A weekly podcast with the latest e-commerce news and events. Episode 185 is an interview with Amanda Tolleson, the Chief Customer Officer at Birchbox.
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Amanda Tolleson, the Chief Customer Officer at Birchbox. In this broad ranging interview we discuss Birchbox’s core business, a recent price increase, their personalization strategy, and their new partnership with Walgreens.
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Episode 185 of the Jason & Scot show was recorded on Tuesday, August 20th, 2019. live from the eTail East trade show in Boston, MA.
Automated Transcription of the show
Transcript
Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded live from the etail East trade show in Boston on Tuesday August 20th 2019 I’m your host Jason retailgeek Goldberg
and unfortunately Scott was unable to join us today so I’m solo but we made up for it with a great guest,
on the show today please welcome Amanda Tolleson she’s the chief customer officer at Birch,
Amanda just finished a keynote here I know you mainly came to talk to us on the podcast yeah but super generous of you. Also.
Amanda:
[0:56] Squeeze me and you know to talk him.
Jason:
[0:59] Exactly which I think was wise of them because it seems like the audience really loved it and the topic was a tracking a customer who’s inherently not looking for you.
So I want to talk a little bit more about that but before we do I measure most of our listeners are somewhat familiar with Birchbox but in my experience people,
don’t always have the exact right perception about your business model so can you kind of give us the the updated elevator pitch.
Amanda:
[1:27] Absolutely and you’re very right people usually know one thing about us but not the full story so far Xbox is a beauty and grooming retailer,
I’m really focusing on a new way of discovering Beauty and grooming Surly Discovery at the focus of our business model but still we have the full purchase model,
so you can actually buy full-size products from us as well as Beauty and grooming instead of beauty but we have grooming as well,
I’m so what we’re best known for is the subscription box right kind of picking up the subscription box economy which is taking over the world in some ways.
Jason:
[1:59] You guys are sort of the Birchbox up Birchbox.
Amanda:
[2:01] Yes exactly yes yes exactly where so I got to stay until we get a lot of fun free press where it’s like in the Birchbox of blank just launched it sucks or it’s just sex toys I get some fun ones in there for sure so there’s some like
pros and cons that we definitely have kick-started that industry.
Things are best known for that but we’re definitely not in the business of just building a subscription box company or the business of it being away a better way to discover Beauty in particular because,
beauty is so overwhelming the internet options on the internet and an easy way to
explore discover products has to have a personalized set of products you thought a profile personalized that a product gets into every month.
You can just cover them in the ease of your home beauty regrouping and then we have an easy path to purchase where we have anything that you get from us in your sample box you can then,
purchase for full size on our website complete that pass,
and then we also have a focus on someone physical details we’ve had a physical retail store of Our Own in New York in this will get into we have a partnership that slave focused on that,
how did the end of the day what we’re really trying to do is create an experience for the Casual Beauty consumer so this is a consumer that.
That really is not there by the industry beauty is not their top interest they don’t spend a lot of time it was going to be easy efficient delightful exciting. There’s you have more questions but that’s kind of Genesis of Birchbox.
Is it serving a consumer or a better way.
Jason:
[3:27] Awesome and like today all of these these subscription Discovery boxes and different things like sound like kind of common but you guys are 9 years old,
and it was a completely foreign concept when you first launch so I’m just curious I know you haven’t been there for all nine years you’re far too young but the.
If you know like what was the origin story was that like a super scientific evaluation of a gap or.
Amanda:
[3:54] Yeah so actually do know it even though I know as I am so young in my teenage years,
it’s hard to imagine that I wasn’t business school at the same time as the cofounders answer to my best friend from business school and I was their marketing friend as they were like launching the idea explore ESO actually do have inside so really it was a mix of things are kind of the same or the business,
the business Insight story in the personal Insight Stories the business is a story is when we were in business school there’s a lot of,
a lot of industries were having your seen massive growth in the penetration of online shopping I’m happening so clothing Etc right and what they noticed was,
beauty is not having that it was not having that grow within online it was but others were in the question was going to fly,
I was at not happening so the insides are being well because of key part of discovering Beauty the sampling is trying to products right so,
if I’m just picking from images online how do I know if that foundations going to work with me I don’t even know what a Serum is right there’s a huge part,
a critical part of the shopping experience for beauty that was missing in the way it was set up for copying the way other online retailers for other industries were doing it had to be something new and different enemy.
Unless it was just for replenishment which is basically what a way to the time is only replenish my shopping for beauty so instead of Discovery shopping in the personal Insight was just like who you know.
