry.

To further expand market growth within the U.K., our proposed pop-up shop will be positioned in London Fields of Hackney, London, an up and coming trendy neighborhood with a diverse population of creatives and families alike. This pop-up shop will be marketed towards the younger demographic that makes up this eclectic neighborhood. In addition, this pop-up shop will partner with Victoria’s Secret in accordance with the annual fashion show that takes place in December to provide the necessary beauty and hair products to get the runway look. This unique collaboration will provide Birchbox a strategic partnership that brings brand recognition as well as provide an advantage for profit in relation to the holiday season. The goal of this proposed pop-up shop is to further expand Birchbox’s position within the U.K. market and to establish new consumer groups.

03 THE CONSUMER

02 INDUSTRY ANALYSIS 01 COMPANY OVERVIEW

6 14 24

CONTENTS

08 COST SHEET 07 MARKETING & ADVERTISING 06 PRODUCT ASSORTMENT

05 THE POP UP SHOP 04 INSPIRATION

32 36 44 48 56

5

01

COMPANY OVERVIEW Overview of Birchbox’s founders and history, and their position in the market.

Birchbox Founders Katia Beauchamp and Hayley Barna

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ABOUT BIRCHBOX

While both attending Harvard Business School, best friends Katia

Beauchamp and Hayley Barna discovered the idea of reinventing the beauty business that ultimately led to the creation of the Birchbox brand.

In 2009, during their last semester in school, the two friends realized there was a void in the beauty industry for selling on-line. With that realization, Katia and Hayley were inspired by the idea that every woman would want a beauty editor best friend who would help them “curate the clutter.” The two set out to bring their vision to life and started with hundreds of cold e-mails to various beauty brands. By September of 2010, Birchbox made its debut with 200 initial subscribers.

Within a short time, Birchbox began to grow, with the number

of subscribers doubling, and more and more women saw the Birchbox model as a fun and convenient way to discover new products. Having been featured in Time, Bloomberg Businessweek, Instyle, and Marie Claire, Birchbox has seen tremendous growth in its short history and now boasts more than a million subscribers and profits estimated at $170 million a year.

In addition, Birchbox has expanded their business with creating a men’s curated box launching in 2012, as well as acquiring JolieBox that same year to expand globally in markets like France, Spain, and the U.K. Most recently, Birchbox opened their very first brick and mortar store in the Soho area of New York City.

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"M

illions of boxes and product matches

later, our mission remains the same: to help

customers find products they love. We keep that top of mind every single day.

10

"

W H AT I S B I R C H B O X ?

Birchbox is a monthly subscription service that features five personalized beauty and lifestyle products for a monthly fee of $10. Featuring over 800 brand partners, Birchbox’s product assortment includes make-up, hair, skin, and home products. The Birchbox Man provides specialized grooming and lifestyle products for men for a monthly rate of $20. In addition, Birchbox features a complete e-commerce site to purchase favorite products at full size versions.

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BIRCHBOX TIMELINE Birchbox launches its subscription boxes, inventory, and website in 2010 with its first 200 paying customers.

2009

2010 In 2009, while studying at Harvard Business School, Hayley Barna and Katia Beauchamp find inspiration and begin the start of the Birchbox concept.

12

2011

Birchbox holds its first event in 2011 with 100 invited guests to preview the upcoming trend of feather hair extensions.

Birchbox debuts Birchbox Man by partnering with USA's Suits and Men's

Health.

Birchbox UK takes over London's iconic cabs for London Fashion Week.

2012

2012

Birchbox acquires Parisbased JolieBox creating a global brand with reach in France, Spain, and the U.K.

2013

2014

Birchbox opens their first brickand-mortar retail shop in Soho, New York City, with specialty hair and nail salons included.

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02

INDUSTRY ANALYSIS Overview of area competitors and analysis of the current industry and market.

COMPETITORS

The proposed Birchbox pop up shop will be located in

London Fields in the Hackney neighborhood of London. Hackney itself is a thriving, up and coming neighborhood with an array of eclectic shops and restaurants. The area features a diverse population with a multitude of immigrants, students, and creatives.

Looking at competitors within the Hackney neighborhood,

a variety of shops and salons occupy the surrounding area. A surplus of both hair and nail salons can be found in Hackney, many offering unique products and services. There is also a multitude of convenience stores in the area that carry and sell lower-priced cosmetics and goods.

For direct competitors, several cosmetic shops with

similar products as Birchbox can be found in this neighborhood, though the majority of these stores are clustered together and about fifteen minutes away from the London Fields area. Easily recognized brand names, like Estée Lauder, Clinique, and MAC Cosmetics, have retail stores within the Hackney area. Other cosmetic and beauty stores within the location include, The Body Shop, Deciem, and Aēsop.

