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Focus Beauty boxes Here to stay? An analysis of how the market for beauty subscription boxes is performing and how it will evolve by Nadia di Martino fter several years on the market, the into the category. The LVMH-owned retailer have become so popular. Analisa Ariss, owner Apersonalization and surprise effect of launched its own subscription box, called Play! and founder of luxury brand Maddi Alexander, beauty box subscriptions remain a big driver By Sephora in three US cities in September. The highlights the convenience of beauty boxes for consumers, and the segment continues to move is signifcant given Sephora’s weight in being delivered to your front door. “Beauty see good growth. The leader in this area, New the beauty category, its strong relationships with halls are exciting, but also overwhelming in York-based Birchbox, now does sales of more brands (which will likely mean a superior product terms of size and choice. Beauty boxes are an than $100m, has over 800,000 subscribers and ideal introduction containing an assortment operates in six markets. Last year, the company of products that the consumer may not have secured $60m in funding, which will be used heard of or tried before. They also offer an for a marketing push and further expansion. “ effective conversion rate as the consumer Another player, Germany-based Glossybox, Consumers don’t get becomes aware of the brand and may also try now has more than 200,000 subscribers in 10 excited receiving samples other products from the range,” she says. In countries and claims to have shipped more than in a box month after short, the consumer likes the opportunity to fve million boxes. Glossybox announced that it try something new without having to pay for a turned a proft for the frst time last year—the month and that is not our full-size product, and a beauty box also enables company claimed it made a seven-digit proft approach. There may be a consumers to test a product that they want to in 2014. Glossybox also said that its consumer lot of competition, but no buy online without having to go to a store. base grew by 25% last year, while marketing costs were reduced by 33%. one is doing what we’re Consumer attraction Meanwhile, more players have emerged in the doing—they’re just sending For Amanda Bocker, secondary packaging segment in a bid to capitalize on this growth. samples in a box category manager at packaging company Nailbox.co.uk launched a box offering nail Quadpack, the attraction of beauty boxes is products in April. Managing director Nicholas the consumer experience and their ability to Whitmore comments: “As awareness of boxes transform a beauty product into something increases, so will their popularity.” A string of ” special. “They add value to a product in retailers have also entered the category with Birchbox co founder Katia Beauchamp the most literal sense. You’re taking home their own versions of beauty boxes. For example, something so exceptional it has a box especially UK-based retailer The Fragrance Shop launched made for it,” she comments. a box program several years ago called the offer in its boxes compared with competitors), The sharing part of the beauty box also works. Discovery Club, whereby every three months, its marketing might and its wealth of consumer Many women who receive these boxes are members receive a box containing fve fragrance data on what sells and what doesn’t. Another encouraged to share their discoveries online by samples, information cards on each scent advantage is that as a retailer, Sephora will reviewing and discussing their products. This can and £5 ($8) worth of discount vouchers on no doubt make major efforts to convert its have a signifcant impact on sales, given that future purchases. subscribers into buyers either at its stores or product reviews and testimonials are now said However, what could change the landscape through its website. to drive business more than traditional online of the beauty-box market is Sephora’s entry There are several reasons why these boxes advertising. Indeed, brands may make sales as a 114 November-December 2015 - N°24 - BW Confidential