If you’re in the subscription beauty box business, you’re well aware of the boom that has taken place in the last decade. When Birchbox hit the scene in 2010, they created a new avenue for consumers to receive curated subscription boxes to their doorstep with makeup and self-care brands they likely hadn’t seen before.
This movement allowed for brands to generate interest in their product offering, well beyond the singular products that many customers may have purchased. Cross-selling and upselling opportunities rose, because customers were surprised and delighted by their monthly beauty subscription boxes, and in turn, were apt to try more specialized products.
Beauty boxes are booming
The State of Subscription Commerce Report, published in the first quarter of 2021, showed some interesting trends in the beauty subscription box vertical. In 2020, beauty subscription brands saw a 20% increase in average order value (AOV), and a 29% increase in customer lifetime value (LTV). What’s more, subscribers also grew at an astronomical 120%, illustrating that consumers were still, even amidst a global pandemic, ripe for beauty goods and services.
What makes beauty subscription boxes so attractive to consumers?
Currently, the beauty industry is valued at over $500 billion. Where in-store purchases may have dropped in the last two years, beauty subscription boxes have become a more regular purchase. A few reasons may be attributed to this popularity.
Convenience of a beauty subscription
Delivered right to your door, and often in set quantities that span a set period of time, beauty boxes create a predictable experience for your customers. Additionally, brands who implement regular engagement opportunities put their customers in control of their own subscriptions. They may choose to skip a monthly box, or swap out products for something different. Pairing that order flexibility with things like the customer portal or transactional SMS management, and the stellar customer experience creates loyal fans.
Flutter Habit, a DIY faux eyelash company, emphasizes their subscription program, touting the benefits to their customers openly. By putting the customer in the driver’s seat, they are enabling customers to be in charge of their orders month after month.
Increased engagement in subscriptions can increase your lifetime value from 15-32%.
A sampler platter of self care items
Beauty brands are often able to include deluxe beauty samples which give their customers a small idea of what the product will do. The upsell and cross sell opportunities compound in the beauty industry and are able to ebb and flow with the changing needs of consumers. Some brands may offer sample products within their first box or a holiday box—perhaps even something like an addition of “five deluxe beauty samples when you sign up today.” In doing so, customers may opt in to the full size versions when the time is right.
A great example of a brand that does this is Dermologica. Offering one-time purchases or monthly subscriptions, they provide customers with a wide variety of products to choose from. They also incentivize customers to engage with them, as shown below in their mailing list ad. Not only are they attracting customers and prospects to learn more about the Dermalogica line of products, but they also utilize samples or gift-giving which may result in an upsell or cross sell opportunity.
Upselling and cross-selling beauty products
Another way beauty subscription box brands can entice customers to try out more products is to make it easy to purchase new items. This may feel straightforward, but it’s important to remember that customers want to be as efficient with their time as possible. Often, if they have it in their minds that they know what they want to purchase, getting them to go research what else they may need is a cognitive load they may not want to exude. Instead, providing them with an up front offer can generate interest in a product they didn’t even know existed.
For example, Kopari, a beauty brand specializing in sustainable, cruelty-free, and clean beauty products, offers a free mini product once customers meet a certain threshold, while also offering a cross-sell opportunity directly in the checkout popup with add on products.
Word of a mouth, but with lipstick on
Whether by influencers or friends and family, consumers are highly influenced by word of mouth recommendations. In fact, as AdWeek reports, 74% of consumers say that word of mouth plays a key role in their decision making when purchasing products or services. With the accessibility of the internet, regardless of whether they’re purchasing luxury products, high end brands, or garden variety wellness products, consumers are listening to their counterparts for advice.
In the subscription realm, these influencer campaigns can also have a lasting impact, as often those customers will continue to tout your beauty subscription box month after month, not just from their previous boxes.
Gift giving opportunities abound
In the same vein as recommendations from people you love, the opportunities for your customers to give subscription boxes as a gift is quite high. In fact, now is the time for many brands to start formalizing their holiday plans as it pertains to their featured boxes. The beauty in gift giving beauty subscription boxes is that you have the chance to not only impress your customer in the purchase process, but also the gift receiver in the unboxing experience. By adding things like a free gift for those beauty boxes, or limited edition boxes for the holiday season, you create memorable customer experiences that further increase your potential reach of word of mouth referral traffic.
What tactics do the best beauty subscription boxes use?
As illustrated in The State of Subscription Commerce Report, top subscription brands, regardless of vertical, tend to follow the same set of tactics. Their focus in customer engagement outpaces them against their competitors. There are a couple of areas we found to be common amongst our highest yielding merchants:
- Offering flexibility- Customers have proven time and again that they want to be in control of their recurring purchases. Keeping them involved by offering them flexible options allows for them to remain engaged with your brand and keep you top of mind. Additionally, it reduces both active and passive churn. Providing customers with options to skip a shipment or swap out for different products prevents them from becoming bored of their product offerings or running into issues when it comes to an over abundance of beauty products. And finally, lowering the walls for them to cancel counterintuitively creates loyal fans. Though they may cancel, by creating a pleasant experience throughout their journey, they’re more likely to return or recommend your beauty products.
- Cultivating customer loyalty- Customers want to believe a brand they subscribe to has a higher purpose they’re contributing to. Whether you are a vegan beauty brand or have sustainable product offerings, it’s important to showcase those on your website and in your packaging. By giving customers a view into the window of where their dollars are going, you create a loyal fan base who feel as though they’re directly involved in the greater good. Another way to cultivate this loyalty is to continue to provide value beyond just your products. Whether it’s offering things like a beauty quiz to help them understand their skin care needs better, or a robust set of education materials on your blog, the value you’re able to provide ties your customers to you more solidly.
An example of this is in Beekman 1802’s “3 Codes of Clinically-Kind of Sensitive Skin.” They showcase the purpose behind their skincare and how that directly ties to the products their customers receive.
The keys to beautiful subscription boxes
With a vertical so primed for customer acquisition and loyalty, merchants dabbling in beauty subscription boxes are faced with a massive opportunity. This category is uniquely primed for cross-selling and upselling opportunities, proven tactics that increase AOV. What’s more, by making subscriptions as flexible as possible and empowering customers to manage their own subscriptions, brands can lay the groundwork for building a loyal fan base and increasing retention. That’s what sets the best beauty subscription boxes apart from the rest—for both your business and your subscribers.