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Is This The End Of The Beauty Box Phenomenon?

Posted in Beauty, and Business and Law

It seems the craze and demand for beauty boxes filled with a selection of samples is on the decline, with smaller samples (a sachet in some cases no less) paraded as luxe sizes. For those who don’t know what a beauty box subscription is, they have been around for decades, but have recently become popular again due to social media and the ability to share brand finds and to refer friends. A cheap and quick way to market! The premise is that a customer pays a fixed fee for a monthly box or bag of mystery beauty products to sample. You can’t choose what you get usually (but some companies now have that option such as Latest in Beauty), and as the samples are free, you are actually paying for the box (or bag) and shipping costs. Most cost $10/£10 plus shipping, and there are discounts if you choose to pay upfront for a 6 month or yearly subscription. Usually there is a personal profile to fill out your details such as your skin concerns, and hair type in an aim to match the products to your needs. Often it doesn’t work that way, because the boxes are curated from what samples are available, and that’s in the very tiny small print.

The Birchbox founders (Katia Beauchamp and Hayley Barna) once exclaimed they wondered how they would convince people to buy a box of samples, and now it seems that bubble has finally burst. It was great for a while, but now the audience want better quality boxes and with more perks. Barna left the company 18 months ago, and since then Birchbox (US) has scaled back their service as they source another round of funding from venture capitalists. Birchbox Canada is on hold and has closed for the time being due to high shipping costs, and subscribers used to get $5 to spend in the online store for each box review—now you only get points for the first five reviews, referrals, purchases, and if you sign up for an annual subscription. They also have a ‘skip’ a month and get 100 points to spend in the store instead, which works if you have been saving up for something in the store, otherwise it’s just $10 credit for $10 plus shipping.

To encourage people to stay loyal there is an Aces VIP program, which is valid for a year if you earn 400 points in a calendar year. With this you can get extra points to use, mystery boxes, extra discounts, and first choice of products in some boxes. In some ways this is to make up for the change in the points system, but it has angered many, because previously you could order two boxes, review them and get $10 to spend. Now, that is much harder as customers are finding too many repeat items and also smaller sample sizes that they can get from a beauty counter. Quite simply, there isn’t value for money unless there is a full sized item in the box.

Over in the UK, Birchbox has been struggling with offers of 2 for 1 box offers, and free gifts for subscribers. The samples have become smaller, and more sachets have been included as samples, hardly the luxe sizes they have advertised. Each month there are several curations, and some are better than others. I have fared well on some months, and poorly on a few occasions. Recently they have introduced a drawer style box, which has gained favor and kept some subscribers happy. One of the pressing issues is the lack of genuine customer service offered where standard replies can be seen on social media and in response to queries. I took advantage of three buy one get one free box offers last year, so clearly they did not sell out of the monthly boxes which all have different themes each month.

Glossybox, who claim to be the number one beauty box in the UK (Birchbox make this claim too) has also seen a rise in promotions. Subscribers were sent a sale email recently where they could buy a previous box from the last six months for half-price plus postage (£5 plus £3.95 postage). Obviously they had overstocks and despite the promotions of buy one get one free, people didn’t take the bait. Why? Because Glossybox wanted them to pay the £3.95 postage for the free box as well! Considering the contents were complimentary, and that postage is actually £2.85 for a small parcel, it wasn’t really that free. In an attempt to appear to offer value, they do include full sized items, but when it’s a Revlon lipstick, or a set of disposable razors that you can get from the chemist it really isn’t worth it, and not much to get excited about unless you are a teenager.

LookFantastic have also released their unsold beauty boxes as one off buys on their site. They go back as far as May 2016, and cost £15 each, which is the normal price. It’s not tied into a subscription (which is the hardest thing to unsubscribe from) which is one thing, but with no discounts available, I’m not sure people are jumping at the opportunity.

Another one that seems to be struggling is Love Me Beauty, where the owner Oliver Gauci was seen on Dragons’ Den asking for funding. He admitted they only made a profit one month, and this is a third round of funding he is seeking having used funds from angel investors. This moved from a box to a bag last year, and a customer buys monthly credits to purchase sample sized products. Is it a good thing to be seen on Dragons’ Den asking for funding when the business has already taken money for subscriptions and has been around for three years? The company had also listed half price beauty subscriptions on Groupon several times last year, with a low recommendation from users. The main issue again is customer service and a lack of it, with a poor choice of products to choose from (many are the same ones from other boxes), as well as difficulties in canceling the service.

To have a successful beauty box requires more than a pretty box or bag with a handful of travel sized samples; these days customers want at least a full sized (not discontinued) product, high-end brands, great customer service, and flexible subscription offers. It’s not a lot to ask for, but can a company fulfill all the above at a reasonable price, and make a profit? I’m looking out for such a company, or I may just have to set one up myself!

*Read more from the Beauty Boffin who has two websites where she reviews beauty products (Beauty Philosopher) and (Beauty Super Spy) services.

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