Katia Beauchamp, Co-Founder and CEO, Birchbox
In 2010, only 2% of beauty products were being sold on the internet. When Katia Beauchamp and her Harvard Business School classmate, Hayley Barna, came across this statistic, they were floored. This seemed like a huge missed opportunity—so they decided to dig deeper.
What they discovered was that people were overwhelmed by the prospect of shopping for beauty products. With this problem in mind, Birchbox was created as the simple solution. The monthly subscription box contained a wide variety of beauty samples, and customers could buy the full size of whichever product they liked. In short, Birchbox made the beauty shopping experience easy for the casual consumer.
Since the brand’s launch in 2010, Birchbox has grown to a nine-figure business that now has access to thousands of products, offers over 100 types of boxes for consumers, and has expanded globally. Listen to this podcast episode to learn more about Beauchamp’s thoughts on scaling relationships, building a trustworthy brand, and appealing to your target customer.
If there’s any other type of content you’d like to see that would be valuable to you during this time, please don’t hesitate to reach out at [email protected]
- Why people weren’t shopping for beauty products online in the mid-2000s
- How this problem inspired Beauchamp and co-founder Hayley Barna to launch their beauty subscription box, Birchbox
- The idea of the “casual consumer” and how this demographic became Birchbox’s target customer
- Why Beauchamp doesn’t view beauty stores like Sephora or department stores as competitors
- How Birchbox launched its beta test in 2010, and what it took to grow its customer base
- Beauchamp’s thoughts on scaling relationships and building a trustworthy brand
- What Beauchamp is most excited about when it comes to the future of Birchbox
Full Transcript of Podcast with Katia Beauchamp
Katia: The current one? I guess I hired myself. So, Birchbox came out of a business school ambition that was much lighter than starting a company. The ambition was just to learn how to write a business plan. So, my co founder and I decided that before we graduated, we wanted to learn how to write one, we were good friends, we thought we had complimentary skillsets and so we set out on this project of write a business plan. And we looked out in the world, noticed female founders were more in style, if you will, accepted.
And the conversation for female founders was serving a female consumer, there was a lot happening in fashion. And so, an obvious adjacency was beauty, to fashion. And nobody was talking about beauty. And we were confused by that, we were business school students and we thought, isn’t this a big industry? Why is no one also trying to disrupt the beauty industry while they’re disrupting fashion?
So we thought about it and we did a little bit of research. And we realised that in 2010 only two percent of beauty was sold on the internet. And that was staggering to us. But more staggering, was that there was no signs of change. There was no uptick, there was no change in the trend. And we just got so excited. We legitimately felt like we just landed on a treasure. And we were like, “Oh my gosh, does anybody know that beauty is next? And we are going to be the ones to figure this out.”
Now backtrack, we actually started doing research and we realised beauty had a huge moment in the ’90s with internet 1.0, I guess we’ll call it, we didn’t know that at the time, but we just knew that more people were spending their time looking for information about beauty and content about beauty and it was natural to think about closing the loop there. So, we talked amongst ourselves initially and said, “Why isn’t this happening online?” And we came up with a hypothesis that the general friction in shopping for beauty overall, is that there’s too much of it.
And for most consumers that’s the inherent question of why are there so many choices of shampoos, mascaras, when do I put a serum on? There’s just so much to navigate that we were economics majors and we recognised this idea of a paradox of choice, people are opting out of the choice, a lot of people. And at least, that’s how we felt. And we also obviously recognised that beauty is such a tactile category. People wanted to play with it and smear it and see the colours and smell it, that the internet was just not an option. So we hypothesised that the two percent of beauty soled online, was 100% replenishment. Which is, I already have this thing and I’m going to buy it again.
And that became a really big opportunity in our minds because we realised that the beauty brand, the industry was just launching new stuff all the time. And the internet wasn’t even possible to deal with the new things. The internet at this point, only had the potential for replenishment. And we felt that was a really big incongruence with the goal of the industry that was constantly innovating, constantly launching, constantly changing. That the internet could only deal with replenishment. And we just sat up and said, “We’re going to give the internet the potential to sell you a beauty product for the first time.”
