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Ruth Marlow N0642518 3,973 words Brand Environment FMBR20002 Work Experience Placement BA (Hons) Fashion Marketing and Branding Nottingham Trent University I confirm that this work has gained ethical approval and that I have faithfully observed the terms of approval in this project.
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contents
Introduction Ethics clause 2 Introduction 4-5 Methodology 6-7 Situational Analysis Macro Environment Macro trends 8-9 Market 10-11 Competition 12-13 Brand Overview 14-15 Architecture 16 Target Customer 17 Health 18-19 Recommendations Key insights 20 Brainstorm 21-23 Recommendations 24-33 Conclusion Conclusion 34
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introduction This report will highlight key opportunities for the health and beauty subscription box and online retailer Birchbox UK that strategically align with their goals. An assessment of the macro-environment, beauty industry and competitive landscape will bring forward key trends and insights that can aid Birchbox’s extraordinary growth and address their biggest barrier to development - awareness. The recommendations will be presented as a communication plan to present the imaginative and innovative ideas. The detailed plan will focus on the full marketing mix with input from a wide range of research and industry insights. Launched in the United States in 2010, Birchbox offer an efficient, personalised way to discover and shop for beauty and health products. Birchbox redefined the online shopping experience by pairing a monthly subscription of prestige (high quality/price) samples- tailored to beauty profiles- with inspiring editorial content to create a seamless path to purchase full-size products online. In 2014, Birchbox opened their first permanent retail store in New York and launched in the United Kingdom. They launched in Ireland in 2016 and opened another store in Paris this year (Appendix 6).
May 2017
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my experience
Many aspects of this report will be sourced from a placement in the PR & Partnerships department as industry experience at the UK Headquarters in London. The team has a great culture and is made up of thirty staff. The placement tasks were exciting, fast-paced and while challenging, they provided many opportunities for learning. Duties of significance were: Active participation in brainstorms, workshops, meetings and weekly UK team updates Planning and hosting partnership launch events with press and influencers Assisting in social media events Contributing creative ideas to marketing strategies Monitoring and recording editorial credits Managing the creation and distribution of press releases
Arrow Sculpt Tinted Brow Gel £14.50
The Estée Edit Pore Vanishing Stick £21
Marc Jacobs Re(Cover) Perfecting Coconut Setting Mist £25
TRENDING NOW
scanning press coverage
LES COPAINS
AT H L E I S U R E SKIN Pairing off-duty comfort with a sense of luxe well-being, the athleisure movement is making its mark in beauty, too. From Chloé and Isabel Marant to Les Copains and Michael Kors, this season’s runways were flooded with buffed, glossy, freshfrom-exercise faces. Want in? The secret is to begin with your skin, says Estée Lauder make-up ambassador Lynsey Alexander. ‘You’ll achieve a sense of glow, not sweatiness, by mattifying areas of the face that risk looking shiny. Pick a stick or liquid base, instead of powder.’ Then brush up brows, and play with high-shine finishes applied to lips and lids. From barre to brunch, you’re good to go.
Grazia coverage for Arrow
Words: Phoebe McDowell. Photos: Jason Lloyd-Evans, Marco Vittur, Gianandra Traina. Arrow: birchbox.co.uk. Beauty Pie: beautypie.com. Eyeko: eyeko.com. Jillian Dempsey: thisisbeautymart.com. MAC: maccosmetics.co.uk. Marc Jacobs: harrods.com. The Estée Edit: selfridges.com
GRAZIA HEALTH&BEAUTY HEALTH
CHLOE
Instagram sponsored post MAC Limited Edition Work It Out! Crystal Glaze Gloss in Love Your Body £18
Jillian Dempsey Lid Tint in Smoke £22
Eyeko Sport Waterproof Mascara £19
MICHAEL KORS
Beauty Pie Incrediblur Instant Retouching Foundation £24 or from £3.46 for members
ISABEL MARANT
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off to Vogue House
networking at partnership launch
Creative Director Jess Diner at FB live
Boden headquarters for FB live
contour & highlight tutorial
distribution negotiation of -19%
Birchbox cake on Instagram
meeting at Chiltern Firehouse
office visitor
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methodology Primary Quantative Online Survey Sample: 12 Birchbox customers aged 20-40 Aim: To understand the Birchbox customer and test ideas Objectives: - Brands they find engaging - Gain a response to how customers view brands who create communities with their customers - Interest in ingredients in beauty products - Knowledge of the certification of ingredients in beauty products - Elements which would excite them to attend a branded event Questions - How confident are you in beauty? - Are you currently a subscriber to a beauty box? - Do you like it when brands create a community with their customers? - Do you find product recommendations useful when purchasing beauty products? - How conscious of the ingredients in health and beauty products are you? - How certain are you of the meanings of the terms organic, natural and vegan? - Do you actively follow your favourite beauty brands and influencers on social media? - Would you be interested in attending an offline event hosted by Birchbox? Winnings - High participation considering difficulty of contacting customers directly - 70% of respondants were uncertain about ingredient certification which is the same as Birchbox’s survey result - Relevant and useful suggestions for event ideas Learnings - Some answers could have been explored further in a qualititative interview - When directly asked questions the response may vary to their unconscious behaviour (what they think they would do and what they would actually do) Qualitative Interviews Beth Thomas, Senior PR and Partnerships Executive Aim: To understand more about Birchbox and thier target customer/previous events Reflection: The interview greatly helped with the understanding of the company and their normal practice. Insights included offline events had been a great success and that they are looking for more ideas on how to include customers in the future events. Lucy Sherwood, Operations Director Aim: How do Birchbox monitor convenience for the customer in relation to operations? Reflection: This interview concluded that due to being a small business Birchbox would struggle to offer rapid delivery options (same/next day) but acknowledged that Birchbox could improve their options and if they offered more convenience it would be more appealing to the target consumer. Netnography Understand the market, trends, event and influencers. Social media helped greatly in understanding trends and how different brands/consumers interpret them. Looking at Birchbox’s channels it became apparent that their blogger network is not very utilised or promoted at all. Ethnographic Holistic understanding of the business and how the departments interact. Weekly office meetings saw each team discuss and present their activity for the week and their winnings/learnings. Here identified areas of the business which needed focus to improve and grow. It also made risk identification and feasibility more efficient.
