Birchbox Breaks into New Markets to Compete in Subscription Commerce

4/16/12Follow @jpruth

It takes a touch of finesse to win over consumers in a market crowded with e-tailers eager to ship products to one’s front door. Now New York’s Birchbox is finding out whether it has that touch.

The e-retail company, which ships curated wares, made its first splash offering assorted cosmetics and beauty products for women delivered in monthly doses to its subscribers. The company has diversified this month into grooming and lifestyle items for men with its new offering, Birchbox Man, and is weighing other ways to connect brands with customers. “We’re trying to redefine the rules of retail,” says Birchbox co-founder Katia Beauchamp.

Birchbox Man uses the same subscription model the company launched with in 2010. Because of the heft of the items shipped through Birchbox Man, those subscribers pay $20 per month compared with $10 per month charged for the service for women. Birchbox also offers an online store that lets customers shop for additional products such as backpacks and gadgets. In the highly competitive subscription commerce sector where some players have already faltered, Beauchamp says, Birchbox has positioned itself as a place for consumers to discover new products. The website is populated with lifestyle articles, on topics such as how to mix cocktails, to keep buyers coming back.

“We think e-commerce, marketing, and editorial can live together harmoniously and be a way for brands to connect with the right customers,” she says.

Extending Birchbox’s reach into products for men may help the company exploit a largely untapped market. Beauchamp says men, as well as women who buy gifts for men, previously expressed interest in a version of Birchbox that caters to guys. Last November Birchbox offered a limited edition box delivered to men for the holiday season. “We recognized there was pent-up demand,” she says. “When we looked at who was buying, 50 percent of the buyers were men buying for themselves.” That led Birchbox to gather more data on consumer interest in a subscription service for men and then roll out the new offering.

Birchbox has grown to more than 100,000 paid subscribers since its inception in 2010, Beauchamp says. The company, backed by Accel Partners, First Round Capital, Lerer Ventures, Harrison Metal, Forerunner Ventures, Consigliere, and others, has thus far raised some $11.9 million in venture and seed funding.

And the company is continuing its evolution with … Next Page »

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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