And how would we do that? And we recognised the steps for a consumer involved, hearing about it from somebody, ideally someone you trust who is avid, and then depending on the price you go and you try it, if you can. You go to the department store, you go to Sephora, so we just tried to collapse that funnel of saying, “Okay, well we have to build a brand people trust, which is the hardest thing. We have to give you a finite amount of choice and we have to give you this ability to try before you buy.”
And in about 48 hours from, what’s going on with beauty online, we had the business model of Birchbox that you really see today.
Nathan: Yeah, wow. So, how has the company evolved since fast forward to now, 10 years later? Can you give for people that haven’t heard of you that have been living under a rock, what kind of, yeah?
Katia: Well, in some ways it’s evolved a lot and in some ways it’s the exact same concept. When we launched, the idea was very simple. We would send you a monthly box of personalised samples, 10 dollars a month and it was US only. And it was beauty products only. And the idea was you would get the product to try, we would continue to make you content and serve you with the content about that product. And then invite you to purchase from us with a loyalty programme that made it compelling. And today, I’d say some of the biggest evolutions are obviously the amount of product we have. When we launched we had eight things, now we have thousands of things. And every single month, because of the amount of different profiles, we’re creating up to about 100 to 200 box types in the US and an additional 100 were now global. So, we have operations in Europe.
We have a grooming box too, which creates another 10 to 30 different box types. So the amount of things that we’re sending out into the world every month has really changed the amount of personalization needed. And I think the other big change that I feel for Birchbox is when we identify the problem, which is still a very similar problem today. There’s so many choices and how do we make discovery joyful?
I don’t think we really understood the opportunity that we now understand, which is it’s actually not joyful for a consumer who is not passionate about beauty. And the industry really has pandered to the consumer who loves beauty. And almost assumed that the choices were pleasant, because look at all these options. You can buy something for six, you can buy something for 60, that gives the consumer this range, this optionality. But for the majority of consumers who are not the hyper passionate consumptions, “I want this so bad, I just want to play in its store for hours in a mecca that is gorgeous.” For most of us, that’s not enjoyable. We are literally confused or we don’t have time to navigate it. So we end up basically just doing the same thing for decades.
So, the biggest pivot is in the focus of who we want to serve at Birchbox, which is the casual consumer. So, we have obviously respect for every consumer, but we are very distinctly building for someone who is not passionate about beauty, who is purposeful and who we are not trying to convert to be passionate about beauty. We believe every consumer has the right to feel joy when they are in a category that’s discretionary, which is this. And not feel bored or confused or inadequate. So, that’s the purpose for us, is how do we make discovery delightful for that consumer. And that’s the biggest pivot, is just being much more targeted on a consumer who doesn’t love beauty, who probably doesn’t love make up as much, who is much more about they’re best natural self, but not as much about contouring or transformation or anything that would take, frankly, time.
And that has actually informed some of the other biggest changes in the market, which is now we have real competition. Particularly in the US. But as that competition has come up, I think they’ve also done the natural thing which is serve the consumer who loves beauty. And so, that continues to be a really helpful prioritisation for us and a focus for us, which is that, that’s not who we serve.
Nathan: Yeah well, that’s really interesting. Just so people can get an idea of scale, would you be able to share top line annual revenue, customers, anything?
Katia: I can. We’re large. Sometimes it’s staggering to think about it because we’ve been large since early days. It happened very fast for us. But, the bottom line is this is still a very, beauty at most is 15% online now. And we all know that in this moment with the Corona virus, there is going to be a shift in the channel penetration. There’s a really big opportunity still for this category and I know that subscription businesses, as a subset of e-commerce, are now considered the fastest growing part of e-commerce now, because I think the idea that you do the work of discovery for the consumer, is becoming a more accepted and enjoyable concept. So, I think that our aspiration just to be very clear, is to be a key channel in the same way you would think of Sephora or Mecca.
You would think of Birchbox to buy your beauty, but for this customer. So for someone who is like, “I’m not obsessed.” We want you to be like, “Oh, so I should go to Birchbox.” Who has the same philosophy around beauty that I have or somebody that you cared about, your friend, your loved one. You would say, “You would really prefer Birchbox as the place.” So, our ambition is huge, we want to be a global, major channel in beauty. And there is still a lot of room because [inaudible] talked about before we started this interview, there have been a lot of challenges. But in building a business for 10 years, and figuring out how fast to build it, how fast to expand, those are things that are really difficult and exciting. But they’re not as straight forward as they could seem or it can seem from the outside.