[5:12] That they are the two co-founders alien kathi are not that this beauty obsessed customer they’re not they weren’t like obsessive beauty industry wanted to get in it was more than,
they had a friend Molly who’s the co-founder Force employee Birchbox worked at a magazine and she basically had access to a sample closet,
and she would send samples to Haley on the co-founders at business school with a note that was like oh I saw this I thought you’d like it this is why I thought you’d like it,
and that so those that like personal experience of like well this is a great way to discover Beauty basically someone slightly more knowledgeable than me who knows me well enough just any product
I trust and I’m willing to try even if it’s something I’ve literally never heard of in my life so that’s kind of like that that was an amazing experience okay can we come by in that inside of a,
a true Human Experience that was beneficial with this industry inside of why the hell is you know what can I say hello massari.
Jason:
[6:06] I guess just go market as an explicit show on iTunes.
Amanda:
[6:09] That’s exciting.
Jason:
[6:11] Exactly your kind of risque.
Amanda:
[6:13] So the kids the kids won’t get my insights I guess it’s too bad so buying out with the industry inside that’s that’s how I was born with those two four two two things happening at the same time.
Jason:
[6:25] Very cool said she was getting Birchbox before there was virtually.
Amanda:
[6:28] Exactly they couldn’t part of the experience before it and then like it was kind of how do you how do you grow it how do you make this so you know it’s 7121 right so we have like an algorithm for example that takes your profile and how do you Skillet to be,
millions of people you can have that same Personal Touch experience.
Jason:
[6:45] My next question was going to be why isn’t Katrina a South Korean influencer but now now I totally understand it makes perfect sense.
Now you are the chief customer officer of Birchbox which is a I’ll call it in emerging tight.
So what what does a chief customer officer is it a better paid Chief marketing officer or.
Amanda:
[7:11] I’ll take that back as a to-do on my to-do list for Converse.
Jason:
[7:14] Yeah that’s your kpi.
Amanda:
[7:15] So really it’s something I’ve seen happening a lot adidas D deciso direct-to-consumer businesses where.
At the heart of the Insight is about a consumers that a consumer need and ultimately the whole business needs to be focused on that consumer in building an experience with marketing is thinking about oh here’s a customer when a Target,
and the rest of the company is not involved in that write the best marketing the best way to engage a consumer is pretty product for them that’s really resonant is it mean
feels good feels their needs and then we talked about it so it’s really to make it was really to elevate that concept of like we we as a company or focus on his casual Beauty consumer has repeating grooming consumer the entire company every single function in some way,
need to know about that understanding and using Corvette in their day-to-day decisions of what they’re doing and there’s a core part of our strategy rather than in marketing.
Jason:
[8:10] Awesome that makes total sense and it should clearly be paid better.
Then see him out. There’s anything wrong with this email we have plenty that our friends the last question and you you maybe give us a little ready but how did you come to this role what was your free Birchbox experience.
Amanda:
[8:29] That’s a pretty Birchbox I was on the Consulting side so this is my first quote on quote in new client side job I still some.
Jason:
[8:36] Congratulations on escaping as a as a current consultant people like you give me hope.
Amanda:
[8:41] So I I could have had but mix of jobs in Branson salting and customer research so did a lot of work around what is your brand stand for who’s your Target customer
how do you take your bread equitation it into new lines of business from all different types of Industry
ended up I loved I still let you know I could totally end up going back to that side like that the intellectual.
Diversity essay of kind of those different problems that you got to get you to talk into all different types of people and companies is really interesting but had this,
you know urge to see like how do you follow it through all the way through the execution and what does that feel like and so,
ended up jumping into Birchbox really not and I am very much a cash app you can sing or not cuz I was looking for a beauty company job by any means but I think when you’re moving to something new in a start-up the biggest to me the biggest turtle as we trust leadership,
even if it’s a great idea if you don’t have great leaders and you don’t have good decision-makers then if they say doesn’t matter so I knew obviously copy and Haley from business school so it gave me great confidence,
but I didn’t have kind of I started the director brand marketing,
and then I’m going to see about overtime and then as I took on this job now Chief customer officer where I’m over the marketing team still but I’m also over are experiencing which is digital product creative content Community social as well as engineering.
Jason:
[9:58] So that is awesome and then as I mentioned of your topic today was attracting a customer who’s inherently not looking for you,
so I’m dying to find out I’m teasing I already heard it so I know I know what you were talking about but I’d love for you to share Their audience time and what the the key points were but I I will start by pointing out,
like you upfront you have to admit there someone in the world that’s not inherently looking for you what shockingly like some companies struggle with that that realization.
Amanda:
[10:28] Yeah yes it’s really hit me as this focus on his casual Beauty consumers only we have to admit to ourselves is that,
they’re not the it’s not the thing they’re most interested in their lies about that’s it that’s it in definitionally who they are they’re not the video says they are there’s a beauty obsessed with most of the beauty industry focus is on which makes sense because they’re hyper engage hyper users that are
is there hobby is their passion and they’re going to spend way more per person but they’re really only maybe 15 to 20% of the total people engaging with UD,
and there’s this huge white space of people which we call the council meeting is about 70%.
