How the Beauty Box Subscription Model Rose to Success
Maria Camila Taborda
July 19, 2022
8 min to read
Selling beauty products via subscription boxes has grown to be a highly popular model for beauty sales. While the bulk of beauty product sales are still made in physical stores and involve in-person sales, many clients love subscriptions. What is a beauty subscription model? What are its benefits? And how can you maximize it? Here are some answers.
What Is a Beauty Box Subscription Business?
Millions of people buy cosmetics and skincare products each day. In fact, the global beauty industry was valued at $511 billion in 2021. Spanning beauty appliances, services, personal products, skincare, color cosmetics, fragrances, hair care, and whatever continues to appear in the market.
Most people currently buy their beauty products at a bricks-and-mortar store but you can have them delivered straight to your door. Subscriptions to beauty boxes package your favorite items, (or a selection of curated surprises), into a convenient purchase delivered at certain timed intervals. You might receive your subscription on a weekly, monthly, or bi-monthly basis with a wide variety of products to choose from.
History of the Beauty Box Subscription Model
The beauty subscription business sounds like something new, but it’s actually been around for over a decade. In 2010, Birchbox launched one of the first, if not the original modern beauty box subscription company. It began as a partnership between two self-labeled “non-beauty people”, Hayley Barna and Katia Beauchamp, who found the beauty industry hard to navigate.
Barna and Beauchamp met in business school and felt that everyone, not just beauty-obsessed gurus, should be able to find the best products easily. Today, Birchbox subscribers can benefit from 3, 6, or 12-month subscription plans with various tiers of billing.
Glossybox launched just a year later, focusing on high-end, newly-growing brands. Founded in Berlin by Charles von Abercron, Glossybox has always focused on providing customers with access to luxury beauty samples and exclusive brands.
Today, many beauty subscription box companies co-exist, from high-end to more affordable options aimed at the masses.
Subscription Model Benefits
The global subscription box market is predicted to reach $65 billion by 2027, encouraged by the growing eCommerce industry. Subscription models present numerous advantages for both consumers and sellers that result in added convenience on both ends, and increased opportunities. When implemented correctly, this model can be quite effective.
Benefits for Buyers:
- More access to curated products
- Higher access to niche products
- Opportunities to try new products regularly
- The potential to save
According to Statista.com, the most common reasons women in the US said they would be interested in subscribing to a beauty box in May 2017 included:
- Discovering new products (52%)
- Receiving high-quality products for a decent price (35%)
- No need to go shopping (6%)
Having your purchases sent right to your door is undeniably convenient (as Amazon can well tell you!). A beauty box subscription can give you access to products you won’t find on the shelf at your local drugstore. It can also allow the company you purchase from to learn more about your preferences, in order to present you new products that you might not have found on your own. Finally, this model allows you to potentially save through promotions and deals not offered on-site.
Benefits for Sellers:
Beauty box subscriptions can also offer entrepreneurs many advantages. These include:
- More predictable revenue and better financial forecasting
- Potentially more manageable stock control
- Increased opportunity to upsell
- Better customer relations
Better Financial Forecasting
When you know how many customers have signed up to receive your products for the coming months or years, you can more accurately predict the financial stability of your company over longer chunks of time. Because subscription models often have customers sign up for one, three, six, or twelve-month subscriptions, you can better predict your sales revenue with this model than you would when selling one product at a time.
Potentially More Manageable Stock Control
In line with better financial forecasting, subscriptions allow you to potentially better manage your inventory. If your subscribers remain happy with your products and don’t cancel on you, you can predict what you need in your warehouse and when you need it more accurately.
Increased Opportunity to Upsell
When sending subscription boxes, you can offer your existing customers new deals through online promotions. You can also present new products as gift samples in their box and encourage them to try fresher or more expensive/exclusive products.
Better Customer Relations
Orders made online by your customers can be tracked through analytics. With subscription boxes, you can also provide customers with surveys they can fill out to indicate which types of products they prefer receiving. This information represents opportunities for you to get to know what your customers like and dislike. Providing also the chance for more streamlined marketing and data tracking, to reach a more specific target and boost sales.
Key Beauty Box Statistics
What’s the state of the industry? According to The State of Subscription Commerce Report, the beauty subscription box industry experience the following:
- In 2020, beauty subscription brands increased by 20% in average order value (AOV).
- In the same year, the industry saw a 29% increase in customer lifetime value (LTV).
- Subscribers grew 120%.
It’s important to note that this model isn’t a foolproof path in business. Some of the challenges it presents are outlined below.
Challenges of the Subscription Model
As with any business model, the subscription business has its pitfalls and drawbacks. If not approached with care and focus on the consumer, you can risk being out of touch with your customer base. And by not responding to your target market’s desires, you’re risking:
- Purchasing too much inventory
- Experiencing an overload of canceled subscriptions
- Having frustrated customers who feel “locked in”
By focusing on the tips below, which include remaining transparent and flexible while offering authentic products, you can help avoid these mishaps.
You may want to read:
5 surprising facts about Marketing & Digital Automation that you need to know
How to Make a Profitable Subscription Business Model in the Beauty Niche
According to a survey from Pymnts, women are most likely to purchase a beauty subscription-based on:
- Rewards programs
- Access to unique products
- Special sales
In addition, the following elements are important right now to beauty box subscribers and can help you rise to success.
Natural Ingredients and Transparency
Consumers are increasingly searching for products that are natural, organic, or labeled as clean. The global value of natural cosmetics is predicted to reach $54.5 billion by 2027. There is no strict regulation around what makes a cosmetic “natural”, but providing your customers with a clear and honest list of all ingredients and where they’re sourced from is a good start. Sharing information through blogs, podcasts, and videos can help increase your customer base and keep your existing one.
Authentic and Sustainable
Consumers are more and more aware of environmental problems and want to make a difference. Showing how your products are sustainable raises awareness and promotes your brand as authentic. Explaining how your products are free from toxic and polluting ingredients, safe to use, fragrance-free and made from all-natural ingredients is always plus.
If there’s one group that appreciates online reviews over the rest it may be Millenials! This group is said to like online product reviews three times more than Gen Xers, so gather them and share them with zest. Almost 30% of this group says they look to online reviews before making a purchase.
While beauty subscriptions can supply you with more solid streams of revenue, it’s important to allow your customers the option to opt out when they want to. Make this apparent from the beginning and practice what you preach. With a subscription model, the last thing you want is your customers to feel trapped into paying for your products.
What’s next? Taking Advantage of Cloud Software
Finally, you don’t have to do it alone! Running a successful beauty subscription business takes time, effort, research, and resilience. Getting the help of a subscription based software in the cloud to help you do it all, can be invaluable. A company like Subscriptionscloud.com can help you run your checkout experience seamlessly. Powerful programming allows your customers to enjoy fast and secure transactions that are 100% integrated with BigCommerce.
By migrating to Subscriptions Cloud and developing your subscription site with BigCommerce, you can turn one-time customers into recurring clients that come back again and again. Powered by Square, this subscription software can potentially increase your monthly sales by up to 50%. You can sell your products as single-sale items on your website and offer a subscription choice for those who may be interested.
Beauty box subscriptions present an industry that’s predicted to continue to grow over the next five years at a healthy rate. By choosing products specific to your target audience that promote sustainability, and by remaining flexible and transparent you can potentially meet with substantial success in this area. Employing the beneficial tools of subscription software can take your business to new heights and horizons. The sky’s the limit!
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