How Birchbox Uses Data to Find Online Success [Case Study]

Until recently, e-commerce had left the beauty industry in the dust.  Women need precise color matches for their makeup, and they like to smell, touch, and try products before buying them (Griffith, 2014).  Enter Birchbox’s sampling program, which brings the in-store experience to women and men’s homes.  Through this program, Birchbox has created awareness and demand for beauty brands that you would normally know nothing about.

Brief History on Birchbox

Birchbox was founded by two friends, Katia Beauchamp and Hayley Barna, who both agreed on one thing: Shopping for products was frustrating, inefficient, and confusing.  How were customers supposed to navigate the vast range of options? And in the growing online market, how could they try products without buying them all? (Birchbox, n.d.) The first shipment of Birchboxes went out in September 2010, and soon realized that men needed a better way to shop too.  Birchbox Man launched in April 2012, to bring guys tailored shipments of grooming and lifestyle products (Birchbox, n.d.).  For a new customer, you can sign-up at birchbox.com, and fill out your “beauty profile.” The cost is $10/month for the female box and $20/month, for the man’s box.  Each month Birchbox well send you a box of sample products that are curated based off your profile. 

How Birchbox Uses Web Analytics to Monitor Visitor Traffic and Customers

While Birchbox has done a phenomenal job in content and social media marketing, they have also done an excellent job with implementing and analyzing customer data and web traffic.  Web analytics is always intriguing, since it gives a tangible shape to visitor behavior and can play an important role in determining online success (Nagpal, 2013).  In the beginning, the effectiveness (or the ROI) of the content Birchbox produces depends by channel.  For their videos, it’s views.  For their blog, which is on Tumblr, it’s followers, unique views, and how many reblogs they get.  For the website, they use Google Analytics to track page-views, time on page, and bounce rate – there was a lot more they would like to do, but at the time, it was a work in progress (Snow, 2011).  Today, Birchbox has put a major emphasis on analytics with their traffic and customers, with an entire group dedicated to analyzing data.  Birchbox now employs people with job titles of brand campaign analyst, statistical analyst, and Director of analytics.      

From February 2013, Birchbox saw 111,917 monthly visitors, now compare that to February 2014 where they saw a jump to 334,357 monthly visitors.  This indicates that initial visitors are returning each month, and these visitors are also talking about the site amongst their social networks which is drawing in even more new visitors monthly (Boyd, 2014). 

Birchbox started off as only available online and was focused on tailoring a box to various complexions, hair types, and looks, but Birchbox’s utilization of data goes far beyond these physical traits.  “From the beginning, data has been an essential part of Birchbox’s growth and strategy …we use it to make important company decisions, and use it to guide us towards creating the best possible new products for our customers,” explained Deena Bahri, VP of Marketing at Birchbox (Adobe, 2013).  Birchbox has used big data when launching a new service or product offering, and for Birchbox Man they used both behavioral and survey data (Adobe, 2013).  Their surveys and behavioral data, Birchbox has continued to improve their product offerings and deliver what the customer wants and stay relevant.

Conversion rates have been another one of their main measurers of success.  For example, Stila Cosmetics sent a sample of one of their products to 7% of Birchbox subscribers based on their beauty profiles.  The product saw an 11.2% conversion rate into a full-sized purchased, a number that seems small, but in the beauty industry is strong for a SKU (Sultana, 2014). 

