Online beauty retailer to open bricks and mortar store in Paris

Subscription beauty retailer Birchbox has announced it is to open a bricks-and-mortar store in Paris this Spring. This follows the first full-line physical store that opened in New York in 2014.

Stores and online are complementary

Online remains relatively small in the world of beauty retail, but it is nevertheless a crucial part of the buying journey. 

Retailers aiming to appeal to today’s shoppers need to reach them in as many touchpoints as possible - many consumers may research beauty products online, but they are more likely to buy items in store.

The way forward is true omnichannel retail: the real and digital worlds complementing and reinforcing each other by giving customers the best aspects of both. To operate without one or the other is immediately to put oneself at a disadvantage.

What can stores do?

Store based retailers need to take on board new technologies in order to continue to engage with their customers, not only to keep them coming into stores but also to keep their brand front of mind when buying online.

They need to create an in-store experience particular to their brand; Sephora for example has many ways to make its in-store experience fun and engaging, such as Beauty T.I.P. Workshops (teach, inspire and play), which are in-store makeup classes that feature a completely interactive setup. Some of the stores also have an InstaScent facility that allows shoppers to choose a scent category, such as “floral” or “woody,” and actually smell selected fragrances from puffs of air.

What can online retailers do?

Online retailers need to look at how they can emulate some of the things that stores are great at; the interactive, immersive experience of trying, testing and smelling, as well as the ‘instant gratification’ of leaving the store with product(s) in hand. We see with Mintel trend Experience Is All how in today's digital world, many consumers are looking for an enjoyable, real world contact experience when shopping. By opening real world stores or pop-ups, online-only retailers can incorporate this into their marketing and business model.

France is a key beauty market

In our report Beauty Retailing - France - January 2017 we identified that France is the third largest market for beauty products and services in Europe (after Germany and the UK). France is Birchbox’s largest market in Europe, with 200,000 subscribers. Of these, 50,000 live in the Paris region.

Our research found that 98% of French adult beauty shoppers have bought in-store over the last year and 48% online. But only 13% had bought from an online only retailer.

The research also showed that interest in browsing and testing, trying new brands and using in-store beauty services is high, particularly amongst Millenials, Birchbox's key target market.

Figure 1: France: attitudes to shopping for beauty products, by age, November 2016
[graphic: image 1]
Source: Lightspeed/Mintel

Stores can offer subscription box companies new revenue streams

US based Birchbox was the pioneer of the subscription beauty box, but it now has many competitors. It sells cosmetics and beauty products online and through pop-up shops (as well as its one physical store) in six countries; the US, the UK, France, Spain, Belgium and Ireland.

Having become a beauty buzzword, most beauty subscript on boxes are now struggling to turn a profit. They are also facing growing competition from other beauty retailers, both online and offline, who are running their own beauty subscription boxes and sampling offers e.g. Sephora Play and Feelunique's "Try Me".

One way that subscription box companies can look beyond their existing subscriber base and diversify is by opening physical stores.

Birchbox has already had some success with pop-up shops in France. These have included pop-ups within the Le Bon Marché department store in Paris and various Galeries Lafayette stores across the country, as well as a temporary "Birchbox on the Go" vending machine at the Gare Montparnasse station.

The new Paris store will mirror the concept of Birchbox Soho, which is an extension of the Birchbox online experience. It will include Birchbox signatures such as:

  • A build-your-own Birchbox section where customers can select their favourite samples and discover new treats to try

  • Shop full-size products from hundreds of brands and explore curated, thematic sections such as ingredient-conscious beauty

  • A sampling bar and dedicated testing area

  • A team of specialists who will provide a dedicated, personalised service and expert guidance

  • Hairstyling services by appointment

The 200 sq m store will stock best sellers from the online business, Birchbox's own brands (LOC Love of Colour as well as a number of brands to which it has exclusive distribution rights in France. Store staff will have access to customers' online profiles and buying history, enabling them to guide customers and make recommendations.

The following photograph is of the New York store:

[graphic: image 2]

This physical store should enable Birchbox to deepen its relationships with its French subscribers, introduce the brand to new customers, and build partnerships with new beauty brands looking to distribute in France.

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