PUNYA CHANANA
PART 1- CREATIVE APPROACH
COMPETITIVE ANALYSIS
1
One of the most successful subscription based companies, Birchbox, has been shooting sales ever
since it got in business. With this subscription based services, only 10% of the customers are actually going back to buy full size products. Now, their loyalty program is very innovative for a strong customer base. But, an opportunity exists to achieve financial strengthening and to strengthen the long-term relationship with their customers.
The proposal is that they strengthen their points system, where by the customers find it exciting
to achieve certain points. During this process, the customers look forward to achieving certain number of points in their system for something they get in their favor, from a beauty class to some monetary value off on a full size product. Over the years, Birchbox has developed a few competitors that have one idea, and that is to sell samples before the customer goes to buy full size products. Below is a competitive analysis of Birchbox, Ipsy and BeautyArmy comparing different factors.
Women- $10/month Men- $20/month
Women- $10/month
Women- $12/month
5 surprising products
5 surprising products
6 products of customer’s choice
STORES
E-commerce and 1 Brick & Mortar store in Soho
E-commerce
E-commerce
SOCIAL MEDIA FOLLOWERS
Facebook- 1,568,766 Instagram- 377k
Facebook- 2,936,289 Instagram- 1 million
Facebook-54,025 Instagram- 1,836
PACKAGING SERVICE
Eco-friendly box
Include a cosmetics bag with their monthly shipments
Re-usable box and comes with a note from the BeautyArmy team
EXTENSIVE SERVICE
Sells bigger samples and products to men
Bigger samples than Birchbox and BeautyArmy, oftentimes customers get full size products
Customers get to choose the samples they want in the box
PRICE
NUMBER OF PRODUCTS SOLD
SWOT ANALYSIS
2
There are many factors that play a role when a company is established. Here is a SWOT analysis, that closely evaluates the different factors.
WEAKNESSES
STRENGTHS • Easy to navigate website
• Expand their business to other countries, outside of
• Customers can do any product purchase in
US, UK, Spain, France
comparison to Ipsy (competitor)
• Offer more high end brand products to reach a larger
• Step by step beauty tutorials on website
audience
• Offers subscribers tailor-made products (according
• Open more brick and mortar stores
to personality, style etc.)
(City suggestions- LA, Washington DC, Miami)
• Their points system (points turn into
• Get some celebrity endorsements, especially those
currency, you earn the points when you shop, review who are known for the beauty products they use that samples, and refer friends)
people try to get similar looks (Example, the eyeliner Kylie Jenner uses) • Birchbox needs to make sure they are including green beauty brands as customers want to invest in companies that believe in doing good to the
OPPORTUNITIES
environment
THREATS
• Consumers expect high end brand product
• Competitors with similar ideas
samples but don’t receive them
• Demanding customers need help picking products
• Birchbox surprises customers with products, where
that are good for them, so maybe have live online
as they could let the customers choose the products to chats with cosmetologists buy, like BeautyArmy lets customers choose
• Many brands use celebrity endorsements for their
• Limited brand partnership reduces customers
marketing strategy- so audience sometimes is on a
• Customers have opportunity to buy samples else-
lookout for famous faces
where or try testers in different stores without having to pay anything (Example, before purchasing anything from Bath and Body Works, I like to go in and try some testers and then make that purchase for an actual size bottle) • Sustainability- customers are more inclined towards the betterment of the environment so they might be against high amount of packaging, transportation used to help ship the packages- customer sentiments
CUSTOMER ANALYSIS
3
This section will show a clear analysis of the demographics and psychographics of the existing customers and also what urges them to shop.
Age group: 24-36 Education: Graduates
70%
30%
Income: $30,000+
- Love to shop
- Have become increasingly conscious about looks
- Beauty conscious
- Believe in simplicity
-Sophisticated shoppers
-Opt to buy brands that are already have heard off/
- Modern but professional
know.
- Into new trends even if they have only few
- Less likely to visit B&M plants
minutes in daily routine
-Less active on social media, specifically in giving
-Tend to sample new products more
reviews.
-Get motivated to shop by promotions, sales and
- Really read into the details on a product before
incentive programs
purchasing it CUSTOMER PURCHASE INFLUENCERS
Customers review blogs
Keeping customers active
The audience analyzes
before making a
on social media benefits
crowd-sourced
purchase. User reviews
the business. Engaging
information more than
increase conversation that
with others by seeing
just taking reviews from
eliminates any doubts the
their photos regarding the
their peers.
potential customers have
subscription box helps
and helps in product
them get a clear picture
selection.
rather than just online advertisements.