Nathan: Yeah, and I’d love to delve a bit deeper on that. But before we do, I find it really interesting around this pivot, around this specific kind of consumer where to be honest, it sounds like they would get the most value from your product and probably would be the most stickiest. Because they’re getting the most value because you’re removing that friction that they would have.
Katia: And not only do they get the most value, but the industry gets the most value from this because we’re not focused on taking the beauty industry pie and taking our slice away from department stores. There’s a lot of changes here in channels. We’re focused on making a new pie. Because our hypothesis and our data shows this customer is under consuming because when you are not a priority, when this is not your passion, you’re not trying to consume better. Most of our customers describe themselves as having set their routine in their teenage years and largely doing the same things into their 30s.
Maybe here and there they trade it up, but they’re not passionate about exploration and frankly, most of us who are this consumer, I consider myself this consumer though I know a lot. We all have the experience of going to a store and being up sold and then being very frustrated, buyer’s remorse, why did I do that? I don’t understand why I bought all of this, I don’t understand how to use it and frankly it ends up not being something that you enjoy. So, the concept that this consumer deserves joy and to feel empowered, just as someone who is passionate would do the research and then say, “I know I want to buy a 30 dollar shampoo, I’ve done the research, I understand the ingredients.” This consumer can have this very lightweight way of suddenly having an opinion about where they want to direct their discretionary dollars and saying, “Maybe I want to invest a little more in skincare or I really do feel I’m getting the return on investment from a good shampoo, I’m going to buy one, I’m going to finish it.”
So, that’s really kind of how we describe joy for this customer, is feeling smart, feeling like you’re a smart consumer in this space and feeling like you know where you want to invest, is really a joyful feeling for a lot of us. Not just the amount of beauty. That’s a different category of joy, like I just want everything. It launches, I want it. So yes, exactly, we think that this is tailor made for this consumer to have a really different experience without changing their philosophy and their priorities. And we also think that’s a win for the industry because that basically allows this consumer to consume more, but on their terms without having to be in this sales environment that feels pressure and feels like it could come with buyer’s remorse at the end.
Nathan: Just on this topic, because I find this really fascinating because so often when people launch businesses, they try and scratch their own itch or they think that they are the consumer. Is that what happened with you at the start? You guys thought you were the consumer?
Katia: Yeah. Yes, because everyone told us at the start that Birchbox was a dumb idea. We were like, “Well, we’re 27 year old smart women and we feel we would pay for this.” Everyone’s response was no one will pay for this because sampling was seen as a free gift. And consumers were used to getting it for free. And we thought, well we’re not stupid. We would pay for this. We feel that the way sampling is done is very different from what we’re trying to do. Sampling in 2010, 10 years ago, was much more about creating loyalty with an existing consumer. Whether it’s with the retailer or with the brand, through a gift. And most brands told us that they estimated 90% of their samples were never opened. And we were like, “Oh cool, so a gift that goes in the garbage, how lovely.”
so, we really tried to show that sampling could incite a purchase, with the right context, with giving it to somebody with intent. And also by the way, charging someone for it versus saying, “It’s a free gift.” So saying, “We chose this for you, it’s going to work for your needs. You might not love it, but it’s going to work for you, it’s not a myth. And you bought it so you might as well try it.” And that was a very, very big shift and yeah, we were definitely thinking of ourselves though we didn’t have a name that now we have, the casual consumer. Understanding that 70% of the market, we absolutely didn’t know anything about the industry, but we definitely felt that we were women who were semi engaged in fashion, semi engaged in beauty, just it wasn’t our first priority.
And we were looking at each other like, “Do you know how to use this? I don’t know how to do it?” We were like, “We’re smart.” And it just boiled down to, we don’t care enough. We’re not buying beauty magazines, we’re not like, “I’m so interested. Let me just sit down here and figure this out.” We were fine and this idea of fine in a discretionary category that’s also marketed to us to be so fun, that’s not what we’re experiencing here. What if more people feel like this? Fine or in a rut and how do we change their whole experience, because we deserve it too.
It’s our money, it’s our time. And we shouldn’t feel rara about it. That’s how we felt. And so yeah, we were thinking about us but like I said, we didn’t have some sort of sophisticated view of this. We were just like, other people must feel this way. That was the thought.