Tools Birchbox Uses to Stay Relevant

Birchbox takes data seriously and uses multiple tools to track that data from visitors and their Birchbox subscribers, because a “one size fits all” approach no longer works.  One of those tools is Custora, a predictive analytics platform for e-commerce marketing teams (n.d.).  Custora’s software analyzes data to predict how customers will behave in the future – the things they’re likely to buy, how much they’ll spend, even how often they’ll shop (n.d.).  For Birchbox, one of the areas of focus was driving their subscriber-base to make purchases in the Birchbox Shop, which features full-size versions of sample products, as well as additional beauty and lifestyle products hand-picked by the editorial team (n.d.).  Using Custora’s platform, Birchbox was able to discover activation strategies that increased profit per customer, by over 70%.  Additionally, Birchbox learned which types of customers do not respond to certain types of email marketing (Custora, n.d.).  According to Deena Bahri, VP of Marketing at Birchbox, “Custora  goes beyond reporting, helping to uncover true insights about our customers – then they make it easy to test and refine marketing strategies.” (Custora, n.d.).  Another tool that Birchbox uses, is Tealium, for tag management and analytics.  Tealium (n.d.) provides web analytics managers with an hourly feed of all their rich, correlated, event-level data, which can be integrated into any data warehouse or visualization solution.  Lastly, Birchbox uses Google Analytics and DoubleClick Floodlight.  Google’s DoubleClick Floodlight Counter tag allows Birchbox to count the number of times that users have visited a particular page after seeing or clicking one of their ads (n.d.).

Other tools that Birchbox uses for website tracking tools are:

• §    Advertising – AdExtent, Google AdWords, Google Dynamic Remarketing, and MediaMath
• §    Beacons – Chango, DoubleClick Floodlight, and Proclivity
• §    Social – Facebook Connect and Facebook Social Plugins

For those customers that are browsing/ shopping, but leave items in their cart, they have a way to get you back! Birchbox uses strategically timed emails for their abandoned cart nurturing (Burke, 2014).

As you can see, Birchbox uses a light-hearted approach and tells you exactly what you forgot in your cart, price included (Burke, 2014).  Within that email you have two CTAs, instantly checkout or edit your cart options.  It removes the friction and allows customers to go straight to their carts without having to navigate around the site (Burke, 2014). Birchbox follows up the next day, reiterating a sense of urgency. 

Something to note about Birchbox, the famed online retailer of cosmetics will be opening its first brick-and-mortar store in New York City.  The company has attracted more than 800,000 users since launching in 2010, but only around 30% of its revenue comes from full-product online sales from Birchbox.com (Groth, 2014).  Its new store is an attempt to figure out why that percentage isn’t higher.  Birchbox co-founder Katia Beauchamp describes the Soho store as a “laboratory.” The store is designed to reflect its online presence with iPads that showcase product reviews and a beauty bar where customers can test out different looks similar to the makeup and hairstyling tutorials on their website (Groth, 2014).  The SOHO store will use in-store analytics, by using cameras and heat sensors to track customers as they make their way around the store, seeing which products they’re attracted to and how they use the iPads (Groth, 2014).  Birchbox is also looking to add WiFi analytics and want to make the Birchbox app “a companion to the store.” When connected to WiFi, the app would be enabled to send push advertisements and collect customer data, like how many times the user has visited Birchbox and what products she’s purchased (Groth, 2014).

Another way Birchbox is gaining data, is straight from their box subscribers.  Each month, after you receive a Birchbox, subscribers can gain 10 points per item reviewed from their box.  On average, a subscriber receives 5 items for a possible 50 points.  For every 100 points, Birchbox gives you $10 off to use in their online store and can be redeemed in that year.  The product surveys are a mix of quantitative and qualitative data for the product, which helps gauge interest in the product, as well as possible purchase of the item.          

  

How Birchbox Uses the Data They Collect

With their trove of data on trends and demographics, which is used to help brands develop and launch their products, Birchbox is considering developing its own line of products (Griffith, 2014).  With their customer data, Birchbox will also be experimenting with more categories targeted at women.  The company is looking to explore project-based boxes like craft projects, cooking projects or party themes, as well as home décor and work supplies (Griffith, 2012).