CREATIVE APPROACH
4
Loyalty programs are a great way to not only retain customers but also have financial boosts from it. Birchbox, over its years of operation has definitely gained a lot of sales from it. To bolster in terms of their point system they could go for an approach, where the customer always gets excited to fill in their points bank for something exciting.
For every time the customer spends $1 they get 1 point. Example, $80 product worth 80 points. STEP BY STEP GOALS:
When the customer reaches 100 points, they get a beauty class either virtual or in Birchbox’s Soho
store.Knowing that since a lot of customers will be reaching these points around the same time, rather than having personalized beauty class for each one, the customers will get to vote what they would like a tutorial in, and will get to participate as a whole. The idea behind the beauty class, is that many people like myself, like to at least watch 2-3 before tutorials before actually understanding how something works, and with a personalized class, I understand the product even better.
In addition to that, they also get $10 off (monetary value) on a full size product. This is a way to
make customers actually purchase products to get points and when they get points they are rewarded.
When the points accumulate to 500 points, the customers get up to $50 off one product, of their
choice. With the cash incentive, the customers would want to stay a loyal shopper and earn their way up with such exciting offers. When the customer reaches 100 points, the points are not used up for the beauty class or the $10 on a full size product, it is to get customers to be a part of the loyalty program and build up their points.
FORMAL SYNOPSIS
With this loyalty program, not only will the customers be rewarded for being loyal but also, it will
help Birchbox get insights on customer information, which is a keypoint as it will not only continue giving a clear view on the target market, but also, it will help improve customer communications.
A tiered points system will help Birchbox as then they will be able to differentiate between their
loyal shoppers and their casual users. If Birchbox is able to retain around 5% of their regular customers, then their business can grow to about 100%. Birchbox customers need a reason to shop and with such a rewarded points system, this proposal will help them get rewarded for when a purchase is made.
PART 2A- DESIGN
THE BRAND, ITS ORIGIN AND ITS CUSTOMER
1
To make existing Birchbox customers become loyal shoppers, and go back to the website to buy full size products, I present to you, “refine.” Refine is a brand that sells cosmetic tools and is targeted towards those eco-conscious customers, who believe in using soft bristle brushes to enhance their existing beauty. The idea behind this brand is to reach out to those customers who want to look and feel good about the choices they make. Refine, specifically keeping in mind Birchbox’s DNA, offers a unique selection of cosmetic tools. The name for this brand was inspired by how it is important to leave behind less carbon footprints by removing the impurities around us. INSPIRATION BOARD
For Refine, the inspiration came from the greenery around, the soft texture and also the sturdiness in nature. Our brand believes that beauty comes not only from inside the world but also the outside.
CUSTOMER PROFILE
Age: 21, eventhough this brand is catered to all age groups. Occupation: Graduate Income: $55,000 Wears: Stella McCartney, Edun, Voz Interests: Fashion, Photography, Socializing Shopping Behavior: Impulsive cosmetics shopper
PRODUCT LINE AND ITS SPECIFICS
2
Specifically targeted towards Birchbox’s customers, Refine’s product line is interchangeable, friendly, and easy to use. Offering up to six products, Refine has come up with this line keeping sustainability in mind.
PRODUCT LINE
The purpose of selling these products with the handle sold separately is so that the Birchbox customers when they get their subscription box, get the ferrule and bristles of a specific product, and find it necessary to attach that to a handle. In order to buy that handle, they would need to go to the Birchbox website, and purchase the handle which also comes with a stainless steel cap. The reason behind that cap is that, because the handle is meant for a dual-purpose, the cap conveniently covers the side that is not being used, making it into a single brush. The screws on the ferrule is what makes it so easy to either make into a one-in-one brush or a two-in-one brush. All the ferrules are designed in a way to fit the handle regardless to what the tip of the brush is. The handle is made as a two-in-one so that the customers find it easy to store, as it frees up the space in a make-up bag.
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SPECIFICS
HANDLE WITH CAP
$9
CHEEK BLUSH
$10
Handle: Bamboo material
Bristles: Synthetic taklon
Cap: Stainless steel
that is soft when applied.