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Secondary Birchbox Access to Birchbox’s files provided an incredible insight into the real company statistics, their strategy and goals. To be as accurate as possible all information about Birchbox is directly sourced. ICM Market Research Agency Sample: 2,000 nationally representative mix Date: Febuary 2017 Aim: To understand the barriers to subscription, attitudes to life and beauty as well as the identification of target customers. This current research greatly helped the understanding of Birchbox within the market – identifying their competitors and strengths/weaknesses. The attitudes to life and beauty helped to segment the potential customers in the beauty majority into five personas. The five personas were analysed to identify the most appropriate and attractive group. Mintel The Mintel database is an accurate and reliable source of information. The reports gave great understanding of the UK Beauty and Personal Care (BPC) market, key players, consumer attitudes and behaviour. Trends highlighted in this report helped to shape the recommendations. Office of National Statistics The UK’s largest independent producer of official statistics and the recognised national statistical institute of the UK offered accurate information about macro trends and consumer behaviour. Print Media Magazines and newspapers were used greatly to understand trends such as health and well-being. Including: Telegraph, Mirror, Red, Independent, Financial Times, ELLE and Harpers Bazaar.
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macro trends The macro environment is the condition that exists in the economy. In the last few years, increase in technology-dependency has rapidly changed consumer behaviour, while the economy suffered from a medley of inflation, political and economic uncertainty. Intensifying competitiveness has led to raised pressure for businesses to produce more for less (Business of Fashion, 2016). These disruptive forces continue to provide both the challenge, but also opportunity, businesses must innovate and be bold to stand out in their sector. Businesses of small size or agile models have succeeded by reacting quickly to these changes while offering percieved value and convenience. (Appendix 12) UK Economy Outlook 1.6% GDP growth in 2017 2.8% CPI inflation in 2018 2.0% consumer spending growth in 2017 (pwc, 2017)
Technology One of the biggest and undeniable trends of 2017 is technological innovation. 87.9% of adults in the UK have recently used the internet (ONS, 2016) and by 2020 it is expected that 6.1 billion people will have a smart-phone (Global Connections, 2017). These statistics give an impression of the magnitude of technology within the economy and consumer’s lives. Virtual, Augmented and Mixed Realities Transporting customer to new branded worlds Retailers are beginning to experiment with virtual reality as part of their marketing efforts, including Tesco, New Look, Topshop and Disney. In 2015, Birchbox Man US included a cardboard VR viewer with packages, which allowed subscribers to view 90-second video clips of high-adrenaline experiences. The VR viewer aimed to engage consumers with content in a new and unique way. The viewer directly helped US media coverage and brand awareness above the previous year – benefits the UK would like to replicate. Rapid Delivery Tightening the gap between ‘want’ and ‘get’ “Advances in digital technology are revolutionising the way people find, choose and pay for goods and services.” (Global Connections, 2017). As consumers become more impatient, brands race to satisfy their demands. Amazon have 66 billion ‘Prime’ subscribers (53% YoY growth) (Recode, 2017), who enjoy unlimited rapid delivery. 76% of UK shoppers use ‘Click & Collect’ (Econsultancy, 2017) to order online and collect from store or collection points from brands such as John Lewis, Asos, Missguided and L’occitane. Birchbox should constantly review their delivery options and consider the convenience to customers as they are predominantly an online business in the high-paced beauty sector so delivery is a key aspect to keep under review. (Appendix 2)
Some of the 103,000 Birchboxes ready to be shipped from the warehouse in April
YouTube tutorial for VR viewer as part of their amplified promotion
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Amazon dominated 36% of Online Black Friday sales in 2016 (techcrunch, 2016)
Community Creating a positive brand space in consumer’s minds To succeed in the competitive environment, brands must cut through the noise and create brand moments that feel authentic and inspire organic word-of mouth (Marketing Week, 2016). Offline Experiences A crutial part of omni-channel brand experience “A key brand challenge is optimising the customer experience in both the physical and digital realm.” (Propoganda, 2017). This is particularly significant to online brands such as Birchbox as without retail stores it is harder for customers to forge an emotional connection and brand loyalty (Forbes, 2017). Birchbox’s brand experience strategy incorporates offline touchpoints with focus on influencers (to build relationships and awareness through circulation) but there is opportunity to engage offline with consumers directly.
