Founded in 2010, Birchbox has more than 1 million subscribers across the US, UK, France, Spain, Ireland and Belgium. According to Tolleson, around 50% of subscribers also shop its online store. More than 35% of its revenue comes from ecommerce, which is the fastest-growing part of its business.
AdExchanger caught up with Tolleson and Wolf Berman in the midst of their digital-only experiment.
AdExchanger: Why did you decide to hold back on TV advertising?
AMANDA TOLLESON: Our overall strategy is around growth and driving top-of-funnel awareness. We’ve done TV in the past and it’s been successful for us, but we wanted to reach back into our history. Originally, our growth came from social and from real women sharing why they love Birchbox, making unboxing videos and talking to their friends.
Now that social platforms have developed to the point where they can really support branding-level marketing, we decided to shift money from TV – to try and do the same thing we were doing on television, but more efficiently.
ASHLEY WOLF BERMAN: Now is the right time for us to have a Facebook-focused strategy because of the ability to target. We look to see what’s resonating with the audience every day so we can make real-time tweaks. We have hundreds of creative assets that we can serve based on how people engage with different variations of the video.
What have you learned so far?
AT: We’re able to gather learnings and act on them much more quickly than with TV, where there’s a longer lag time. For example, after just a week into the campaign we could already see that one of the videos was performing better than the other at a significant level.
YouTube and Instagram are big platforms for beauty, and Birchbox is present there, but you’re also playing around with Snapchat. Is it working for you?
AT: Snapchat is about showing real moments and real life, whereas Instagram is more about the perfect life. But our customers want to know what you really look like when you put on that makeup or where the mistakes were made when you applied it.
AWB: It’s also a way to connect education and process. The platform is very conducive to step-by-step instructions, which makes sense for us, and it gives us a natural way to weave products into the story.
We’re even starting to see an impact from a sales and retail perspective. People are taking screenshots of products they see on Snapchat and manually typing in unique URLs that we’re only showing there. We’re seeing the real influence this can have on customer behavior.
What kind of customer data do you collect and how do you use it?
AT: Everyone fills out a beauty profile before they join to say what their hair type is, their skip type, their preferences, if they’re adventurous, classic, low-maintenance. That’s one of the things that informs the box experience and helps us target the right products. And in the back end we look at what people do. Did they convert? What brands did they buy and what type of products? We also want to see how people feel about what they got so we encourage reviews.
ABW: We also look at cohorts of customers on different media platforms and evaluate them each in terms of revenue and lifetime value.
Birchbox opened a brick-and-mortar retail location in Manhattan in 2014 with several more planned. What’s the rationale there?
AT: The concept is to figure out how we can exist in the physical world outside of box subscriptions, because we can’t ignore that a lot of the shopping experience still takes place offline.
We’re testing unique ways to approach the in-store experience. For example, we organize products in the store by category, not by brand. Rather than expecting women to know about all of the brands in the beauty world and which one is right for them, we have a mascara or a lipstick section because that’s how women shop.
Have you seen good results?
AWB: We’ve found that people who engage with us at multiple touchpoints are amongst our most valuable customers.
AT: Someone who shops in our store has nearly three times higher the lifetime value if they’re also subscribers and buying online.