Nathan: Interesting. So, talk to me about the early days, how did you guys launch, how did you guys get your first batch of subscribers? How did you go to market?
Katia: We went to market initially in a beta test. And for that we had 200 spaces, I guess, or boxes we knew we could make. And we basically went to people we knew, that were not our friends, but we knew. And we said, “You know us, so please don’t sign up, but will you share this with your network?” So we selected people who were in law schools or consulting agencies or a key member of their community and we thought that they had enough reach. And we just asked them, “Will you forward this email?” And the email invited people to pay us $20 for two months upfront for this, describing what this was. And that’s how we launched and we were able to sell the 200 boxes very easily from that. We sent about 40 emails.
And then we amassed, we enlisted about 1000 people. So once we came out of beta, just from that group, who started telling their friends, we then used that list to start the business in September. We started in March 2010 and then we launched out of beta in September 2010. And we started with a little over 600 customers.
Nathan: Yeah wow. And to first obtain the samples, did you just go to a big box store?
Katia: We wanted to, but we knew we had to build relationships with these companies because, that would be illegal, basically. You can’t sell someone’s product, you can’t put their brand on your site. We didn’t want to start the relationship that way. Getting 200 would have been hard to, so we had to go to brands and I cold-emailed brands, that’s really what I did, was just reached out to them and said, “I’m going to change the beauty industry and this is what I admire about your brand. And I would love some advice, can you give me 10 minutes.” And I was in business school so I think that helped. And then those calls, the ones that said yes, I asked for meetings. And in the meetings, we pitched them to be a part of the beta. And we tried to get them to agree that what results in the beta would allow them to then work with us out of beta.
Nathan: You talked about one thing that was really important in terms of that funnel when you talk about that buying experience, was build a brand people trust. I’d love to hear from your experiences, what does it take, what do you think, what are your core elements, what are the things that you guys have done in the past 10 years to build a brand that people trust?
Katia: It takes honesty. It has to be real for you. Caring about the consumer has to be, it’s the only thing that matters and that has to be something that the entire team gets lit up about. And then the consumer feels it, not trying to trick people into buying something, not trying to bate and switch people into being a part of this, but rather actually setting clear expectations with consumers, delivering on those expectations, exceeding expectations and when you fall short of expectations, which is inevitable, facing it. And owning it. And talking about where are you in your career, in the stage of the business. And what do you aspire to do? So, if that didn’t satisfy a consumer or if we had a big error, which of course we did in the early days, something would be expired that we mailed to tens of thousands of people that we hadn’t looked at. And we had to really give customers their money back, but also make sure that we cleaning up our processes and that wouldn’t happen again.
That’s how you build trust. I think that sometimes the mistakes are the biggest moments and what you do with them are the challenges and the biggest moments. And how you face them and how you take responsibility and show customers that you care, is a really big part of it. But I am consumed with the idea or the question of how you build these relationships at scale. I think it’s fascinating because obviously the way you build a relationship is one human to one human usually, but it’s the only thing that creates a true competitive advantage today.
Unless you are Elon Musk and you have some truly proprietary science, which is still a fleeting proprietary thing, the only thing you have is relationships with consumers. And consumers wanting you to win, caring about you, the reciprocity of care, is unstoppable. You can really stub your toe when a consumer wants you to win. You can really miss and you have another chance because there’s care on both sides. That’s what a relationship means. It isn’t just about trust on our side, it’s reciprocal. So, I just found that to be one of the most rewarding, fascinating and challenging things about building a consumer brand in a discretionary category, is how do you scale building relationships and that’s a little bit about how I think about it. But I think it’s an ongoing question of where the relationships are born and how do you really foster them over time.
And our ambition is to be with the consumers forever because again, we think this category of consumer, the casual consumer, is overlooked. We think that she is not a priority and he is not a priority of any other beauty company. And we want to be the home for that consumer forever. So, it’s a lofty goal. And it’s an interesting question but to the point you said earlier about this consumer, the chance for loyalty and the chance for stickiness is much higher.
