birchbox presentation
TRANSCRIPT
Agenda● Company Overview● Market Summary● SWOT● Market Competition● Target Identification● Marketing Strategies
○ Integrated Marketing campaign○ Grow Men’s Business○ Partner with Higher-End Brands
● Financials and Budgeting ● Recommendations
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Company Overview
● Founded in 2010● Ecommerce
subscription service● Beauty & Skincare
samples for women ● Expanded men
business in 2012
International Expansion
● Acquire JolieBox in Europe in September 2012
● Launch website in Canada in fall 2014
Physical Store
● Open in the Soho, New York City in fall 2014
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Market Summary
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● Growing subscription-based E-commerce
● Most popular type:
○ “Product Discovery”
○ Commodity Automation
SWOT
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Strengths Weaknesses
Unique Business Model Limited Brand Partnerships
Easy to Navigate Website Lack of Marketing
Opportunity to Buy Elsewhere
Opportunities Threats
Partner with High-End Brands Similar Brands in the Marketplace
Celebrity Partnership Smart Sampling from Department Stores
Additional Brick & Mortar Stores
Grow Men’s Busienss
CompetitionCompetitors
● Located in over 16 countries● $21 monthly for 5 deluxe-sized
luxury samples● Include a detailed description
card● Offer gift options
● Personalized sampling service● Choose up to 6 of 9 samples● $12 per month● 1-month or 3-month
subscribers pay $2.99 shipping fee
● Founded in 2011 by Michelle Phan
● YouTube makeup-tutorial sensation
● Glam Bag with deluxe samples and full-sized products
● $10 per month
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Characteristics Generation X35-54
Generation YMillennials18-34
Generation Z Under 18
Population 41 million 71 million 23 million
Family environment Family unstability;better educated
More financial support from family
Highly diverse and sophisticated
Life stage Reaching peak in career Young professionals; young family
Students
Attitude toward technology
Digital Immigrants Digital Natives Technoholics-entirely dependent on IT
Market SegmentsDemographics
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● Online cosmetic/skin care retailers
● Large populated regions dominance
● The Southeast and Mid-Atlantic regions are the main markets for trade
Market SegmentsGeographics
● 74% first choice is in-store
● Millennials tend to purchase online
● Gender differences in purchasing beauty goods
○ Women have more opinions
○ Men are more sensitive to price
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Market SegmentsBehavioral
Target Market
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Millennials
- fun, pleasure, confidence are important
- more likely to share opinions
- try new brands
18-34 23.5% of total population
Increasing spending power57% online buyers are millennials
62% influenced by social cause marketing
- functional, simplicity are important
- more likely to choose male specific products
- 27% like to shop for skincare products
Marketing Campaign- 3 Parts
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● Objective: Increase customer engagement by 40% in 2015
● Strategies: Integrated Multi-Channel Marketing Plan Grow Men’s Business Partner with Higher-End Brands
Integrated Marketing Campaign
● Target: Millennial Women● Goal: Increase brand awareness and drive customer
engagement● Tactics:
○ Celebrity Partnership○ Print Media○ “Show us Your Box”○ “Explore Beauty”
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Celebrity Partnership● Create brand personality ● Relatability● Social Media engagement● Lauren Conrad partnership
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Print Media● Spring and Fall 2015● Utilize celebrity partnership● Collage of images from social media
campaigns
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“Show Us Your Box”● February-March● Unboxing post on Facebook and Instagram● Select 2 best posts per week 100 loyalty points/customized box
● Select 1 best post at the end $50 presents/ beauty service @Soho store
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Show us your box @Birchbox
“Explore Beauty”● April-May social cause month● 30 second video campaign● Brand value rebuilt● Award 20 videos with limited
edition boxes and 2 promotion
codes
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Grow Men’s business
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Many male targets still have not heard
about BirchboxThey do not find
value in paying $20 a
month for a box
The men's sector in the physical store at Soho
remains small with few visitors stop by
Current issue
Grow Men’s business
Concept of Women’s Box: “Discover Beauty”
Concept of Men’s Box: “Find something new without efforts”
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Key Message
Large Company Partnerships
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Who
● Employees in 15 large companies, such as consulting company, media
agency and PR agency and etc, and then expand
Why● Young professionals are more likely to look for male-specific personal
care products● Easily influenced to try out different brands● Higher purchasing power
To encourage Young Professionals to subscribe by offering the first month free
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Large Company PartnershipsTo encourage Young Professionals to subscribe by offering the first month free
Campus Reps Program
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To raise brand awareness among male college students
Why
● Important influencers on social media
● Potential loyal customers to Birchbox in the future.