Handle available in other different materials such as, recyclable plastic, recyclable aluminium, natural wood etc. EYESHADOW BRUSH
FLAT LIQUID FOUNDATION $7
Bristles: Non-synthetic fibers. This product is also
BRUSH
$12
Bristles: Cruelty-free bristles.
available as “three in one” in an eco-clear flat seal bag, keeping costproduction in mind. EYESHADOW SPONGE $6 Tip: Constructed with soft sponge material, nonallergenic.
LIP SCRUB BRUSH
$16
Bristles: Nylon and 100% biodegradable.
SUBSCRIPTION BOX AND IN-STORE SIGNING
SUBSCRIPTION BOX
IN-STORE SIGNING: WALL SIGNAGE
4
CREATIVE MARKETING ADS
5
BUS STATION
www.birchbox.com/refine
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MAGAZINE
www.birchbox.com/refine
TAXI
Going off of the final strategy proposed in Part 1, which is about offering beauty classes when the customer receives 100 points and $10 off on a full size product, when the customer’s points accumulate to a total of 500 points, Refine is a brand that works just best for Birchbox as it gets customers to buy another product as it complements the product they get in their subscription box. Refine caters to those young teens purchasing their first make-up kit, the mom’s on the go and even the career women. Eventhough, Birchbox has a target age group of 24-36, buying eco-friendly cosmetic tools is something any age group would like to purchase with the growing trend of sustainability. The customers buying Refine could be older women wanting to look young, and the pre-teens beginning their journey on make-up.
PART 2B- BUSINESS
EXPANSION STRATEGY
1
Over the years, Birchbox has opened a brick and mortar store in Soho, NY and many pop up shops across the United States. Opening another pop up shop might not bring in a lot, but something on the basis of a “pop-up” is where Birchbox can get a lot of customer’s attention. Pop-up shops are definitely customizable and practice, as they offer great opportunity for brands to expose and market themselves to their desired demographics, but also, they make themselves more accesible by “popping” up in different locations. Using a similar idea, the proposal is for Birchbox to go “on the road” and from there set up another brick and mortar store, which would be in Los Angeles, California. The new brick and mortar in the west coast could definitely bring in a niche market. The idea is to have a box that travels around on the road, the car actually pulling the trailer gets parked and then the trailer box is placed on certain roads, where there is high foot traffic. The car would be driven by the founders of Birchbox, Hayley Barna and Katia Beauchamp and also their Senior Video Content Manager, Lorelei Orfeo. This way the mobile pop up shop would be very personalized as these three as the faces of Birchbox. So this way when people actually see these three girls, the ones who know them or even the ones who don’t they will be able to get a personal touch of the products they buy from the mobile store. With the mobile pop up shop, the customers are literally getting an “in-store” experience. And seeing this box on the road is something similar to the food truck craze, but just applied to retail instead. Additional Benefits: Unexpected: It is something that drives interest and high foot traffic. More money: Hitting more markets for the same dollar value asked in Birchbox’s B&M store and e-commerce website. Added benefit- exposure to audience who may never have heard of it before. Testing: No restraint of renting semi- permanent retail space. Moving in with trends.
This adjustable box can be folded/compressed and attached to the car again and taken to different streets. With the box being adjustable, the setting up process will not be tedious.
2
MARKETING CAMPAIGN BIRCHBOX HITS THE ROAD!
Since the box will be on the road, traveling around, it is very important to market it well through different mediums like the logo on the box, social media, route following apps and the actual route itself as it leads to the main end which is the new brick and mortar store in Los Angeles. ROUTE:
Central Park, NY
Washington, DC
Miami, FL
Dallas, TX
Chicago, IL
San Francisco, CA
LA, CA
start
end
In order to campaign Birchbox’s new store through the route will be featured in social media. Via customer-driven apps like Instagram, Twitter, Vimeo, this whole idea of “Birchbox hits the road” will really come across well. 1
Logo of Birchbox on the traveling box- People get attracted to seeing the logo on the box, get curious, and because of curiosity, they go in the box and check it out! Whoever buys products from the actual mobile pop up shop could get points from Birchbox.
2
Using Instagram and Twitter to hashtag either that they are on their way, for example, #2hourstobirchboxinchicago as a way to keep updating people about location as and when they keep getting closer to location and also of hashtaging where exact location of box is especially the streetname. Using eye-catching hashtags for Instagram like, #Birchboxhitstheroad could really get consumers excited. Also making customers use those hashtags and upload photos on their own accounts of them visiting this box or even if someone sees it on the road, could be a brilliant way to elevate the engagement amongst the consumer and Birchbox.