Birchbox For the Future

Navigating Birchbox’s web and social presence, you can understand why they are at the top.  So what could Birchbox implement to keep moving them forward? Offering customer service chats, a large number of websites have a chat feature to interact with their visitors.  This allows them to offer real-time assistance and advice, promote a service/product to the visitor, and some chat applications offer integration with web analytics tools (Team Position 2, 2010).  It would be recommended that Birchbox install a ‘virtual pageview’ code linked to the ‘on click’ event of the “Chat Now” button.  “Virtual pagview” was suggested instead of “event tracking” as Birchbox would want to carry out a funnel analysis on the conversations (Team Position 2, 2010).  A funnel would be set up in GA, which would track clicks on the chat button – from initiating a chat conversation to signing up for monthly subscription, as one example.

Birchbox has set the bar high in the world of e-commerce.  For anyone looking to start an e-commerce business, Birchbox is a great brand to mimic in every aspect!

References

Adobe. (2013, May 6). 8 Marketers doing big data right. Retrieved from http://mashable.com/2013/05/06/cmo-data/

Birchbox. (n.d.). What is Birchbox? | Birchbox. Retrieved December 8, 2014, from https://www.birchbox.com/about/birchbox

Boyd, M. (2014, April 21). Best eCommerce websites: Birchbox skyrockets with subscription retail. Retrieved from http://ecommerceinsiders.com/ecommerce-websites-birchbox-skyrockets-subscription-retail-1798/

Burke, M. (2014, September 25). 3 Reasons people abandoned your shopping carts, and how to solve it [Web log post]. Retrieved from http://blog.klaviyo.com/2014/09/25/3-reasons-people-abandoned-your-shopping-carts-and-how-to-solve-it/

Custora. (n.d.). Birchbox & Custora: 70% Increase in repeat buyer conversion. Retrieved December 8, 2014, from https://www.custora.com/customer_results/birchbox_custora_customer_analytics_retention_marketing

Google. (2014). DoubleClick Floodlight counter tags - Tag manager help. Retrieved December 8, 2014, from https://support.google.com/tagmanager/answer/3281074?hl=en

Griffith, E. (2012, October 19). The beauty of Birchbox: it’s not subscription commerce, it’s marketing that women actually pay for. Retrieved from http://pando.com/2012/10/19/the-beauty-of-birchbox-its-not-subscription-commerce-its-marketing-that-women-actually-pay-for/

Griffith, E. (2014, April 21). Exclusive: Birchbox banks $60 million. Retrieved from http://fortune.com/2014/04/21/exclusive-birchbox-banks-60-million/

Groth, A. (2014, July 23). Birchbox is using its retail space to track customers offline. Retrieved from http://qz.com/237400/birchbox-is-using-a-retail-space-to-track-customers-offline/

Hartjen, R. (2014, July 31). Birchbox: A laboratory for shopper behavior | RetailNext [Web log post]. Retrieved from http://retailnext.net/blog/birchbox-a-laboratory-for-shopper-behavior/

Hayes, M. (2013, February 21). 32 Key performance indicators (KPIs) for ecommerce - KPI examples [Web log post]. Retrieved from http://www.shopify.com/blog/7365564-32-key-performance-indicators-kpis-for-ecommerce

Nagpal, M. (2013, October 25). 2013 Top ecommerce websites analytics benchmarks. Retrieved from https://vwo.com/blog/2013-top-ecommerce-websites-analytics-benchmarks/

Snow, S. (2011, August 1). How startup Birchbox uses content To sell tons of beauty supplies. Retrieved from http://contently.com/strategist/2011/08/01/how-startup-birchbox-uses-content-to-sell-tons-of-beauty-supplies/

Sultana, R. (2014, July 10). Big data series: Birchbox is all about the conversion… and its working [Web log post]. Retrieved from http://rumi03.com/2014/07/10/big-data-series-birchbox-is-all-about-the-conversion-and-its-working/

Team Position 2. (2010, September 2). Analyzing "chat quality" using Google Analytics - Funnel analysis - Position² [Web log post]. Retrieved from http://blogs.position2.com/analyzing-chat-quality-using-google-analytics-funnel-analysis