Who
● Begin at big 10 campuses and then expand
Partner with Higher-End Brands● Goal
○ Increase customer engagement● Target
○ High-end customers & who cannot afford these brands
● Tactics○ Collaborating to advertise new products○ Three-month “Birchbox Premium” service testing
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● Reasoning
○ Millennials increased spending on premium luxury
fashion by 33% in 2011 over the year prior.
○ Strong visual representation to Millennials
Partner with Higher-End Brands
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Advertise Partnerships● Collaborating with higher-end brands such as Dior, Philip B, Chanel and
etc. ● Customers can help spread the partnership news on social media.● Potential customers (high-end customers & who cannot afford luxury
brands) will subscribe.
Advantage for high-end brands:● Send samples to target profile● Avoid non-directed sampling● help track ratings and comments
Advantage for Birchbox:● Boost the number of subscribers● Increase revenue
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Premium Test Program● 3-month testing (June to August)● $20 per month for 5 samples● Current subscribers add $10
monthly to join● Introduction video on Youtube
Channel● Social media, official website & in-
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Sales Forecast
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2014 2015 2016
Total Cosmetics Industry Sales Market
$58,790,000,000 $60,580,000,000
$62,460,000,000
Birchbox Total Sales $91,514,286 $127,870,000 $178,788,000
Birchbox Market Share 0.16% 0.21% 0.29%
*Birchbox Store opened in October 2014
● Financial Objective: ○ If Birchbox implements the proposed strategy, sales will increase
by 40% in 2015 and 2016.
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$1,895,130
$1,277,000
$523,870
(2015)Total:$3,696,000Takes 4% of the total sales
Marketing Expenses
Breakeven
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Break-Even Analysis
2014 2015 2016 2017
Total Revenue $91,514,286 $127,870,000 $178,788,000 $250,027,200
Contribution margin $46,562,286 $65,087,200 $91,030,080 $127,331,712
PV ratio 0.5087980019 0.509010714 0.5091509497 0.5092714393
Fixed cost $25,624,000 $29,410,100 $41,121,240 $62,506,800
Break-even point in dollars $50,361,833 $57,778,941 $80,764,339 $122,737,690
Measurement to SuccessIntegrated Marketing Campaign● Celebrity Partnership
o Impressions on Lauren Conrad website o Likes on her Instagram photos
● Print Advertising o Circulation
● Specialized Boxeso Boxes Ordered o Full-size products purchased from
samples included in these boxes● Celebrity Videos
o Views● “Show Us Your Box” Campaign
o Number of posts to hashtago Traffic to Birchbox.com
● “Explore the Beauty” Campaigno Number of posts to hashtago Traffic to Birchbox.com
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Increase Male Subscribers● Marketing Events
o Number of attendees● Direct Email
o Number of receiptso Number of customers who use code
● Direct Marketingo Impressions to people seeing these ads
● Campus Representativeso Attendees to events on campus o Number of posts using #BirchboxCampus and
#BirchboxBrago Increase in subscriptions
● Refer a Friendo Increase in subscriptions
Partner with Higher-end Brands● Number of customers who participate in pilot program● Response to the program on social media (positive or
negative)
Implementation Control
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Goal
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Increase customer
engagement by 8%
Increase customer
engagement by 15%
Increase customer
engagement by
10%
Increase customer
engagement by
7%
Recommendations● Utilize all three tactics throughout 2015● In 2016, assess previous year success and
adjust budget accordingly ● Explore opportunity for website optimization
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