airbnb magazine
Missguided store
Benefit Brow Mobile
Topman magazine
Snapchat glasses
Recommendations Utilising a trusted voice “78% of consumers trust social peer recommendation” (Business2Community, 2016) The primary survey concluded 100% of Birchbox customers find reviews and recommendations influential. Birchbox recognise this and use product ratings and reviews on their website. Birchbox also add a note to the product review if the customer sampled the product or re-bought after sample - this positively adds to a well-informed purchase. Further research discovered that cosmetics company Lush categorise their reviews into: most helpful, highest rated and latest. Birchbox could explore more ways to categorise reviews. Influencers Bloggers and social media influencers have an undeniable place within the beauty industry. For many, their opinions are more trustworthy than advertising, this is because consumers are persuaded by their: “similarity, likeability, attractiveness, expertise and trustworthiness.” (Cosmetic Business, 2017). In the last few years, brands realised their persuasive power and began to pay influencers to promote them. The use of paid ads has increased by 93% over the past year but here 70-80% of users ignore paid ads and only focus on organic results (Demand Gen, 2016). This shift is changing focus from bloggers to micro-influencers: “As shoppers increasingly turn their back on commercial bloggers, influencers are stepping in to swap shoppers opinions” (Drapers, 2017). Birchbox introduced ‘Birchbloggers’ in 2014 as a network designed for smart, funny women with beauty knowledge, the website advertises “You’ll have lots of exciting opportunities to get involved with, from products to review to exclusive invites…”. During the placement, members were sent the box during the monthly mail-out but there was no other interaction. Netnography revealed little promotion of the network across their social media and blog. Birchbox have established a network with a huge potential for engaging content and new customers/subscribers but need to build a strategy to optimise their influence and credibility.
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market Beauty and Personal Care The BPC market grew by 0.4% in 2016 to £9.8 billion (Mintel, Beauty Retailing 2017). The marginal growth was a balance of factors which increased and decreased market spend, including: Savvy consumers With aid from technology, consumers can now compare offerings and seek promotions more easily than ever (Mintel, 2017). ‘Selfie’ culture Influenced by aspirational social-media images, consumers aim to create specific looks, with the help from tutorials and information on blogs and YouTube. This behaviour boosted facial make-up and technique-based products (Euromonitor, 2017). Subscription The concept of subscription is mostly familiar among consumers, particularly with print media. But as the magazine market dropped 6% (Campaign Live, 2017), e-commerce subscription grew over 3,000% (Huffington, 2017). Birchbox pioneered the subscription box model and have seen countless brands follow. For consumers, convenience and newness are key, a demand which is set to increase (CNBC, 2017). Clean Beauty Evolved from the ‘health and well-being’ trend, consumers have adopted a holistic approach to maintaining a clean lifestyle and are as concerned with what they put on their bodies as much as what goes in it. These include natural, organic, vegan, cruelty-free and fair trade BPC products. Influencing Factors - Rise in allergies and sensitive skin - Interest in ‘green’ and ‘minimal’ living - Increased pollution - Popularity of veganism/vegetarianism (90% increased searches. Google Trends 2016) - Consumers better informed on health impacts, origins, processing and environmental footprints (Euromonitor, 2017) Proof “56% of 16-24s look for natural ingredients” (Mintel, 2017) “Searches for skin care are rising 31% year on year, and over half are natural-ingredient based” Karen Flavard-Jones, Garnier with Mirror, 2017. Innovations include Elemis mindfulness range and Spectrum’s vegan brushes. Consumer expectation “I expect beauty brands to offer organic and natural products and cater for vegans.” What’s next? The clean lifestyle trend is expected to evolve with innovations such as anti-pollution products and relaxation activities like clean sleeping (Euromonitor, BPC 2017). There is growing concern over product certification which is expected to highten consumer interest: “We found...uncertified health and beauty products with potentially misleading labels which use the terms organic or natural” (Soil Association 2017). Consumers will care more about ‘do good’ brands: “As consumers develop a more comprehensive understanding of issues like sustainability, authenticity and brand transparency, brands and retailers are being forced to change the way they sell in order to survive” (Hoang, L. 2016)
BBC perfect body documentary
OK! magazine recipe
Instagram ‘memes’ 10
David LLoyd Napercise
Telegraph article
NEW! Ingredient Conscious category at The Birchbox Shop
This is the press release I devised, briefed to the creative team and sent to over 200 contacts.