You just have to overcome the initial scepticism or lack of pursuit. This customer is not looking for Birchbox, because they’re fine. They’re not sitting there being like, “I just wish I could consume beauty better.” They’re literally like, it is what it is, I guess this is as good as it gets. And they come in sceptical, which I think is also currency. And then they find something that they didn’t ever believe they would love, something that was a life changer in beauty. [inaudible], because none of this is that important, but really helped them feel that they accomplishing something more that they wanted to. And they are then converted to believing that a beauty company could actually care about them.
Nathan: This idea of building relationships at scale, when you think of all the companies that are your favourite brands, you have some form of a relationship with them at a deep, intimate level. If I think about my fiance, she has a very, very strong relationship with Glossier. Like, any product that comes out, and we’re here in Melbourne, Australia, we have an office in New York so we go to New York quite often and every time we get off the plane, she is locked in her session, she is going to go there. Because Glossier don’t even ship to Australia. But that relationship is crazy. Every new product, she stayed up late when they released the jumper. Just the Glossier jumper. Because it’s US time, it will be like three AM here in Melbourne when they opened it up.
Katia: That’s amazing, wow.
Nathan: So, let’s talk about that because obviously you guys have continued to grow. And there have been a lot of competitors that have popped up. Many here that I know in Australia as well, that I’ve seen floating around. So, how do you foster this relationship and keep building new ones but keep maintaining other ones?
Katia: I think it’s the most important question, is how do you do that when all of the context for consumers are changing? When we launched in 2010, there was no competition, there was no Instagram, there was barely YouTube vloggers. There was less ways for you to spend your time online. And that created what, I guess you would refer to as, arbitrary opportunities in terms of capturing people’s imagination in time and building relationships. We had time to do it. We actually would make, in the early days, seven minute videos, have you ever watched a seven minute video today that’s not S&L?
It used to be something where people, there was an opportunity to create more time to become more of a human in front of your consumers. And I think today it’s harder. You have 15 second increments and then maybe someone will watch the full minute and a half. Because there’s just so much more competition for your eyes and for your time. And ultimately I guess, for your heart. I don’t think that everyone’s really aspiring to the heart and the relationship like we are. But ultimately, it’s still a finite amount of time in the day.
So, I think we haven’t always done this well. I think there have been moments where you get caught up in just whatever train is working, you get swept up in the thing that everyone else is doing and we’ve done that too, where we’re just really focused and when things started changing on social media for likes and engagement, we would stray from our target customer, because it was so much harder to find that customer and it was easy to find people who would like images of beauty that are more traditional.
I think we lost our way sometimes because we got swept up in just generating the KPI’s that we thought were important, finding audience. But losing that depth of purpose and that depth of knowing what is the biggest opportunity here. And even potentially pandering for a consumer who we really have much less of a chance at being loyal and sticky and actually caring about the soapbox we feel we have.
So, it’s just been walking that back and really talking about what we believe and what we really care about. And finding the right moments and so, we really talk a lot about how our brand can feel like a human. Which is obviously the sum of a lot of humans, but how it itself feels human and how humans have different sides of their personality and we really tried to be thoughtful about every human has the thing that they will get on a soapbox about and here’s ours. And here are things that we’re going to talk to you about.
And we also have the things that are just lighter and superficial and fun and we can be both of those things. So building the personality of the human is something that we just have decided, this takes time and sometimes if we’ve done it well, then if we send an email that has 1000 words in it, people will read it. But not everything we write needs to be so heavy or weighty. So, it’s just more of a taking the long game of how do we create value for consumers? And respect that we don’t have that much time to do that. We can’t just ask you suddenly, trust us, be in a relationship with us, let’s date. We recognise that you’re on the prowl. You’re looking for where to spend your time, how do we earn that? And then as we’ve earned that, give you places to go deeper because there’s a lot of depth in what we do.
Nathan: Yeah, I love it. So, I’d love to switch gears and talk about just the current times right now, because one thing when I think of the current times, everything that’s happening with COVID and businesses and businesses taking a hit, one thing that I think is important for sustainability in any business is having a subscription business model and I think that predictability in many different ways. I’d love to hear what are you guys doing differently, have you been affected? What can and can’t you share?
Katia: Sure, yeah. I think that we took this as a real opportunity to be even more bold about the customer and about what we are here, trying to do and try to differentiate ourselves further in the market because one of the opportunities coming from this, is that there is less competition for those eyeballs. And that is very clear. People have more time and there’s less people competing for that time. So, how do we take that as a relationship building moment? And not just chasing volume and top line revenue, though there are opportunities there which are, like I said, I haven’t seen them in so many years in this market. But instead of just chasing that kind of arbitrarily without thinking about the relationship, how do we do more in conjunction with finding more consumers, because there’s time? Make sure that they’re the right consumer, set clear expectations upfront of what we are.