[11:05] And there. It’s not like so what some people get confused when I say that’s we’re not going after Beauty and engage people that’s another 10% or something on the bottom that they’re not they’re literally like give me my soap and that’s it don’t talk to me about it we’re not trying to push a
boulder up the hill but we are trying to change perceptions of the industry beat for me they were trying to overcome this customer,
mostly it when they’ve engaged with a beauty experience they got into a beauty retailer are they’ve seen a beauty influencer let’s say on Instagram they felt like this is clearly not for me.
This is clearly not designed for me as a consumer which is okay maybe I’ll run in that store and try to find something but I don’t I didn’t enjoy it you know it’s not for me and so the concept of beauty experience can be designed for them.
Is foreign is an Uber, this is very upfront that we have to get over and we have to think a lot about how do we look and sound different from other Beauty retailers in our advertising so that they will pause and look at our Instagram bad,
Atwood most of the time they’re not going to look at it are in the influencers right now but we don’t work with beauty influencers even though that’s,
how to learn to do as a beauty company because our customers are not following Beauty influencers are following lifestyle influencers are food influencers and so those people can talk,
you know they already had the loading they can say hey.
[12:19] You and your beauty is not my top priority either but I found some interesting stuff via Birchbox it really improved my life and then it’s just about being.
Where they are witches we can get into like the kind of partner with Lorraine butts just like,
we found once they find out that we exist in who it’s for people love it our best customers are the customers who were not with this casual you can actually write us letters and say oh my God I can’t.
I never thought of company could be for me if UTI discover these pot never heard of a serum I’ve never heard of dry shampoo but they,
completely change my routine in this amazing way but we have to get process that hurdle of getting over just like getting them to stop long enough to pause long enough to believe that this experience can be design.
Jason:
[13:04] Awesome to you perfectly framed a kind of daunting marketing challenge so how do you sell that marketing channels what were you talking about today that was a clever tactic in that way.
Amanda:
[13:13] So when is this is the view still a sheet for some Beauties offline so we are we’ve been online for most of our.
Jason:
[13:19] Wait there’s an offline.
Amanda:
[13:20] There’s something called offline it’s new.
Jason:
[13:22] I’m totally.
Amanda:
[13:23] Is there a new and so you don’t online a lot of it is like you have to drive the traffic to website right so that’s Dino
I have to like an odd or it for shirt like a huge weight is just like customers like you they talk to their consumer but there’s something is very active that needs to happen to come to your experience
I VS1 power off line is just as a passivity about it either they see you in a store window walking by and they stop in or
example just being in a place people already or shopping for our consumers are you shopping for beauty so and thinking about that we have partnered with Walgreens,
where are for sure the Casual Beauty consumer we listen lots of our studies like it’s shopping drugstore Brands right there shopping at the drugstore for their
Beauty and if we can have a space right there the feels comfortable and welcoming and inviting and replicates all the amazing person experience we’ve all mine physically.
It’s an immediate overcoming of that barrier that we have of getting attention because they’re there right and they it’s interesting and they’re going to go check it out.
Jason:
[14:22] Very cool answer this is a sort of exciting new thing that you that’s alive now that you haven’t experienced inside a handful of Walgreens to start.
Amanda:
[14:32] 11 we started with 6 Plus December we just opened five more.
Jason:
[14:36] Got you in I know there’s one in my hometown of Chicago other big cities that was nurse could find one.
Amanda:
[14:43] Yes we’re in New York and Chicago and LA in San Francisco.
Jason:
[14:47] Perfect so you’ve got a bunch of the big Metropolitan is covered and what is the experience going to be when I walk in the store when am I going to see you different than a traditional Walgreen.
Amanda:
[14:57] Yeah so a couple things we focused on we’re making sure that it felt something new right both knew but also,
self aware of the space it was in so if I knew I mean how can we bring the Birchbox brand to life in the space so we thought about what are the things that are.
[15:15] Most important in the experience of our consumer that they love about her subscription box are all 9 website I’m so things like I feeling warm and welcoming and,
not intimidating to this consumer so even in the design of the space I’m thinking about the colors we using Brighton friendly
lots of woods we use a lot of Home elements like wallpaper and like the tiles that you know the backsplash on your kitchen will use that element in part of our design is to make it and we’ve heard that we’ve had we’ve done some intercepts in the store people feel like,
warm is your friendly ass feels welcoming but also making sure that it felt,
it wasn’t cut off from the rest of the Walgreens store so we’re not trying to create this a store and sore feeling in the sense that,
oh I’m walking out of a Walgreens into a Birchbox as much as Walgreens and Birchbox are together presenting this experience that is you can very easily your shop across both.
