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Subscription Boxes The Beginning of the End for Birchbox: Has the Time Passed?

If you love trying new things or are still experimenting to narrow down your beauty routine, you’ve probably looked into or even received Subscription Boxes. I am a huge fan of subscription boxes, because I live for the thrill of the hunt. My quest to discover the latest and greatest items will probably never die, and I will stick with subscription boxes as long as their lifespan has not passed. They are not for everyone though. People who know exactly what they want probably prefer to buy their specific items (preferably with a nice deal). Even those who once loved them may eventually tire as they find the items they’ve been searching for. What is the life cycle of the subscription box? Was this model meant to last? Have recent developments marked or beginning of the end, or has the time already passed?

In 2010, Katia Beauchamp and Hayley Barna began to convince us all (investors, subscribers, beauty lovers, entrepreneurs for competitive brands, and more) that subscription boxes were the future with the launch of the first major subscription service, Birchbox. Men were not excluded from the action either as they eventually launched Birchbox Man. Many copycat brands came along. Some succeeded. Most did not. It reached a point where the market proliferated and almost any good available could be purchased in a subscription box. Subscription Boxes became a popular way for people to sample items before they bought them, and many enjoyed this service.

Other than my quest to try new things, the second reason I love the subscription box model is I do not return things (unless they arrive damaged). If something does not work out for me, I usually give it to someone else who may enjoy it more than I did. Returning things is a hassle and wasteful. By testing so many items before I buy them, it gave me a chance to know what I loved before I purchased and helped me become a more informed consumer. I owe my love of many products, like Egyptian Magic, to subscription boxes. Without the subscription box (Birchbox specifically), I may have never found that gem.

To those who believe we are only buying samples, I disagree. We were buying the experience and the opportunity to discover new things without purchasing something we’d never tried before only to get it home and realize we hated it. Of course, if you know what you want, I understand why you feel this way. It is one of the biggest complaints I keep seeing about the Sephora Play! Box. People want to know why companies charge for samples brands hand out for free. It is the main reason I say subscription boxes are not for everyone. For those who love subscription boxes, we understand that it is so much more than that. We believe in the model Beauchamp and Barna pitched and successfully launched in 2010.

When Birchbox launched its brick and mortar store in New York in 2014, I was happy for them. I planned to visit the store if we ever made it back to New York. My first thought was they would expand to become much more than a subscription box program, but I never realized it may have marked the beginning of the end for their subscription box. It seems the focus shifted and Philippe Pintail from Sephora came in to legitimize the brand as a full-size retailer instead of subscription box that also has a store. While I support their decision to expand, it seems they did not do as well as they hoped. In August 2015, Barna stepped down as co CEO (she maintains her seat on the board), and while we may never know the exact reason, change in management usually means big changes to the company.

The Birchbox model was never duplicated. This is the main reason it was my favorite subscription as recently as yesterday, and I screamed from the rooftops about how much I loved it. That is also why they still had over 1 million subscribers in 2016 after many other copycats were long gone. Only Ipsy has more at 1.5 million subscribers and managed to do so with a less impressive program and frequently less impressive products. Many tried to copy, but no one ever really succeeded in the same way. No one gave 50% or more from the monthly $10 investment back to incentivize shoppers to purchase from the shop. For every $10 box, subscribers could get at least a $5 credit, for 5 ten points review. It was 10 points per review so boxes up to 8 items got $8 back. There was also an extra $1 back when they gave credit for social media sharing (prior to February 2016 online and March 2016 on the app).

In January of 2016, Birchbox cut 15% of its staff and eliminated the The Canadian Birchbox subscription. It seemed they were trying to cut costs, but they continued to make special boxes each month instead of reverting to the boring brown ones that launched their brand in 2010. As much as I love the brightly colored boxes, shipping samples in the brown boxes would have cut costs without cutting any major benefits.

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Yesterday, which was less than a year after Barna’s exit, subscribers received an email about major changes happening to their subscription. The change, which initially had many confused due to the poor wording, takes effect after 07/11/16. It says a subscriber will only receive a total of 50 review points per Birchbox account. Those subscribed to Birchbox Man have not received their email yet, but Carissa from Birchbox confirmed they will have the same change. As soon as they get through sample selection this month, they will be notified. That means I got about a month notification, but men will get much less time to adjust to the change. Since the 50 points are once per account, not per year, they will be gone forever after the first reviews following 07/11/16. Anyone who stays subscribed and continues reviewing everything will go from a minimum of 600 points per year ($60) to spend in the shop to $0. That is a major cut. It surprises me that they made such a drastic change with less than a month of notice.

Considering so many of us felt that the rewards program is what set Birchbox apart from other subscriptions that failed, it shocks me that it was completely eliminated. Sure the Birchbox spins this to say it is not gone. You still get points on purchases and for referrals. The question is how many people will shop without points when Sephora, Ulta, and Drugstore.com usually have better deals (points excluded), and they feel slighted by the decision to make such a drastic change to the box they love? Also, how many new people will subscribe when word gets out the main benefit of the subscription is gone? Birchbox had to anticipate a mass exodus of subscribers, and that new subscriptions will significantly slow down. Most people will not want to pay the same amount other people paid for a better program.

If Birchbox did not anticipate the backlash, the person who evaluated this from the industrial engineering side may have been in over his/her head. It is more likely that Birchbox did anticipate a huge setback to subscriptions but hoped people would continue to shop the full-size shop. Never underestimate the power of a disgruntled customer. When a company upsets me, I hold my money back until they offer a deal worth forgiving them. Eliminating the rewards program of my favorite subscription qualifies as upsetting me. I plan to review my July box on the 10th, so my August box will be my first review after the 11th of July. Once I review and receive my final points on that, I will use my remaining points in the shop. After that, I will likely drop my subscription unless Birchbox decides to reverse the decision to cut all review points or at least give points for accepting the box.

If Birchbox never reverses this decision, there is still a chance I will shop Birchbox in the future if they have a great deal. After all, the deal is the main thing I look for when I shop. There is nothing they can do to keep me subscribed if they stick to this decision though. The rewards program, while it definitely hurts the liabilities on their balance sheet, was the main reason I stuck with them so long. There was nothing like it, and I am glad it lasted as long as it did. A part of me knew it could not last forever, because it was overly generous. I will never regret my time with Birchbox and hope this blunder does not put them under.

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Other subscriptions are capitalizing on the misstep of Birchbox. I received an email from Ipsy today asking me to come back. Ipsy still has issues it needs to work out before I’d consider returning, but I do applaud its effort to bring in some disgruntled people who feel like they’ve been left without their beloved subscription.

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Coincidentally, Sephora Play! has openings. It seems to open around the 15th of the month, so while it is nice for the misplaced, it has nothing to do with the Birchbox decision.

I would be amiss if I did not say something about the subscription box market in general. If the original falls, I feel the life cycle of subscription boxes could be near the end. No one did it as well as Birchbox, so I see the market changing for the worst if the best is no longer there. Others will not have to work harder to strive to beat the best, and mediocrity may become the new normal. Even Macy’s had a setback after launching its box, and Sephora has not been able to launch nationally yet. With all that is going on in the world, losing subscription boxes is a minor thing. It really did change the way we purchased beauty and opened up the market for brands we had never heard of. Many got their starts thanks to subscription boxes giving them a chance. That was a great thing while it lasted.

See all Birchbox and Subscription Box articles. View my main page for the guide map to the site and deeper deal exploration.

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This entry was posted on June 15, 2016 by in Birchbox, Subscription Boxes and tagged , .