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N O I T A C O L P O H S P U P PO

The Body Shop

Clinique

The Body Shop Deciem

Aēsop

Estée Lauder MAC Cosmetics

HACKNEY, LONDON 17

Founded in 1946 by Joseph and Estée Lauder Empire of beauty, owning 25 major brands including Clinique and MAC and reaching 150 countries Known for prestigious and luxurious products including skincare, make-up and fragrance Target Customer: Women 30+ Price Range: $15-$100

Founded in 1968 by Carol Phillips, Evelyn Lauder, and Norman Orentreich Store locations in 135 countries Dermatologist-created, allergy-tested, 100% fragrance free products that include skin care, make-up, fragrance, and men's Target Customer: Both men and women Price Range: $15-$150

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Launched in 1984 by Frank Toskan and Frank Angelo in Toronto, Canada 1500 locations in 78 countries Known for artistic and colorful make-up products, in addition to fragrance and skin care products Target Customer: Primarily women 18-25 Price Range: $15-$30

Founded in 1976 by Dame Anita Roddick 2500 stores in 60 markets worldwide Emphasis on natural ingredients, ethically sourced, and cruelty-free products including skin care, make-up, hair, fragrance, bath, and men's Target Customer: Men and women 20-55 Price Range: $10-$35

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Founded in 1987 in Melbourne, Australia, by Dennis Paphitis 50 store locations in major global cities Organic, plant-based products, as well as unisex, that include skin care, hair care, soaps, and fragrance Target Customer: Men and women 25-44 Price Range: $20-$110

Founded by Brandon Truaxe in 2013 Sold in 15 countries through independent retailers and stores including Boots, Zest, Urban Outfitters, and Selfridge's Manufactures ten different brands that include products for skin, hair, body, and fitness Target Customer: Men and women 20-40 Price Range: $20-$200

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VICTORIA'S SECRET

94,600

IN NUMBERS Employees working at Victoria’s Secret

VS Stores in more than 60 countries

38 5

1, 260+

1

Years in business

VS Stores in the UK

Annual Fashion Show

THE INDUSTRY

MARKET OVERVIEW

In 2014, the beauty industry saw a 1.1% increase in sales from 2014 to 2015, with the current industry valued at $18.4 billion in the U.K. alone.

With current trends the way they are, the beauty industry in the U.K. is expected to reach figures of $19 billion by 2017. While many consumers continue to purchase beauty products from health and beauty specialists, apparel retailers also saw an increase in the sales of their beauty products as well.

Current market trends show that consumers are highly interested in multi-functional products, such as BB and CC cremes. Sales of these multifunctional products have increased over the past years, and new advances in beauty technology has increased the amount of multi-functional products available.

Beauty trends are now heavily influenced by the Instagram or social media model. Consumers are more likely to look at Instagram, Twitter or Pinterest (specifically) for beauty trends, consumer testimonies and product research.

GEOGRAPHIC SEGMENTATION

3. 79% 5. 03% 6. 57% 8. 97%

75. 64%

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Russia Germany Canada United Kingdom

United States

BUSINESS CATEGORIES

Skincare Hair Lifestyle Home goods Fragrances

Body Nails Cosmetic Tools Makeup Men’s Accessories

Fragrances Body Skin Hair Accessories

Men’s Accessories Makeup

DISTRIBUTION Health and Beauty Specialist Retailers:

39. 1%

Non-Retail Selling (including direct and e-commerce): Department Stores:

9%

Beauty Specialist Retailers: Apparel Stores:

0. 5%

14. 3%

8.4% 23

03

THE CONSUMER A market analysis covering the geographics, demographics, psychographics, shopping behaviors and profiles of the Birchbox consumer.

OVERVIEW

With the proposed Birchbox pop-up shop being centered in London, United Kingdom, consumer analysis covers the demographics and psychographics of this area. London itself is a major global mega-city attracting people from all over the world. With its rich history and thriving arts and fashion scene, London is the largest city within the United Kingdom and capital city of England. Additionally, London’s largest industry is finance and is one of the largest financial centers in the world.

Tourism makes up a major proponent of London with 16.8 million visitors a year, making it the most visited city in Europe. Since 2012, Britain has seen a 6% increase in visitors with Americans making up the majority followed by the French. In fact, measuring passenger traffic, London has the world’s largest city airport system.

In addition to London’s booming tourist scene, the city also draws in students from all around the world with its 43 universities. London has the largest population of overseas students, over 110,000, adding yet another unique quality and advantage to the consumer mix. Many of London’s universities rank as some of the highest in the world, making the city an education superpower. With that, 60% of London’s working age population has a degree.