Birchbox has redefined the retail process by offering consumers a personalised way to discover, learn about and purchase the best beauty products online. Now, an Ingredient Conscious category has just launched at the Birchbox Shop, in response to our community’s feedback that they have limited time to search for more natural brands to add to their beauty routines. The new category includes products that are natural, vegan and organic and includes Beauty Protector, Nuxe, Caudalie, LOC and more. This Ingredient Conscious category joins other existing popular shopping categories on the Birchbox Shop – K-Beauty, Vegan, Sheet Masks and more – all designed to make it easy, efficient and fun to shop for beauty and discover new products. 1
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Jessica Diner, our very own Content and Creative Director, says: “When nature meets science in beauty, good things can happen and, at Birchbox, we know from the subscriber beauty profile survey that 70% of our subscribers are wanting to discover more about natural beauty. That is why we have put together this edit of vegan, natural and organic products that don’t compromise on efficacy. It’s the best of both worlds.” 7
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1. ARROW Tinted Brow Gel (£14.50) 2. LOC One & Done Shadow Stick Trio in Piece of Cake – Worth £30! (£20) 3. Obsessive Compulsive Cosmetics Tinted Moisturiser (£26) 4. John Masters Organics Bare Unscented Shampoo(£15) 5 5. Yes To Coconut Hydrating Cleansing Wipes (£3.99) 6. Balance Me Congested Skin Serum (£16) 7. Vita Liberata Ten Minute Tan (£29.95) 8. Beauty Protector Protect & Detangle (£18.50)
@BirchboxUK #BirchboxUK birchbox.co.uk 11
competition Birchbox’s positioning is so unique within the UK beauty box market they don’t rank the competitiveness in the segment as high (appendix 1), instead they focus on health and beauty online retailers. Avon and Boots are top of mind beauty brands which mean they have high brand awareness. However, Birchbox has the highest awareness of the competitive set, both prompted and unprompted. ((Appendix 13) Boots Competitor Analysis Birchbox’s top competitor is Boots. They have a very strong portfolio, particularly of luxury and prestige brands, which are valued and trusted by their target consumer - who is simialar to Birchbox’s. Boots yearly sales exceeded £7 billion in 2016 (Mintel, 2017). Their success can be linked to 3k UK stores, loyalty system, strong assortment of products and services from prescription medication to opticians and insurance. Boots.com was ranked the top site (42% value share) for health and beauty specialist retailers, it received an average of 20 million visits monthly (2015/16), up 5.3% from the previous year (Mintel, 2017). Birchbox cannot challenge the level of convenience that Boots offer. Instead, they can win by helping customers find the right products for them, enabled by personalisation (box), merchandising (featured categories, quality reviews and relevant content). Online Competitors Analysis The graph ranks speciality online retailers in accordance to: degree of curation, luxury positioning, size of assortment, convenience and offers/discounts. Look Fantastic promotes a monthly subscription box; employing the same idea of ‘curation’ and ‘experimentation’ as Birchbox, to activate a purchase on site. Both FeelUnique and Amazon have tapped into ‘recurring-revenue’ model with “Subscribe & Save” features which allow users to sign-up for routine-purchases /replenishment CultBeauty leads in curation, with a strong and particular assortment of products, which can be often be difficult to source in the UK.
Feelunique recruit new micro influencers via Instagram
Lookfantastic partner with Benefit for exclusive box
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Cultbeauty add new and exclusive products to assortment
In order to raise competitiveness within the market sector, Birchbox must differentiate their positioning by building a curated yet comprehensive assortment with a focus on prestige brands. Growth will come from owning the centre of the market and leveraging exclusive, international discovery brands to stand out. To challenge competitors Birchbox must build an unbreakable connection with their customers through memorable brand moments, exclusive offerings and perceived value/convenience.
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overview Birchbox pioneered the ‘Try, Learn, Buy’ model that attracted almost countless subscribers and brand partners who connected instantly with the content-driven discovery experience and seamless path to purchase (appendix 2). The model has been copied by many businesses from sectors including food & drink, automotive, books and crafts.
try
learn
Strategic Sampling Birchbox deliver subscribers five health/beauty products inside a beautifully designed box each month - mix of full and sample sizes. The products are personalised to the subscriber’s skin, hair, and style using an algorithm formed from their beauty profile and online analytics.
Amplified Promotion Each box contains an ‘inbox card’ that welcomes the subscriber to the box and gives an explanation to the theme, products description/use and other information.
The box is £10 plus £2.95 for postage; there are monthly subscriptions (free to cancel any time) as well as six-month and one-year packages. Personalisation is incorporated every month with a choice of either box design or product. Subscribers can also add an additional product (BB+) to their order. The Birchbox portfolio consists of around 200 brands. Their identity is considered when assigning to subscribers – “if Estée Lauder is only interested in millennial consumers, we can send their products only to under 27s” Savannah Sachs, Birchbox Managing Director, 2017. This is also an attractive element for brands.
Birchbox is proud to have over two million customer reviews across their websites. As well as aiding well-informed purchases they help build the Birchbox community. A significant part of beauty education takes place through online tutorials and discussions across their online platforms. The purpose is education for the semi-proficient customer. The online interactions also help build the brand community and their interactions help Birchbox acquire new customers.