Frosty of prestige brands on the table to bring it to the store for Walgreens and then also we definitely expect the Casual consumer to still be feeling her basket with him or drugstore Brands so making sure it felt like there’s an ice floe,
and a key part of that too if there’s a beauty consultant,
that we’re only in stores that are the woods called their beauty differentiator storms the Walgreens has invested a lot in this beauty strategy to keep for them and they trained,
3000 stores they treat Beauty Consultants really help you with your knee is it in the beauty Consultants work across both are our area as well as the rest of the beauty.
Jason:
[16:44] Hey Santa by understand this at Walgreens that experience is much more of a sales assistant experience so they have a
A salesperson with a specific training and subject matter expertise and you’re much more likely to get help and advice than you would in a main line Walgreens store for exam.
Amanda:
[17:00] Yeah yeah so this is it yeah that they have specifically trained Beauty Consultants that only work in The Beauty Department so we trained them are brands are trying on other so very different than the day it introduced.
I think a couple years before a partnership with us and he’s already been on that journey and we will have that experience by coming together.
Jason:
[17:18] Show me to put some pictures of this experience from my Chicago store on your weiner show notes but so
Shopper walks in the Walgreen they’re going to see this this
premium space that has a different feel but still organically feels like part of the the same shopping experience and is it going to be strongly branded Birchbox is it co-branded.
Amanda:
[17:42] Is evolution only rented Birchbox so you know that you’re it’s a Birchbox environment but again feels very fluid between the two and then we have some I really tried to bring to life,
so there’s kind of design of what I talked about that also the actual a sitting Twitter engaging within the space,
the replicator Birchbox experience so how do you bring for example the surprise and Delight of the subscription experience to a physical store,
so we have something called the build your own Birchbox BYOB.
Jason:
[18:08] Which is often disappointing when someone finds out that it.
Amanda:
[18:11] Customers you don’t have might have a different interpretation it’s Dino so but the idea there is that you’re able to.
[18:19] You know we have a stamp lately we have samples and get a pack and make your own Birchbox you know where was five or six samples you can tape home experience that it’s a way for us to start a conversation about what the subscription boxes are for,
we focus a lot on having Indie Brands be a part of the experience they are discovering and depressy is brand versus a really well-known Brands because,
begin that discovery that Delight the thing that I would never have found on my own as a key part of it so that’s a key part and then in the full-size shopping experience,
really focus on how and we learned this actually in our in our own store that we have launched and brought it to this was.
[18:53] How does a consumer actually want to shop physically how do you make it as easy into it as it is in the Box on our website to discover products list take what’s a good cleanser for example the most Beauty retailers the way they categorize things,
so if I want to cleanser or an eyeliner I’m going to go to like 20 different locations will get all of the different I don’t the only thing I know about the differences that there’s this x vs R and Y,
how do I know what’s right for me so the way we set up our merchandising was by hadiyah categories
more I say intuitively to the consumer rights cleanser I go to the cleanser section and then we have to think of it like a jeans wall and try to visualize if you don’t have pictures or you have been a column
going down with my B cleansers and then you have horizontal going across which will say like detox or moisturize right or acne prone you know what what are the ways that we can help a consumer make a more informed decision about what could work for them rather than putting on the onus
on them to have to do a lot of things about the beauty industry to make episode.
Jason:
[19:51] Perfect so you’ve sort of a sort of things by use case our problem rather than by brand which I know the early days of cosmetics,
like in the department store the only way to shop was by Brandon so it’s almost like you had to get some kind of education before you could even know what you were looking for.
Amanda:
[20:08] And it prevented Discovery rightly we actually find a lot or casual be the consumer if she before she finds out she is like my mom use Clinique and therefore I use Clinique nothing wrong with that but it’s a great brand but.
You don’t even don’t know how to store something else or do you know where to start yours like I’m just going to stick with Clinic because that’s what I know.
Jason:
[20:24] So in this section I can make my own box and then,
am I paying for that one box and walking out with it and I sent you a bought some samples or if I actually subscribe to Birchbox and the one I take with me is just my first box.
Amanda:
[20:40] We hope it’s the latter we have both options but it’s definitely an intro selling tools I want to just feel like how it’s a fun experience we found with uses in events in general.
People love it it’s like candy people line up to do this so it’s it’s kind of an it’s an enticing experience to get people even into the space and we definitely try if someone’s interested to up-sell them and say hey if you like this will you can get this box for free if you sign up for 3-month subscription,
for us obviously the goal is definitely to try to convert into subscriptions but you can also for it up price we could we charge you more per box if you do just one,
but you can just walk away with the box of him.
Jason:
[21:15] Perfect so I can buy a box of samples I can subscribe which as far as I know is sort of a new thing from Walgreens Walgreens hasn’t had a lot of,
like subscriptions and replenishment service outside of actual prescriptions,
so that’s super interesting and then I assume I can also shopping by the full-size product in this is an interesting part of the partnership to me you’re bringing a bunch of.