London is a major global city with an array of peoples, cultures, and lifestyles.

With its booming tourism and education scene, London is a unique melting pot of many different races and ethnicities. In Greater London alone, over 300 different languages are spoken. This unique and diverse city represents a major opportunity for expansion and growth.

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Age: 41% 25-54 yrs. old Median Age for Women: 41 Median Age for Men: 39

43 Universities 110,000 International Students

Population: 8,173,900 49% Males 51% Females Average Household Size: 2.3

Religion: 48.4% Christianity 20.7% Non Religious 12.4% Islam 18.5% Other

36.8% 16+ are Single Age of Marriage: Median Age for Women: 29 Median Age for Men: 31 Median Income: ÂŁ58,300 30% Professional Occupations

LONDON, UK 27

DEMOGR APHICS Majority female consumer, with growing number of men Upscale younger family mix including singles, couples, and families Ages 25-44 Ethically Diverse Highly educated with a college degree + Middle Class, Household Income: $70,000-$90,000 Lives in both urban and suburban areas and often work in management

PSYCHOGR APHICS Millennials make up 23% of the U.K. population with 1.8 billion total worldwide Career-driven with majority opting to wait to enter family life in later years Progressive beliefs and quick adopters to new trends Active, on-the-go lifestyles, therefore participates in e-commerce shopping Fashion forward with knowledge of the latest trends Spontaneous, enjoy indulgence, and value quality Value schedules and are punctual for meetings and events Tech-savvy, connected on social media with 62% engaging with brands on-line

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INFLUENCERS Millennials are often influenced by their peers, including family, friends, and colleagues Also influenced by celebrities, social media icons, and bloggers (33% rely on a blog before making a decision) Often seek opinions from others and are influenced by word of mouth Tend to research before purchasing and will check on-line reviews and ratings of specific products and brands

SHOPPING BEHAVIORS Millennials often have emotional motives when buying in that they want to keep up with their friends and elevate their own status and prestige Millennials also develop patronage motives, tending to be loyal to brands they have connected well with whether based on product assortment, services, atmosphere, etc.

Tend to be well-researched and informed in order to choose the best option Their on-the-go, tech driven lifestyles also affect the way they shop. 1 in 4 of the British population shop on-line at least once a week Often consider price, convenience, and quality when purchasing product

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MEET PA I G E Age: 22 Relationship Status: Single Location: New York City, NY Education: Earning a B.F.A. in Art at NYU and is studying abroad in London Occupation: Part-time Barista Income: £14000 + Financial Support from Parents Hobbies: Likes to Travel, Hang Out with Friends, & Update her Blog and Social Media 30

M E E T LY D I A Age: 30 Relationship Status: Engaged Location: London, England Education: M.B.A. in Marketing from the London Business School Occupation: Marketing Manager Income: £60000 Hobbies: Likes to Shop on the Weekends, Go Out for Drinks, & Pamper Herself at the Spa 31

04

INSPIRATION

Concept and idea for the pop-up shop's design and aesthetic.

34

05

THE POP UP SHOP Proposed pop-up shop concept featuring floor plan, wall schematic, and perspective views.

T H E L O C AT I O N

Hackney, London, has seen major transformation within the past few years, turning a

once crime-ridden neighborhood into a super-trendy hot spot. Due to gentrification efforts, the area has become one of London’s most desirable places to live. This up and coming neighborhood is known for its rich diversity and is home to a pool of creatives including writers, artists, photographers, and stylists. Design students from Central Saint Martins also populate the neighborhood. Hackney is also known for its younger demographic with 46% of the population being under 29 years old. The vibrant neighborhood features progressive shops, trendy restaurants, cool cafes, and boutique hotels.

For the proposed pop-up shop, location will be based in London Fields of the Hackney

borough, drawing in a variety of people including hipsters and families alike. London Fields is a Green Flag award winning park with a multitude of picnic areas, playgrounds, tennis courts, and cycling paths. The park is a popular weekend hangout for locals and tourists and stays busy year-round. Nearby, independent retailers, markets, cafes, and bars can be found offering a diverse mix of amenities and entertainment.

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For this holiday pop up shop, Birchbox will collaborate with Victoria’s Secret to offer

hair and make-up products to recreate the annual Victoria’s Secret fashion show beauty looks.

Specialty Victoria’s Secret boxes will also be promoted featuring all the essentials to get the look with key sample items along with a coupon for a free panty from Victoria’s Secret. This pop up shop will also be promoted through Birchbox’s social media outlets with on-line video tutorials, exclusive behind-the-scenes looks, and sweepstake specials through photo and hashtag sharing. This unique collaboration will offer advantageous publicity as millions of people watch the annual Victoria's Secret fashion show and will also allow Birchbox to further expand into new markets.