buy Curated Assortment To ensure a convenient path to purchase, all sampled products must be available for customers to replenish at birchbox.co.uk - a unique selling point, as most subscription boxes do not retail all samples. Birchbox differentiate themselves by organising their website into categories rather than brands. Around half of subscribers shop on the website, often to replenish samples which increases their prestige beauty spend by 87% in one year. (Birchbox, 2017) Brands achieve average conversion rates of 1-6% through website sales - making partnerships highly profitable as well as highly raising awareness. (Birchbox, 2017) Orders are sent to customers and delivered standard or express by courier service
Birchbox partner with brands from Tatler, Papier, Coach and Boden to maintain a refreshed and innovative image. Partnerships also offer both sides new audiences and data capture opportunities. Vision 1. Be the best beauty box by delivering 12 amazing monthly boxes to efficiently drive demand 2. Differentiate the online shop by building a home for the profitable beauty majority 3. Build an effective and happy organisation that can deliver big goals. 4. By 2021, to have 350k members and £9 million in revenue. Purpose To create a home for the Beauty Majority that meets her needs and inspires her wants Essence Discovery, Inclusion, Expression, Personalisation Promise To overcome the limitations of the internet by taking something consumers had historically received for free - samples and creating a more enjoyable, curated experience. (Birchbox, 2017 - Appendix 10) 14
okes and dabs
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BEAUTYCOM LTD
architecture
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target consumer At the core of Birchbox’s essence and strategy is their target consumer, they ensure that everything they do is specific, relevant and targeted to her. They take into account her likes, needs and wants and apply this to everything from user experience to product offering, influencers and partnerships. Birchbox’s success is driven through a focus of targeting a new customer category for beauty – ‘casual, everyday beauty consumers’ who was previous overlooked as the beauty industry has catered to ‘beauty junkies’ (women who are passionate about beauty and spend the most on it) that make up 10% of women (Birchbox, 2017). Birchbox is uniquely able to reach the previously less engaged beauty majority by giving her a more relevant, efficient and educational experience. (Appendix 11) The Beauty Majority This group makes up 75% of women and is discussed by the Birchbox CEO, Katia Beauchamp; “we’re actually awakening a new consumer who has not been excited or passionate about the beauty industry before Birchbox...we’re able to change her behaviour and unlock her spending power” (Birchbox, 2017). Though she has limited skills, beauty is a fun part of her daily routine and is willing to learn the rest. She aspires to look like the best version of herself and is willing to invest in products that will get her there. She is represented by the persona ‘Sarah’.
female
Sarah
lives with husband and one young child in suburbs outside Manchester
decent disposable income
thirtyfour
enthusiastic but grounded
senior manager in Retail HR
Social Media Posts on Facebook and Instagram Scrolls through Twitter Plans home projects on Pinterest
drives everywhere for convenience
Beauty Profile Within top tier of the beauty majority Semi-proficient in beauty knowledge Not dedicated or advanced in beauty More aware of Birchbox than average and most likely to subscribe of all the beauty majority Time-poor but wants to maintain look she had when she had more time
good at managing money
smart & grounded
Attitude to beauty Morning routine makes her feel confident and prepared for the day Prefers well-regarded brands Likes time saving products Convenience is key and she is prepared to pay for it Finds beauty it fun Likes/needs tips and advice Likes to keep up to date with trends Tries trends out but doesn’t always build them into her daily routine ((Appendix 11)
but not afraid to have fun
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brand health This analysis will outline and underpin the rapid business growth of Birchbox which has huge market opportunity. They closely monitor their success of all areas of the business:
E-Commerce
Subscription
Overall
£26.00 average order value
94% YoY growth of subscribers
£280K profit
£1,384,867 annual revenue
11% average self-cancellation
Cash flow positive
175% YoY growth
Awareness Are consumers aware of Birchbox and how does this translate in the market? Generally, there is low awareness for beauty subscription boxes. Research suggests that for those who believe they would subscribe, awareness has been the key barrier to them doing so. Out of the many barriers (price, appeal, style etc.) this is the least challenging to rectify. (Appendix 11) Birchbox have the highest brand awareness of the competitive set, both prompted and unprompted (Appendix 11). This success may be a result of the following: - High subscription (103k) and email database (240k) - Excellent portfolio of brand partners - Online shop with box replenishment - Multi-channel marketing - Successful offline events Usage What proportion of consumers have a subscription?
Birchbox
Glossybox
LookFantastic
10% have a subscription
7% have a subscription
8% have a subscription
14% had a subscription
16% had a subscription
4% had a subscription
9% brought on the website
13% brought on the website
29% bought on the website
without subscription
without subscription
without subscription
Glossybox have more previous subscribers and less current, making their customer less loyal/valuable. LookFantastic have higher competitive rivalry in association with website over subscription. (Appendix 11) Most excitingly for Birchbox, research uncovered that 1 in 20 likely to subscribe for themselves and equal numbers likely to subscribe for gifts. This results in a potential UK market size of 1 million+ customers. (Appendix 10) Perception How do consumers perceive Birchbox? Ratings Independent reviews of the brand 8.4/10 Trust Pilot (288 reviews) (Appendix 4) 4.5/5 Limited Edition Boxes (average) Customer service Helping customers in need and satisfying those likely to give off a negative brand perception 82% satisfaction (average) 24-hour service level agreement Social Media YouTube has 264,000 results for ‘Birchbox Unboxing’ and Birchbox have 2.1k subscribers. Instagram has 77.3 followers, 316 average likes per post, 11 average comments per post and #BirchboxUK recieves 1,500 average uses per month. 18
UK No. 1 Beauty Box Brand touch-points Customers also perceive brands positively or negatively through brand moments. Birchbox understand that events create these moments, increase awareness and promote positive brand perception. Recent events Boden launch-£1,000 Paris Store trip-£8,000 Millie Mackintosh-£9,100 Christmas partnership-£3,200 Selfridges BYOB-£2,000 The events “drive brand awareness, we aim for least one buzz-worthy brand moment that excites press and consumers and drives a drumbeat of coverage throughout the year” Beth Thomas, PR & Partnerships Executive (Appendix 8) Insight 80% of events are exclusive to press and influencers, whose outputs and opinions have great influence on consumers. However, Birchbox’s USP is beauty education for their inclusive community so there is an opportunity for the upcoming events to greater reflect this. 19
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Economic uncertainty and decreasing disposable income means consumers prioritise value Technological innovations have allowed consumers to demand and expect convenience Online brands use offline touchpoints to connect with consumers To reach potential market size Birchbox must continue to innovate and increase brand awareness Recommendations influence Birchbox customers to purchase Customers like brands who build communities and go the extra mile to make them feel like insiders 71% of subscribers are interested in ingredient conscious products but are uncertain on the certification
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brainstorm
1 - Permanent Retail Store A retail store would increase brand awareness and attract a new audience. However, there is concern over the stability of the British retail environment and consumer preference to online.“52% of shoppers taking enjoyment from browsing and testing new products in-store and 36% would be interested in using in-store beauty services” (Mintel, 2017). Birchbox could have in-store beauty services like facials, make-up tutorials and skin/hair consultations which would seamlessly link to their ‘try before you buy’ value as consumers would test products first and really engage, experiment and learn. Response: Interview with Essential Retail, Managing Director of Birchbox UK, Savannah Sachs (2017) stated that there are no upcoming plans to open a UK store currently but it is being considered for in the next five years. 2017 Strategy Report also outlined the rejection of the idea to create a permanent retail space (Appendix 10). Interview with staff concluded that the objectives can be met via other offline events and strategies (Appendix 8). Further research into other e-tailers revealed ASOS felt opening a store would be “counterintuitive” and instead should focus on the offline part of their omni-channel strategy (Campaign, 2016). The idea is likely to take place but not in the next three years.
