Birchbox: The Try-and-Buy Model Works
Birchbox revealed some interesting company data today--speicifically about the apparent success of their try-and-buy subsription model.
The company, which is a subscription service for sample items, reports that it has doubled its number of subscribers, hitting 400,000 users this year. And 50 percent of those subscribers have moved on to purchase the real-size version of the sample products.
“The conversion is a really important part of showing to both the brands we work with and everyone else the power of the subscription service model,” founder Katia Beauchamp told Forbes.
Also announced: around 15 percent of purchases come from non-subscribers through the company's onsite editorial content, which includes a blog and How-To videos.
Birchbox, which has experienced scaling pains in the past, currently has at least a four week waiting list for its subscription service--a delay that Beauchamp described as "obscene" in a rather heated CEO Supper Club discussion hosted by PandoDaily in February.
"We're changing behavior for customers but also for brands and what we've built is a platform that connects the two. So it's a challenge to match the supply and demands as we grow and make sure that we're consistently delivering a great product for the consumers but also for our brand partners," Barna told Inc.in 2011.
Beauchamp and Hayley Barna founded the New York City-based company in 2010, and it has just under $12 million in funding from investors including Dave Morin and Accel Partners.