So, we’re just doubling down everywhere on explaining both the philosophy of what we’re trying to do and very tactically here’s what you can expect. Because to your point, how do you build relationships at scale and trust? You have to set clear expectations. And we want people to understand what they can expect from Birchbox, so that then they’re set up to value that and hopefully we are set up to exceed that. So we’re just taking more time there versus I think in the internet of before COVID, it was just a lot more about the there second ads. And how do you stand out in this market, particularly when everyone’s monthly subscription looks very similar?
So, we’ve just gotten out of that game and we put more of our resources into this effort of differentiation. And of not trying to just bring you in from the low hanging fruit of the incentive to come.
Nathan: Yeah. Kind of a direct response expecting an immediate conversion, you guys want to play the long game, put out more top of funnel content, all sorts of things like that, right?
Katia: We’re doing both but yes, it’s more of that and we are even trying to see mid and bottom funnel. If we can push more of those kind of traditionally brand or top of funnel concepts through. So again, we can establish the relationships we want. It’s also about what we want to spend our time doing. What we think is interesting. I’ve never thought it was interesting to sell someone a sample. Never found it compelling to trick you into an annuity for us. I always have found it most fascinating to understand how you can build relationships and loyalty at scale. And actually change people’s behaviour in a way that doesn’t feel in converse to their values.
Where there’s a fundamental shift, and that will be seen in spend, and it doesn’t feel to be at odds with who you are. You don’t feel tricked, you don’t feel like you are just caught up in some pyramid scheme, you feel empowered. And you invest because you want to. And I find that to be fascinating and hard. But I think that’s a really big part of what drives us, is picking something that’s hard and actually trying to drive real value in consumers’ lives and I think that, that’s a worthy way to spend our days.
Nathan: Yeah, I agree 110%. So, I’d love to talk about the now as well for anyone watching this that is thinking about starting a direct-to-consumer physical products business or brand, do you think now is a good time? Do you think now is an incredible opportunity? If so, also in the subscription space? What advice would you give as being one of the OG’s, getting into this stuff?
Katia: I honestly think that there’s not some blanket answer to that. I think it really does depend on the insight that you have. I’ve always personally believed that the insight is much more important than the manifestation of the insight, which is the product or the service. And is that insight in a particularly heightened moment of reality? Is that even more exacerbated by this, or is it less so?
I think asking ourselves that question first is the most important thing. And second, I am so happy to be in a subscription business and to your point, there’s a lot of predictability it affords and it’s extremely valuable, but I am not the person who believes everything should be a subscription. And I think asking that question of why a subscription now? Here’s my belief system of what subscription can afford. It allows a passive consumer to have a very different experience consuming. And so, for me I think that this opportunity to imagine for consumers who have to be passive, because of time or because they don’t have as much passion about a category.
What is a way to create a consumption experience that’s more like an active consumer? For people who want to spend a tonne of time. And one way in some categories, is a subscription because it allows for this introduction to product over time and it allows you to not have to choose and have to engage. But it’s not the only way to help consumers remain passive and improve their experiences. So, I always just try to think does it really make sense for the consumer, not for you. Yes, annuities are great.
Nathan: In your business model and your valuation and what investors want.
Katia: Yeah, do you really think that’s something that makes sense for a consumer top sign up for and indefinitely be paying for? Or maybe it’s a subscription that you imagine stopping, maybe it isn’t indefinite. But I do agree with you that subscription is a powerful revenue model. I’ve never thought of it as a business model. And I think that it’s something that can be a great aid to the consumer, but I do believe it’s important to be thoughtful. Is this something that is that? Or am I just trying to help people consume in a more passive way? And maybe there is a different way or maybe it’s something that ends, that evolves into something else for consumers. And that’s my opinion.
Nathan: Yeah, no I’m glad you mentioned that, because my next question was the subscription everything model. It seems that everybody wants to launch a subscription for everything. And I want to hear your take. So, you’ve answered that amazingly, so I’m curious around trends, anything that is exciting to you in the direct-to-consumer space. Where do you think the market will go post all of this stuff?