Aspirational independent Prestige brands that,
historically might not be willing like wouldn’t be willing to sell on the Shelf in Walgreens so you’re giving Walgreens access to some aspirational product that they might not otherwise have.
Amanda:
[21:57] Yeah definitely a big part of you know I think in any great strategic partnership you want to make sure that you’re bringing equal value to the table,
I’m in your sock equally solving a big business challenge for the other So Raven Birchbox brings to the table for Walgreens is innovation Wright County innovation,
9 years of focus on this casual committee consumer which as a.
David. They’ve been going after them too but they’re up there more than Beauty right there so many so many things are selling Wares were so laser focus on knowing that consumer and then for sure our relationship or our existing relationships and Trust we have with our trusty partners,
is it a part of it and for them obviously bring us scale they bring us amazing physical retail experience we don’t have and that just like being in the place they have it has a consumer of the casualties were there.
[22:42] We have a lot of locations so having that so yeah for sure a big bend a big Focus for Walgreens and for us is like bringing in great Brands so that it feels like.
Fullbeauty destination in the point is not that it’s going to shift all to be this type of the Cindy Prestige brand that’s not the 80s that we believe that consumer and likely experience they’re going to want is to shop for.
There are more Indie Prestige whatever reason if there’s a need or brand or product they like as well as their drugstore Brands and have it be a seamless experience across that they can shop.
Draper Temple and we do have a check out in our space but it’s not a Birchbox only check out.
I just there to facilitate the experience if you want that but you could buy other Beauty Brands are in the drug store 2nd and Walgreens section if you want you can buy your toilet paper there if not it’s made to feel integrated to bring them together and stay there.
More options and Beauty to explore and having all of that available to Walgreens customer is definitely a big part of their strategy.
Jason:
[23:40] Awesome in so I can totally
fill my prescription make a custom box and get some diapers and go pay for all of it at the the front cash register at the Walgreens which is cool so is like obviously you’re getting access to all the
the organic
but traffic to Walgreens normally gets because you’re you’re bringing something elevated to the Walgreens experience are they marketing you guys at all or you doing any joint marketing are you doing any any any campaigns outside the store to drive people to these stores.
Amanda:
[24:11] Yes definitely they’re very excited know both of us are very sad about the partnership and think of something interesting and new so we’re both talking there,
4 in the locations in the area so we are working our customers are they are there. We did Big launch event.
For the storage to make sure like in the cities you are aware of it happening we’ve also have done download with some digital app,
before it’s too late friends are people in the store being advertised being so there’s a lot of a lot of focus on how are we getting not just converting who’s there but also how we getting new consumers end in two different ways is there a,
one thing we definitely look at his are we getting people who shopped at that Walgreens before but I’ve never even engaged in the beauty category which were done anything like move it on right,
example of that Walgreens right getting them into the store.
Jason:
[25:02] Got it and so beyond that digital marketing is like if I go to any of your own digital experiences or Walgreens own digital like is there like can I find out which stores have the Birchbox experience.
Amanda:
[25:14] So are we definitely have you know what location was retail locations you can find out where we are as well as we actually do have a small digital.
There is no give you look if you just a Google Walk Birchbox Walgreens the most likely to Walgreens I’ll come up where they talk about where we are but we do have a small digital shopping experience to,
exactly omni-channel with Walgreens I’m so you can buy there’s like a Birchbox there’s a Birchbox section all in the Walgreens website.
Well that is similar to everything I just talked about physically you can see in the digital with a different look slightly different look and feel a little more elevated a little more information and you can just check out,
name is offline the online you can check out with a full basket with other things from.
From their mother be sections are the paper and have it shipped to you so it’s it’s not as big yet where the focus has been on the physical but we definitely have that too.
Jason:
[26:05] And the super Advanced question so don’t feel bad if we’re not at like 10:30 blacked out yet,
Services riding so you and we’ll talk about this morning at the sac that why you can do things like trade a box and do things like that,
can you do those like on E channel experiences inside of the Birchbox location so I can I do a return for example if I got a full size item or.
Amanda:
[26:33] I know you could not yet he bought one from our website you couldn’t return it to the Walgreen.
Jason:
[26:37] The probably be bothered at the Walgreens you.
Amanda:
[26:39] Yes definitely yes those kind of their separate experience in that but if you buy a subscription you really slow into the Birchbox inscription experience and we have talked a lot about how do we.
Think about what is valuable in the intersection of the subscription and Walgreens so.
Example of something that we could have your box deliver to the Walgreens instead of your house if you wanted right that could be an option so I’m or you could.