2 - Ingredient Conscious Event to educate consumers on natural, organic and vegan health and beauty products. Guests can try/buy products and build their own Birchbox (BYOB). Birchbox will host seminars giving relevant knowledge to further inspire and educate by a strategy of influencer marketing which will attract media attention and capitalise on the ROI via exposure. The event will be themed with wood, foliage, pastel colours and branding. The monthly box will be themed accordingly. Response: Online survey confirmed the idea would be well received by customers and suggested industry experts offer services/Q&A. Staff Interview discovered that press will attend events if there are free treatments/classes that generate great PR stories (Appendix 8). Further research found the box theme for Autumn is already confirmed (invite in inbox card). Overall, very good response from customers and staff highlighting the potential to create buzz, increase brand awareness and portray Birchbox brand values as valuable, exciting, friendly brand that is pioneering trends.
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3 - Technological Innovation Birchbox to include a VR (Virtual Reality) viewfinder in the monthly box which would show customers an immersive and interesting beauty tutorial. The idea pushes the boundaries of the ‘learning’ aspect of the brand essence and would be a first to market strategy to the UK beauty subscription market. The product would only be sent to subscribers not all website customers therefore encouraging new subscribers to become involved and receive the exclusive experience. The idea is perfect for Sarah as she isn’t fully confident to independently try new beauty products/tips but is willing to learn. (She may not have experienced VR technology yet and would find this an exciting and engaging experience. This would spread word of mouth offline and online again increasing brand awareness. Response: Could be innovated beyond the US version (multiple tutorials to choose from ranging from different beauty looks or categories i.e haircare or the ingredient conscious collection). Further research into response to US proved positive with high media impressions (1+ million). This idea would increase brand awareness through media coverage and excite current and new subscribers. Birchbox have the technical capabilities but essentially it is a small strategy.
4 - Birchbox Community Birchbox to extend their product review features to be more helpful, engaging and experiential. The short videos will be from customers, staff and the blogger network ‘Birchbloggers’ with the intention to inform the customer to make the right purchase decision based on their beauty profile characteristics. Search requests for beauty product reviews have soared in the last few years as consumers increasingly rely on the opinions of fellow shoppers before making an online purchase. Response: Further research into the capabilities to personalise the videos to the individual’s profile (e.g. fair-skinned customers would receive reviews tailored to their needs). Further thought concluded to focus just on the Birchbloggers. Positive feedback from staff with note that this level of personalisation would take 2-3 years (Appendix 7). Further research to beauty giant L’Oreal that reviews made on products increase conversion rates by 50%. It is a metric which they are aiming to double by 2020. (Forbes, 2016). Overall, the idea is a unique and appropriate offering. Personalisation would take longer to implement.
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5 - Convenience Re-imagined Birchbox to increase convenience by offering varied delivery options. “Rapid developments in technology have raised consumer expectations online. A shopper now demands a high level of service, speed and a unique experience with just one swipe of a finger.” (Hoang, L. 2016). Birchbox to offer standard delivery & collection, next day delivery & collection and precise delivery so the customer can pick an hour time slot. Response: Staff agreed that delivery options are limited compared to other e-tailers and are important in reflecting brand values. As a small-medium enterprise the operational changes will take 1-3 years.
justification All shortlisted ideas reflect Birchbox’s vision and strategy as well as the key insights explored in this report. With an analysis of the feasibility, opportunity and execution of the ideas (Appendix 3) it is clear that ideas two (Ingredient Conscious) and four (Birchblogger Tips) are most likely to provide the appropriate results.