Katia: I have a lot of optimism and hope that this is a great opportunity to reimagine the rules of engagement for everyone. And rethink how we can create relationships with consumers in new ways. I think the opportunity is going to allow for creators, for entrepreneurs to maybe feel a little bit more empowered to invent reality right now. And to question the ways we all expect to engage because the consumer is more in a mindset of being upended and not maybe recognising how much we could change as consumers will allow entrepreneurs or business leaders who are entrepreneurial to really fundamentally question something and potentially create great value from that for everybody, whether it’s everybody including the company and the consumer and maybe also the environment. And saying we said, “The only way you can buy this thing or consume this thing is in these two ways. And this is how it works.” What if there were no constraints? What would consumers be willing to do?
They were willing to do this crazy thing that I think everyone thought how can you get society to agree to this? And I think that could create a lot of goodness. And I hope that there’s a real commitment to taking this moment of openness from the consumer of real willingness to change to create something that has more than just value for capitalism and really is about also building the world we want to live in, the world we want to leave to our future generations. As much as it is about creating economic incentive. Because I believe that’s important too.
Nathan: Yeah, no I love that. Thank you for sharing. We have to work towards wrapping up, mindful of your time. So, a couple of last questions. One, just around what’s exciting for you coming into the, I guess, next 12 months? What’s really, really exciting for Birchbox? And two, what are your biggest challenges at the moment? And then the last one is where’s the best place people can find out more about yourself and your work?
Katia: Sure. What we’re working on I’d say is a few things. One is that because we’ve had an opportunity coming from some challenges, but it’s been an opportunity to really refocus on this consumer. We also have decided that there’s an opportunity to create specific products and brands for that consumer. So, we launched our own brand in 2014, towards the end of 2014 before this insight around who we wanted to build for, was as really firm, and we relaunched our first brand this year. And we spent over a year and a half reformulating product and just really being obsessed about not creating a brand that is redundant in the market, that is just replicating others’ insights or others’ products. But really is specifically thought about for this casual consumer. And our brand is called Arrow and we’ve just been relaunching product and we’ll be sampling progressively that product throughout the year. And into 2021. And we’re thinking about new brands too.
We’re working on some new ideas. Again, with this idea of this casual consumer, what are the categories that matter to them? And are there the right products in those categories at the right price plan, with the right positioning. So really just trying to think about how do we create real value? We don’t want to just be another thing.
And then the other thing is that we created and invented this category 10 years ago and we’ve been dreaming for the past four years about its evolution. And have been constrained by having the right resources on our side to really reimagine it and in some ways invest in the stack, because our stack is really old from a technical perspective. So we’re doing that now, we’re finally in a place where we can rebuild everything and we have big plans to change the way a subscription is even envisioned for our consumer. And introduce a new way of engaging and hopefully building relationships with consumers next year.
So, we’re well in that project, we’re far into that and really excited about it. And so those are the two things that are, not new, but invigorated focuses for the company.
Nathan: Yeah wow. Exciting. So you guys aren’t using Shopify?
Katia: We were pre-Shopify. We were so early that nothing existed that now exists where you can just take over curly and plug it into Shopify and we don’t have some of these even core functionality that is wonderful about Shopify, because we built something a really long time ago and there’s a lot of customization in what we do and how it interacts with this recurring revenue versus an e-commerce shop.
So, I won’t bore you nor my technical, but it’s really tied our hands with the vision of what we want the consumer experience to be and we are untying our hands. And have a lot of ideas of how we can create even more value for consumers and continue to stay relevant as a service and as an offering. So, I’m really pumped about it. It’s been a long time in the making.
Nathan: Yeah, I can imagine. Amazing. So, last question is, where is the best place people can find out more about yourself and Birchbox?
Katia: So Birchbox, you can go to birchbox.com, probably going to Birchbox on Instagram is a great place. We have UK, we have Spain as well depending on where you’re listening from. For myself, I don’t really have a landing home. I’m not very active on Instagram just on my personal channels. I don’t know, you can just reach out to me. Ping me if you have a question.
Nathan: All right. Amazing. Well look, thank you so much for taking the time.
Katia: It’s so nice to meet, thanks for being so prepared and for all the great questions. I really appreciate that.