3
To get the crowd even more with the company, Vimeo is another strong way to market this box. Vimeo could be used in a form of a contest, where in whichever the first customer in every different location who makes a video of them visiting the box receives a free sample.
4
Transloc- The GPS for Transloc would be set in the box, so when customers download the app they would be able to track the exact location, accurate time arrival, route and up-to-the-second alerts which would keep the customers satisified regarding the transparency and the minute-to-minute actions.
3
DISTRIBUTION OF SIX-MONTH ROUTE
JANUARY Launch party- digital first and then in pop up box as the social media prepping was already done a month in advance. FEBRUARY Trailer starts from Central Park, NY, first dayopening ceremony. Box travels to Washington DC from NY- 229 miles. Opening Ceremony and then actually selling from box in DC. MARCH Box travels from DC to Miami - 1,052 miles. Opening ceremony in Miami and then box become functional. Box travels from Miami to Dallas- 1,310 miles. Opening of box in Dallas and then becomes functional. APRIL Box travels from Dallas to Chicago- 926 miles. Opening of box and actually selling from box in Chicago. Box travels from Chicago to San Francisco- 2,370 miles. MAY Opening and actually selling from box in San Francisco. Box travels from San Francisco to Los Angeles- 383 miles. Wraping up. JUNE Preparation and actual launch of Birchbox’s new brick and mortar store in Los Angeles.
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INNOVATIVE PARTNERSHIPS
AirStream Trailers because the
Ford because not is are those cars
mobile pop up shop which is in a
very smart looking, but also, they
form of a box, is basically a
are flexible and comfortable from
trailer. So partnering with
the inside, keeping in mind the
AirStream and making a few
long traveling that will be done
alterations will definitely give out
throughtout the duration. Also, an
an outstanding, comfortable to
advantage is the fuel economy to
sleep in (girls who will driving,
keep the car moving on the road.
will need a place to sleep), and also tedious outcome.
FINANCES Airstream trailer- $12,800 Lincold Ford Car- $24,000 Construction + Design- $15,000 1 Launch party- $7,000
TOTAL:
Opening ceremony (light
$61,650
hors d’ouevres, drinks, decorations)- $900 Misc costs: Parking- $450 Gas- $1200 for 6,270 miles Food cost (groceries or dine out)- $700
CONCLUSION
5
Opening another brick and mortar store in the United States will be very beneficial for Birchbox as according to statistics, 61% consumers still prefer to shop -in store, compared to 31% who turn to the internet. Also, one of the largest drivers for in-store shopping is the ability for customers to sample a product there and then and get the product immediately if they show interest in it. For many moms, which is one of the highest target market’s for Birchbox, they shop in store as a social activity as in-store customer service really matters to them. Another thing why Los Angeles will be beneficial is because Birchbox already has a store in the east coast, and many people who are in the west might be wanting to get that in-store Birchbox experience. A place like Los Angeles, definitely will help drive sales and get more customers interested in Birchbox. The fourth trend-setting city in the world after New York, Paris, and London has many blogstars that reside in LA, and through social media it could be a win-win situation for Birchbox when those bloggers start sharing their in-store experience with the audience. Filled with glitz and glamour, swelling population and also coupled with the rise of Hollywood, Los Angeles will be a limitless opportunity because of its major tourist attraction, which works in favor for Birchbox as it needs to be located in large metropolis areas that experience rapid demographic growth.
REFERENCES
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6 Beauty Subscription Boxes That Are Actually Worth Your Money. (2015, April 9). Retrieved October 3, 2015. Battle of the boxes: Ipsy vs. Birchbox. (n.d.). Retrieved October 3, 2015. Birchbox is boosting competitors’ sales-for now -. (2015, August 5). Retrieved October 3, 2015. FAQ | BeautyArmy. (n.d.). Retrieved October 3, 2015. How Birchbox Uses Instagram Influencer Marketing to Sell Physical Products | fullbottle. (2015, September 9). Retrieved October 3, 2015. How Green Initiatives Can Benefit Your Business - Bplans Blog. (2014, October 2). Retrieved October 3, 2015. How to Use Birchbox Points. (n.d.). Retrieved October 3, 2015. The 11 Things Every Birchbox Subscriber Must Know. (n.d.). Retrieved October 3, 2015. Which Beauty Subscription Box is Right for You? | Daily Makeover. (2015, June 29). Retrieved October 3, 2015.