We have customization as we said we’ll talk in a little bit is a big part of our experience for people who live close to one of these Walgreens you can say the way to customize your box at 1:50 to go in and do build your inbox in the wall,
so we definitely are having a lot of conversations on how how do we create value by the fact that,
play there’s no place like the full-size shopping in the lake getting a new consumer in our world but in trying to marry the subscription experience with the the Walgreens and how,
thinking about you there there’s there we just we don’t wanna just launched something just to have that we want to make sure it’s a trade-in value.
Jason:
[27:38] And then one other question about the Walgreens experience beyond the stores that have this
physical presence I read that you also did an integration with Walgreens where there’s beauty advisors in all the stores can sell digital Birchbox inscription
American tablets.
Amanda:
[27:56] Yeah so in all of the beauty differentiation sources but they call it the ones that are more depressed or more upgraded in Beauty the 3000,
yes we’re at 11 physically but yes been 3000 Source we just launched this month actually any beauty Consultants can sell a subscription,
I’m to a consumer and one thing that were really interested in learning and testing there is that.
Can different than how we do online and digital is at one of the best places to best ways to explain that I have a Birchbox human-to-human in Dracula
talk like this here physically I have for a talk about the Casual Beauty consumer and what we’re about
I always have people come up after it’s like oh my gosh I had no idea I’m the Castle View to Consumer I would love this I thought it was for my friend who’s the beauty obsessed so there’s something about us,
human to human conversation that can really quickly break through that kind of going after consumers not looking for you that we’re hoping to leverage in this
model the beauty consultant selling it so that’s very exciting that’s when we’re launching and then in general were so kind of
playing around with formats so as we grow and we don’t want to go to more storage we don’t just want to roll out the same thing we want to test it were exploring smaller format subscription or,
only affordable kits like we do a lot of kids some which is going to bundling a simpleton to a theme so.
Really trying to still test and learn before we roll out so we know what works where.
Jason:
[29:21] Got you into one of the things that’s really interesting me about testing Warren and especially like to.
It’s complicated because you’re you’re not making beauty products yet so your.
Amanda:
[29:32] Wish we have we have our own own brands.
Jason:
[29:35] Dutch okay so we have some oven Brands yeah and Anna,
a plurality of of wholesale Brands but then you you amalgamate them into this new product that’s called Birchbox right I think of you is a direct-to-consumer brand even though you.
Are you could one could argue your a wholesaler.
Amanda:
[29:56] Yeah we’re both our retailer and have our own product which is this.
Jason:
[29:59] Exactly but so normally when you know the reason companies do directions to Consumer is.
Number one better margins and number to direct relationship with a customer so you get all the states that you can use to rapidly evolve and do test and learn and and do all these things and if you,
if you were to just sell your boxes to Walgreens and let them sell them to Consumers however they choose,
you you’d be lacking that day that you wouldn’t know those customers there be a bunch of detriment and so you don’t you see direct to Consumer Brands like struggle when they try to,
partner or expand with a a big retailer to get better reach but the relationship you guys are doing scenes,
much more novel in integrated because you really aren’t getting disintermediated from that customer even though they’re meeting you through the Walgreens and I wonder if that’s going to be.
A model we see you anymore.
Amanda:
[30:58] Yeah I don’t mean it’s definitely,
harder to get there today but it’s the only one we were interested in in the sense that yes it was right before I sent a strategic partnership that’s kind of what I mean,
hearing about your product and sell it and see how it does not. It’s not just a pure reach I guess that’s a part of it but it’s how we,
how are we influencing to get how we’re trying to build something together that is new and different and how are we both bringing different skill-sets to the table that also sharing learning ISO as your reference data data the ability to share both of us.
Combine what we learn and share data is a new critical part of the setup of the partnership so that we have that dataflow happening between our companies and it’s not.
It’s not a ice not just set it and forget it by any means it’s is how is that comes from believing this is a massive massive opportunity,
this is not an opportunity that’s like let’s do it in a couple stores not see what yeah you know is that I think.
Jason:
[31:55] It’s a lot of work if you’re just doing it.
Amanda:
[31:57] Yeah I like rays that like that because of belief on both as if this is a massive opportunity to build this together that we did a lot of work,
because I found the conversation started,
a year before we even launch of of what this partnership was it was a lot of alignment at the top levels of leadership of those companies that we believe it’s a huge opportunity there for this is the type of investment really make this is the type of information we need to do this is
how much testing and learning the news that happened that were bad alignment was critical to make sure that we were doing this in the right way.
Jason:
[32:31] Got it inside of her listeners Walgreens is based in Chicago so we know Amanda said she’s working closely with Walgreens with a basically means that she was visiting my home town and never drop me a line one.
But I’m not hurt I mean I am but but I’ll get over it so I want to pit a little bit though the Walgreens extreme sounds totally cool definitely encourage our listeners to go.
Amanda:
[32:52] Yes please go visit.
Jason:
[32:53] Check it out and let you know I do think there’s something here in terms of.
