Birchbox CEO Katia Beauchamp: Voice Is Set To ‘Massively Change’ Discovery
From the rise of voice search to advancement in photo recognition, there will be big changes in the beauty industry — and beyond.
Katia Beauchamp and Hayley Barna started beauty juggernaut Birchbox back in 2010 with the idea of bringing the beauty industry online. They did it: The duo launched what became a massive e-commerce entity, a subscription service that spawned dozens of “beauty box” copiers, and even eventually opened physical stores in New York and Paris.
Now, another change is on the horizon: With the advent of intelligent assistants and the rise of voice search, the way customers find places and products is once again in flux.
“The entire utility of a website is coming into question, in my opinion,” Beauchamp said in a conversation with GeoMarketing‘s Lauryn Chamberlain at a Yext Talk session earlier this week. [Full disclosure: Yext is GeoMarketing’s parent company. More details on that relationship here.] “As these platforms where people are actually spending their time adapt and allow you to stay within the platform more and more, that, to me, is [the future.]”
GeoMarketing: Birchbox has grown to over 4 million subscribers. You’ve talked about trying to serve the “beauty majority,” or the customer who likes and wears makeup but isn’t necessarily out there actively searching for new products. How are you targeting this customer and continuing to build that audience?
Katia Beauchamp: Everybody [tends to] focus on the hyper-beauty consumer — the people who are truly obsessed with beauty. This is typically referred to as the 80/20 rule: The top 20 percent of consumers generate 80 percent of revenue, so that 20 percent is a logical group to focus on.
But what about the rest of us? There is that 80 percent of women in the market, and they [almost] all use beauty products, and some of them use a lot. But they didn’t feel like a part of the conversation.
We learned that and we said, we are going to hyper focus on that. It’s really hard, because that customer is so much harder to acquire. She’s not looking for beauty, so you can’t just say, “Here are beauty products [because] you’re searching for a beauty box or you’re searching for a sampling kit.” No. Our customer, by definition, is fine. The way that she gets acquired is that people like her tell her, “This [product] has changed my whole experience in beauty. I’m obsessed.” Then she believes in it.
It’s the customer that uses [Birchbox] who ends up recruiting the customer that is skeptical of it, frankly. And in [order to build that], we focus heavily on organic content and being in those channels. Then, we use our paid funnel to echo that, because we don’t believe the paid funnel alone is that useful to someone who doesn’t trust beauty and who isn’t looking for us. We need the organic to help generate interest, and then we need paid [media] to echo what our values are.
So, this is a much harder customer to acquire, but we also think it’s so much more interesting. Instead of chasing the same consumer everyone does, we are focused on growing the pie, changing the potential customer, and meeting and delivering on an experience that no one is trying to compete with.
You built Birchbox with the idea of bringing the beauty industry online. This began, obviously, with the subscription boxes and the e-commerce site. But after years of operating online-only, you opened a physical store in SoHo in NYC last year. Why is that an important move for you? Why go from online to offline and bridge these worlds?
We just opened our second store in Paris, actually. We have a really large customer base in France.
When we started doing offline, it was really around pop-ups and thinking about what’s valuable to our customers in real life. We wanted to see what those interactions could generate and start getting data on that: Do people come in? What does their transaction behavior look like? How does that impact their online behavior with us? The data was compelling enough to where we said, we can at least open one store and see if this holds true.
It’s just [all] about seeing if this is additive to the experience. At the same time, this plays into what we learned about attracting this customer, this member of the beauty majority. We [knew that] if we were going to ask to become her destination place to buy beauty, we would have to think about being multi-channel; it’s pretty hard to ask for that and to be a single channel. All of those reasons compelled us into opening our first store, and the requirements were pretty simple: We wanted retail to be profitable in and of itself, and then, ideally, to generate online [activity], increasing the value of the customers. And it did that.
Right away we saw it as the happy brand halo effect from having retail for our customers. We’ve also seen the impact on customer lifetime value: A customer is a subscriber to Birchbox, comes to the store, and the lifetime value almost triples for a variety of reasons. A big one, from my perspective, is because consumers still come to Birchbox really knowing primarily about the box. We work really hard to say it’s not just about that; that is the appetizer, but we want you to shop from Birchbox. We are a store, we hold inventory — it’s not a marketplace. I think that the [locations] help people see Birchbox as a store. After they go there, they then visit us on the Internet, too, and mostly on mobile, and they say, “Oh, I can buy on Birchbox.” It changes the potential.
In terms of the way you get discovered — both on and offline — how does the rise of voice search and intelligent assistants impact that?
I think that’s a huge question for us all. There are massive changes taking place. Voice is one, and photo recognition is potentially another. Actually, I’d say that the entire utility of a website is coming into question, in my opinion — and pretty soon. [This is] because it’s not necessarily a frictionless experience to ask someone to go and do something on a website.
As the platforms, social [and otherwise], where people are actually spending their time adapt and allow you to stay within the platform more and more, that to me is [the future.] Again, we should be asking ourselves huge questions about where we’re developing, where we’re spending that time.
It’s such a big thing: My twin boys that I have at home, they think Alexa is in the family. Also, interestingly, I think that there’s something really “old school” happening that is being facilitated in some cases by technology.
Here’s what I mean by that: Birchbox, very strangely, became successful by using the mail. When people were really focused on emails and newsletters, we were successful by using the analog mail. We see catalogs having a huge resurgence and impact because people are saying, “I just don’t know where to go on the Internet.” People are introducing beautiful content that’s physical to help [customers] meet their brand. And podcasts? So analog. It’s the idea of, “there’s too much information, there are too many images. I just want to listen.”
Likewise, I think there’s something very old school — though obviously facilitated into high technology — about voice. It’s a one-to-one with a concierge interaction. It’s the same thing with SMS and text; it makes the world feel small, it makes the world feel intimate. It can make the world feel human.
I’m super excited about it because that is our defensibility around Birchbox. How can we be the more human, authentic friends that we are — and frankly, that’s the only way to compete when you have the juggernauts out there that have the access to everything. [Voice] will be a huge tool, but it’s still a coming tool.