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Focus Beauty boxes s Birchbox stepped into brick-and-mortar retail with the opening of its first store in New York last year n n n match their skin type or color or are not market could well mean others will go out of element. Birchbox for example, already sells items that they would use. Nailbox.co.uk’s business. Observers add that this will leave the on its website and the company opened a Whitmore says however, that because the retail market with a range of good, strong players. store in New York last year, which it says marks price of the box may be three, four or even fve It is also likely that these strong players will the beginning of its multi-channel retailing times what customers pay for, they’re not look to international expansion either through strategy. It also launched pop-up stores in always overly concerned if there is one product setting up their own operations or through Paris (the company is said to be considering a they don’t want in the box. buying local players. (Birchbox for example, is permanent brick-and-mortar store in France). This will always be a risk, but industry These pop-up stores were not just about selling is because samples are customized to the “ building brand awareness. Also in this vein, however, but were also an important tool in watchers say that the box companies need to do more to offer more customized products to Birchbox launched vending machines in Paris’ consumers. Birchbox claims part of its success Too many beauty boxes year, which served as a good advertisement for member’s profle. Products are based on users’ are clearing out old high-traffc Montparnasse train station last skin and hair types and cosmetic preferences, merchandise or items the company. ensuring members receive a box of samples that don’t sell. Beauty However, some question whether these box tailored to their particular needs. Meanwhile, subscription boxes companies will also be able to become retailers. Beauty Army claims to be the only beauty box They point out that websites trying to take on company that allows consumers to choose should be used strategically the logistics, inventory management and service their own samples, which minimizes the risk as a way to introduce of a retailer are setting themselves up for failure. of disappointment. The company claims the There is also the issue of brands’ reluctance service offers a higher conversion rate, of new brands and products to sell their full-sized products on beauty box around 10 to 20%, than those that send out to consumers websites for fear of angering their traditional less targeted samples, whose conversion rate is retail partners. And there are few barriers ” around 5%. to entry to the beauty box market, meaning established retailers themselves could simply What’s next? Essentielle Beauty founder Megan Jones add this service to their offer. How will the beauty box market evolve? Whatever the model, it seems that beauty Analysts say that given the increasingly crowded boxes are here to stay, for the near future at market, there will be a shakeout with either the already in six markets). In Asia, there is said least. This is especially true given the strong leaders buying smaller groups (as was the case to be a good deal of unexplored potential for link these companies have with consumers on with Birchbox’s acquisition of French company this concept. the web and also because they could serve Joliebox in 2012) or the opportunists simply Industry watchers predict the beauty box as that all-important sampling opportunity for going out of business. Sephora’s move into the model will evolve to include a strong retail online sales. n 116 November-December 2015 - N°24 - BW Confidential