Future models for collaboration between digital native Brands and traditional wholesaler so it will be eager to follow it and I’m going to charge you to be super transparent about all those analytics and sharing with us.
Amanda:
[33:08] No no problems there with some.
Jason:
[33:12] Yeah yeah I’m sure I hear that stuff so I just.
Amanda:
[33:15] Minor.
Jason:
[33:16] Their suggestions so what’s going on at Birchbox.
Amanda:
[33:30] Yes on the corps experience were really focus on evolving Barber products and be Innovative Innerspace in designing spiritually Catalina consumer and
one day tactic we had this year which is an enabling tactic was to raise our price for the first time so we never raised Our Praise,
and I nearly raise our price for the first time and then the point being so we can invest back in our experience and really improve it and continue to innovate,
I’m to talk about a couple of things they’re so there’s going to taking the course. We have right now and making it better every thing from the merchandising that’s in it to the algorithm and how we match of people with products to contents over Ark,
Advil consumer you can probably imagine education is critical cuz it in there just not that familiar with the industry so how are we giving them.
[34:13] Having them know what a Serum is why you would use it right is like a baseline of information having more content in the box and then how can we evolve the experience of the box to an able not just the discovery piece but also if I let you know,
we’re not trying to just make you discover forever if you find something you love and we want to help you purchase that so I’m a couple elements there that were introducing or just about to introduce one is the ability to swap your box for a full size item.
I’m so you know this sucks and you can pick from but if I’m like I don’t want to discover do samples this month I like the full-size you can do that,
we have also related to that is we have this ability to have add-ons so you can have items shipped for free with your box so if you want to have items you,
love and discovered you can have a ship and then we introduced swap your box for.
Which is really out next month everyone we did a test around it was before like so you we have loyalty points as many retailers to what you can use to buy full-size items on the site so you can swap instead of give me a box that once you get credit and we can spend later,
and we also have our customization options we’ve always had which is just you can pick a sample that’s coming you can pick up. Mint so trying to make.
Give the customer choice right to say there’s a lot of reasons why your you may be very different points in the Journey of Discovery versus having found something you love it,
how can we give customers options and how they engage in that subscription experience every month instead of being in a.
Jason:
[35:36] Donna and tell and just to make sure I understand these are all sort of proactive experience is so I get some kind of
messaging that hey here’s the box that scheduled to come to you this month and I have some option to opt out of getting more samples and instead get points or a full-size product.
Amanda:
[35:52] Exactly you’re the man experience if you don’t do anything you’ll just get the personalized box for everyone just gets that with some people have some for some people to subscription the benefit of subscription is.
Not activity basically right.
Jason:
[36:03] Set it and forget it.
Amanda:
[36:04] So we definitely have a huge portion of our consumers do that but then we also have people who want more control more decision-making and their experience especially if they may have said oh you know I’ve discovered a lot of things I like right now I’d like to take a break from Discovery but I really want to know.
It’s almost like the layaway concept has been around forever right layaway some of this money so I can buy that shampoo or mascara that I really like.
Jason:
[36:26] Well one of the.
Sort of unpleasant parts of a subscription business is even subscriptions that customers really value there’s this phenomenon of subscription fatigue.
And so you know you can imagine I get a bunch of value out of the samples but one particular month I haven’t tried any of your samples and they’re all sitting around my sink and I’m having a guilty moment and then I get an email that the next one’s coming and I’m like,
and I would argue this like subscription fatigue has been super challenging in like the meal kit.
Example so it seems like some of these amenities are clever ways to kind of combat some of that subscription fatigue and I can get some other utility without.
Turning off my subscription and then then and then you don’t come back to the the samples when it’s more fresh and exciting again.
So that’s why make sense I’ll be interested to see how that goes,
the reason prices had to be an entrepreneur all of the siege The General,
cheaper and there’s a couple examples in retail that didn’t go that well raising place I’m thinking about the JCPenney for example that you did that with some consideration.
Did you feel like.
You knew you would lose some customers as a result of raising price but they they weren’t the right customers and the extra money would give you more resources to do a better experience for your customers that kind of.
Amanda:
[37:54] Yeah I mean the decision-making was more.
Less around Lake and now is the date we have to raise our brightest and more around we fundamentally believe we need to continue to evolve and improve our experience,
and we cannot deliver the value we think is demanded by our customers at the price point that we’ve been at we can’t because other things for us to write like.
Should we delay shipping is having a big part of the price right we don’t charge extra shipping included that’s one of every year right like so it was just more of a reality check I like we can’t like,
living in the reality of the world ran in the prices that they are we don’t.
Really we can stand behind our product if we can’t innovate and explore anymore and in order to do that,
we need to raise our prices to create the belief that we can create more value by doing that versus the cost of the of the rising and the prices but it was definitely I was just right but it’s both exciting and terrifying.