T H E PA R TN E R S H I P 39

THE POP UP SHOP

40

41

W A L L S C H E M AT I C

42

FLOOR PLAN

43

06

PRODUCT ASSORTMENT Overview of the Birchbox product assortment for the pop-up shop concept.

OVERVIEW

This unique holiday pop up shop, in collaboration with Victoria’s Secret, will feature

an assortment of hair and make-up products inspired by the beauty looks seen in the annual Victoria’s Secret fashion show. Shoppers will be able to purchase individual products, ranging from hair gloss creme or shimmery eye shadow, to recreate an inspired look from the runway show. Additionally, specialty limited-edition Victoria’s Secret boxes will be available for purchase that include sample sizes of the essential products to get the Angels’ look as well as a coupon for a free panty to be used at participating Victoria’s Secret retail locations.

HAIR

Blowout Styling Spray Gloss Creme Finishing Spray Volume Mousse Hair Oil

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MAKEUP Waterproof Eyeliner Lengthening Mascara Shimmery Eye Shadow Highlighting Blush Ultra Shine Lip Gloss Photo Finish Foundation Volumizing Brow Gel

TO O L S Makeup Brush Set Lash Curler Eyebrow Tweezers Blending Sponge Rounding Hair Brush

47

07

MARKETING & ADVERTISING Key marketing and advertising pieces to introduce the new pop-up space as well as the marketing launch through social media.

MAILER

BIRCHBOX IS PARTNERING WITH

VICTORIA’S SECRET FOR A VERY SPECIAL POP-UP SHOP! THIS HOLIDAY SEASON ONLY. LONDON FIELDS POP-UP IN HACKNEY FREE PANTY WITH PURCHASE OF EXCLUSIVE VICTORIA’S SECRET BOX

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EMAIL

BIRCHBOX We’ve got a secret!

(You’re gunna love it.)

VICTORIA’S SECRET ‘s BIRCHBOX A very special holiday pop-up is happening and the deals are too good to keep hush-hush.

When?

This holiday season!

Where?

London Fields!

How Do I Sign Up?!

By clicking right ...

HERE! 51

I N S TO R E S I G N A G E

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SOCIAL MEDIA

YOUTUBE CHANNEL 53

SOCIAL MEDIA

FA C E B O O K 54

SOCIAL MEDIA 6min

birchbox

BIRCHBOX We’ve got a secret!

(You’re gunna love it.)

VICTORIA’S SECRET ‘s BIRCHBOX A very special holiday pop-up is happening and the deals are too good to keep hush-hush.

When?

This holiday season!

Where?

London Fields!

How Do I Sign Up?!

I N STA G R A M By clicking right ...

HERE!

55

08

COST SHEET

Costs for the proposed pop-up shop including materials, fixtures, display elements, and marketing and advertising.

BUDGET & COSTS Building Costs

£65,642

Fixtures

£3,061

Tables (square)

Tables (long)

£427

£193 per table, 3 tables = £579

Slatwalls

£45 per slatwall, 5 slat walls = £225

Shelving Units

£18 per 6 pack of shelves, £180 (10 packs)

Shelving Accessories

Signage fixtures

£301

Cash Wrap

£404

Lighting

£708

£237 (shelving hooks and brackets)

Technology £782 Square Stand £194 iPad £588

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Square Magstrip Reader Free

Operating Costs

£2,310 (per month)

Marketing/Advertising

£3,500

TOTAL COST

£75,295

CONCLUSION

Creating a pop-up shop in partnership with Victoria’s

Secret would further broaden the reach of Birchbox as a global beauty brand. A beautiful, creative and instantly recognizable pop-up shop in the image of a Birchbox would attract many shoppers around London Fields, as so many competitors’ stores are in the vicinity. Moreover, the Victoria’s Secret Fashion Show is broadcast and viewed by millions, and having Birchbox product placement featured on air would boost sales almost instantly. The glamorous event features celebrities, famous VS angels and more, and creating an exclusive “Get the Look,” Birchbox would be a major success for the brand, as so many customers aspire to achieve the Angel’s look. By featuring Victoria’s Secret, a well loved brand, and offering exclusive coupons for what Victoria’s Secret is famous for, Birchbox would receive major brand recognition as a high powered, current and innovative company.

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BIRCHBOX POP-UP SHOP // // LONDON U.K.

u Created for FASM 410: Retail Management Professor Koumbis / SCAD / Fall 2015 Shandy Frey, Georgiana Knox, Ashlee Scott, & Kristin Terrana