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strategy
Aim To increase visibility, credibility and brand awareness of Birchbox’s category ‘Ingredient Conscious’ with a focus on consumer learning and discovery as well as customer acquisition. Objectives - Educate consumers on the properties and effects of beauty ingredients - Hero relevant brands - Help consumers to understand their beauty profile and improve accuracy - Deliver an engaging and authoritative experience that will generate media coverage and incite social activity - Recruit everyday brand advocates/ambassadors - Build and position Birchbox as a beauty destination to discover organic, vegan and natural products - Increase brand awareness (break down barrier to subscription) Introduction Birchbox will host a pop-up event in Covent Garden, London for two weeks in September 2017. The event will educate consumers on the classification, meaning and effects of natural, organic and vegan products/ingredients. The event will be open to the public, press and influencers. Knowledge and advice will be shared through brand representatives, market experts and special guests. Fun and trend-influenced events will run to maintain momentum and encourage content sharing. Market experts Jessica Diner, Content and Creative Director at Birchbox. Jess was previously a beauty editor at Vogue, she recieves a substantial amount of press attention and is often featured on the Birchbox channels. She will introduce and promote Birchbox as a destination for ingredient conscious consumers and share personal tips. Dr. Sam Bunting, Dermalogist London-based cosmetic dermatologist specialising in clear skin, she is widely considered to be the beauty insider’s bestkept secret and is passionate about making advice more accessible. She is to discuss skincare and ingredients. Tania Grier, make-up artist Deliver insight into ingredient conscious cosmetics and their properties while undergoing a live demonstration with a guest to create a natural and flawless look with Birchbox products. Brand representatives Birchbox brands to deliver insight into their brand ethos, products ranges and ingredients. Live Q&A with guests and guests who cannot attend can send questions via Facebook Live. - - - - -
Rebecca Hopkins, Balance Me Mathilde Thomas, Caudalie Lance Kalish, Yes To Jane Harper, Paula’s Choice Noella Gabriel, Elemis
Special guests Millie Mackintosh Millie partnered with Birchbox in July 2015, the box was a great success for awareness and her passion for clean lifestyle is a perfect fit. She will discuss her journey of health and beauty. The previous partnership demonstrated she has a huge following and public interest. Chessie King Chessie is a health, fitness and beauty influencer. She is part of ‘Two Peas in a Bod’ and has worked with Birchbox individually in Facebook videos, building a great relationship with the team. She will take-over a pilates session then speak about her favourite Birchbox products.
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Events BYOB (Build Your Own Birchbox) For £15, guests can customise a box by selecting their own products. To be positioned after educational talks to allow guests to make well-informed decisions. The BYOB concept is used in Birchbox stores and in Selfridges Beauty Workshop pop-up. Customers will enjoy the experiential offline activity that attracts coverage. Additionally, this will aid the acquisition of brands to the Birchbox portfolio as offline opportunities build relationships and often lead to involvement with future campaigns. Marketing to contribute to cost. Birchbox Profile Consultations Professionals will use a series of lifestyle and beauty questions to focus on areas the guest is concerned with. The information will be stored via tablet and emailed to guest for their record. If a subscriber, the information will update their profile, making sampling more personalised. Information will also be used in marketing and Facebook ads. Yoga and Pilates classes with Triyoga Partner with yoga company to offer free classes to guests. Gift ‘Arrow’ products (Birchbox’s ingredient conscious inhouse ‘Athleisure’ brand) to encourage them to use during exercise. Marketing to contribute to cost. Relaxation Room with This Works Partner with the natural skincare brand that pioneered formulas based around the body clock to optimise skin performance. The room will be beautifully relaxing, calm and give consumers a space to wind-down while they are encouraged to leave their technology in secured lockers. Marketing to contribute to cost. Refreshments Treat the skin from the inside out with seasonal and fresh salads, hot dishes, juices and smoothies to make sure guests feel satisfied, nourished and energised. - Detox Kitchen (previous event partner of Birchbox) - Botanic Lab - Ethos
Birchbox & Detox Kitchen - April
KPI’s - - - -
Blogger Paris trip vlog with BYOB
Press like events with free treatments
Body Shop skin and hair consultation
L’Oreal smart brush
500 clippings across digital, print and email features by 30th October 2017 200,000,000+ PR Coverage Impressions (Circulation and Unique Users combined) 30,000,000+ Social Impressions Track traffic to Birchbox e-commerce site through Google Analytics and affiliate reports
Budget Most product is likely to be acquired at reduced or no cost due to the exposure the event will generate. Production and events support - £10K (Marketing to support) Products - £1k Market Experts - £1k Brand Representatives - £500 Skin and Hair Consultations - £1k Special Guests (inc sponsored posts) - £3K Events - £1k Refreshments - £500 Total: £18,000 40% of yearly events budget ((Appendix 14) 26
communication While the pop-up is being constructed there will be a cover of the Birchbox monthly box to build excitement and presence.
Fresh bright flowers from Bloom & Wild used in imaginative ways . Wall or ceiling of foliage .
Clean sleeping pods . Themed blue with This27Works producys placed for guests to use .
Inbox card in the Birchbox monthly box
Kim Kardashian West’s Instagram theme of lowfi photographs inspired social trend of disposible / polariod images. They are a keep-sake for guests and will include branding.
London Beauty Expo 2017
Birchbox will Instagram story each day. To include ‘quick-fire’ questions with bloggers and guests.
