Here’s a stunning piece of reporting from Racked.com
This could be the start of the final act for Birchbox, a service that charges subscribers $10 per month for a box of five or six deluxe beauty samples. They’ve announced plans to limit the offering of store credit for sample reviews and suspended plans to open new brick-and-mortar stores. Venture funding for subscription boxes in general has dried up this year and Birchbox’s attempts to secure more funding have come to naught. Customers on beauty forums say they’re furious and cancelling their subscriptions.Layoffs in January were followed by another round in late June. A California class action settlement (Birchbox has not admitted wrongdoing) appears to be nearing payout.
The Birchbox experiment, which began in 2010, is audacious. Birchbox charges women $10 per month for a box of samples that it receives at no or low cost from brands (though they’re now paying for more samples than they did in the past). Those samples act as Birchbox’s self-professed “marketing trojan horse” intended to inspire sales of full-size products in the Birchbox shop. Data from the more than one million subscriber profiles is mined by Birchbox and partner brands to more effectively market to both subscribers and nonsubscribers.
The Birchbox concept was once the darling of the beauty world, and so successful that it inspired the subscription box boom of recent years. Birchbox was hailed for “disrupting the cosmetics industry” by letting women who aren’t necessarily obsessed with beauty products try them at home, but the company’s aims appear to have shifted. Co-founder and CEO Katia Beauchamp told Bloomberg earlier this month that Birchbox is “not in the business of selling people samples,” distancing Birchbox from the subscription service most associated with the brand.
So it shouldn’t be surprising that Birchboxes aren’t delivering the best in beauty according to current and former subscribers that Racked surveyed.
Read the survey, and the rest of the article here. It’s important.