For sure right changing your face after 9,
especially as the marketing head is going to be in charge of the comms and figured that was like definitely really scary and I think it came from at the end of the day our biggest value in the thing that’s going to make us successful is the community policing us.
And then.
[39:04] We believe we had that and because we had that if we were super super transparent in our, so if you were about why we were doing it was very upfront about it we give them multiple months ahead of time that we were doing it.
What we are trying to achieve and knowing it would be perfect and that,
they would be on the journey with us and that’s what we found me actually found amazing response from our community list they’re waiting another still like we’re going to see
but they were like we believe in you verse possibly believe you can create more value and better for your so you did it one time before we believe that you you can put this money to good use and we really found that are,
we got they had much lower we had about a Superfecta. What we thought might happen from a term perspective so customers leaving subscription is a much lower.
[39:49] We don’t need no impact would just really amazing and we also we did some smart things I say in the price change a couple of things one was having some Legacy pricing so we have for our Aces which our customers are most loyal,
Empire that was a communicate if you be more transparent as a business is like if you spend like to be in Asia to spend $400 with us in the,
if you can if you spend that with us we can afford to give you a $10 box,
even though we’re going to Beth Moore in it right and then for our current customers we basically provided a slightly lower we got like as pretty as long as they say a subscriber there continue to have a lower price for the new customer coming in yes we’ve already,
you know you already given us money we appreciate that you were going to give this to you so trying to do some smart things like that and then the price will be introduced with tiered.
[40:38] I’m so again to communicate their relationship or trying to hang out with our consumers if you subscribe on just the month to month subscription your price is higher if you want if you commit to 12 months your price is lower per month I’m just a just trying to be.
Upfront and make it is obvious to customers as we can what we.
What makes a viable customer to us and in what the will allow us to invest more industry.
Jason:
[41:02] Yeah I know it’s only make sense in some ways it’s funny I think of your subscription,
as analogous to some of the the membership fees at a retailer charges so I almost think of it like,
the membership fee I paid a Costco and then that enables me to then buy products or the membership I paid a Amazon Prime and coincidentally like Costco famously,
successfully raised that membership price in the last 18 months and Amazon is now.
Amanda:
[41:32] Oh yeah it was on Prime say I mean how many times.
Jason:
[41:33] Yeah it raised raised it a couple times and so it does seem like if you think of it not as the product but as access to the product.
Like there is some some president of that being successful so it sounds like,
it’s it’s it was initially going that way for you and that’s a perfect segue to the Future so maybe leverage some of your previous Consulting XP
nice to put your future has had on 5 years from now when we’re sitting here at the,
the 2025 Utah least how do you feel like the the beauty shopping experience is going we’ll have a ball.
Amanda:
[42:13] Yeah probably just end up in a lot of Industries but just like.
Technology loves you like really into interact with a product like online with it feels physical today we know Birchbox.
We wants to know how these technologies that are merging where the weight alike.
Hack the all my friends having some way to sample and testing those to send you some papers in the mail but for sure there’s a lot of technology which is you know.
Look at my face and what is the colors look like on my face or like I just think it’s definitely to go in that direction of how can sampling online of beauty products be fully digital
I think it’s got a long way to go over when I see you in a bit actually being
truly useful I would say but I think in five years I bet they’re going to be a whole Suite of new technologies and products that are out there that help you.
Really discover and use products that can work for your hair your skin excetra via these digital interactive AI.
Jason:
[43:08] Oh I got I think you’re right I think like whatever the virtual trying experience is today and there’s already some evidence that today is virtual trying experience I’m now seeing some day that we’re customers prefer,
virtual lipstick try on inside of a beauty store as a.
Physical Tryon because you know.
Amanda:
[43:26] Just how accurate is the accuracy is where it’s like.
Jason:
[43:29] Sure sure they even in today’s date it there might be a preference incident your point five years from now like one can only imagine how.
Amanda:
[43:38] Especially other I think I would see colors kind of different colors.
Jason:
[43:42] I feel like they could finally nail my Foundation color you think I’m looking forward to that cuz it’s right it’s a real challenge at the moment nobody sells this blotchy color I don’t know.
I appreciate that and that I’d say that’s going to be a good place to end but that’s slightly too
too long because we didn’t really need to talk about my my beauty routine that we have used up all our allotted time so if listeners have any questions or comments we’d encourage you jump on our Facebook page or send us a tweet.
As always is a great time to jump in iTunes and finally give us that five star review that you’ve been meaning to do
Amanda is folks want to find you online or you on the interweb somewhere do you have a do you use LinkedIn or Twitter.
Amanda:
[44:25] I only said yes.
Jason:
[44:26] Okay cool cool so LinkedIn is the way to go and we sure appreciate your time thanks for being on the show.
Amanda:
[44:32] Yeah it was really fun.
Jason:
[44:33] Until next time happy commercing.
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