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& Other Stories white/wood/green/sink
LUSH experiential store experience with d e m o n st r a t i o n skin
Millie
Chessie
New York store
Millie will be sponsored to post on Instagram
BYOB Paris store
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BYOB Selfridges pop-up
BIRCHBLOGGER TIPS
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strategy
Aim Increase engagement, function and awareness of the Birchbox community by utilising the brand ambassador network of ‘Birchbloggers’ to encourage learning and convert fans to customers. Objectives - Further personalise the purchase path - Increase brand awareness - Help customers make well-informed purchases - To improve the presence and use of the Birchbox community - Grow and promote affiliate bloggers Introduction Birchbox to extend their product review feature to be more engaging and experiental. 100% of surveyed customers found reviews useful (Appendix 9). The short videos will be from Birchbloggers with the intention to educate customers to make the right purchase decisions for their beauty profile. Products will be reviewed in relation to benefits, application, ingredients and suitability to beauty profiles. The bloggers will provide Birchbox with new audiences, raising awareness and acquisition of customers. Birchbox use ‘Editor’s Tip’ on some product, the blogger video will be underneath and will be labelled ‘Birchblogger Tip’. Logistics - Review beauty profiling segmentation to determine the customer needs that the videos must address - Re-arrange website sorting to be personalised to the customers beauty profile + monitor - AB test sales with personalised product pages against previous Open call - Social media open call to join community - Promote upcoming exciting opportunity Selection - Review and refine Birchblogger network to mid-tier only (authentic, influential but free) - Evaluate are they active, relevant, engaging, trustworthy, exclusive? - Host afternoon tea at Sketch to meet/greet 20 bloggers - Ask bloggers to send a recommendation video to Birchbox - Select 10 bloggers to feature and email confirmation - All sign licensing agreement Review - Invite 10 to Birchbox HQ and film trial video - Team review and invite UK team to view/respond - Work with brands/logistics teams to organise time to video Create - - - -
Film 5 best bloggers first video Sneak peaks on social media by Birchbox and bloggers Bloggers to vlog/Instagram story filming day Seed bloggers their products (expect them to feature in blog posts)
Launch - Meet and greet Facebook live video with 2 bloggers to build buzz and engage their audience - Birchbox and bloggers to promote via blog post and posts on social media (week of + launch date) Monitor - Monitor the response and use of videos - AB test sales of video vs non-video products - Team to decide on continuation Finalisation - Video and introduce remaining bloggers and introduce staffers (those recognised from previous use) - Continue with Instagram stories / Snapchat of new introductions to the website - Monitor response (sales and customer) 31
Ongoing Birchbox to recruit, review and retain Birchbloggers and maintain positivity around the community. Birchbloggers are to be seeded new products and can request which they prefer to review. Birchbox to devise a schedule of new/products and timings to request bloggers for filming. Bloggers will be able to film themselves and Birchbox to review. ((Appendix 14) Birchbox Promotion - Instagram stories x 100 - Instagram posts X 8 - Blog posts X 2 - Facebook Live’s X 3 - Sponsored Snapchat KPI’s - 200 clippings across digital, print and email features - 10,000+ PR Coverage Impressions (Circulation and Unique Users combined) - 20,000,000+ Social Impressions - Track traffic to Birchbox e-commerce site through Google Analytics and affiliate reports Budget Sketch meet and greet - £500 Blogger expenses - £1,000 Tech – £3,000 Total: £4,500
At the end of the video there will be links to the Birchbloggers social media accounts and the option to replay. The viewer can rate the video out of 5 stars. This will help Birchbox to analyse which bloggers are engaging. 32
Facebook Live
Meeting our new Birchblogger!
Snapchat story
Instagram post
Sketch
Birchbox to post invite on social media 33
conclusion Birchbox began with the ambition to change the online potential for beauty and the discovery experience for the beauty majority, it is fair to conclude that succeeded in both. Having pioneered the subscription box, they developed a strong position via innovation and offer extensions as they embraced trends to forge a unique position that saw the business grow rapidly. Though recognised by industry experts and cult beauty fans, brand awareness for beauty boxes is low. Research uncovered that the biggest barrier for subscription to Birchbox is awareness, the discovery has helped to focus the brand’s strategy for subscription and the online shop. This report highlights the uncertainty and instability of the economy impacting business operations and consumer behaviour. To cut through the noise of saturated markets, successful brands create authentic and clear messages to consumers. Techniques include influencer marketing and offline brand touchpoints. The Ingredient Conscious pop-up event will be a breath of fresh air within the beauty industry, there will be an exciting variety of trendy activities and special guests will engage consumers. The strategy underpins the brand essence of learning. Customer skin and hair analysis will improve the customer’s personal knowledge, helping them to make informed purchase decisions for better results. Analysis will also improve beauty profiling, a benefit that will continue post event. Beauty is one of the unique industries where its consumers have built an interconnected community by utilising technology to teach, help and learn. Influencers hold the huge power to convert fans to customers but as their following grows, often does sponsorship. There is an opportunity for Birchbox to engage with mid-tier influencers, who’s followers are statistically more engaged (Forbes, 2016). The Birchblogger Tips will positively influence customers to purchase products that are suited to their beauty profile, resulting in a happier customer who is likely to add positive reviews and repurchase – a win-win! Brining the Birchbloggers out of the shadows will open new audiences, growth awareness of Birchbox in the wider beauty industry and promote them as the helpful, kind and knowledgeable community that they are.
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THE BOX IS MONTHLY THE BEAUTY DISCOVERIES ARE ENDLESS 35
Brush strokes and dabs
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