Brand Founders And Execs On What Ipsy’s Takeover Of Boxycharm Means For Indie Beauty
In this edition of Beauty Independent’s ongoing series posing questions to beauty entrepreneurs, we ask 11 brand founders and executives: What do you think of consolidation in the beauty box subscription sector as Ipsy takes over Boxycharm? How has your subscription box strategy changed this year and will it change next year?
- Conor Riley CEO, Luxie Beauty
I am really excited that Boxycharm and Ipsy will merge. We have incredible brand recognition with the entire subscriber base since we have run programs with both companies and regularly are featured. The Charmers love us and Boxycharm was pivotal in positioning Luxie to succeed in the retail landscape. Joe Martin, Boxycharm's CEO, is such a nonconventional marketer and really understands how to disrupt the industry. They gave us the ability to really push the envelope and develop our brand. This, in turn, opened so many doors.
We hope we can continue working with both companies, building exciting campaigns and creating awesome brand experiences for their subscribers. There is a lot of open ground to explore between the different market segments to create something meaningful within this combined structure. I know that, as Ipsy and Boxycharm both push to expand, there will be new opportunities for an established quality brand like ours. I just hope that they continue to be a viable platform for measurable brand growth.
- Emily H. Rudman Founder, Emilie Heathe
We have actually been considering them for a long time. It's hard to say as some have shown a lot of success, and others have not done as well as investors hoped or their pivots did not pan out. I think, in a time like this, it is a more relevant and usable type of marketing tool. For a brand like ours who has yet to take full advantage of economies of scale when ordering inventory, it is more difficult for us to make products at a cost the box companies are willing to buy at. Sometimes, they ask for payment to be part of the boxes and, other times, they want your COGS and the margins are just not there.
I think it makes sense for larger brands with high volume, but it's definitely tougher for luxury and small brands. I look at the boxes as more of a marketing/brand awareness play for us than anything else. For me, beauty still has to very much be experienced in person and, with the limited openings of brick-and-mortar and also the end of using samples in store, these types of services/boxes make more sense than ever. Our plan is to launch in boxes next year!
- Stephanie Lee CEO and Founder, Selfmade
Ipsy’s takeover of Boxycharm exemplifies why it is so hard for women of color and non-binary people to launch brands successfully in the beauty industry. Full-sized offerings (like BoxyCharm's) take away from inventory, which is expensive for small independent brands.
Unfortunately, Ipsy appears to focus on consolidating big brands under its umbrella, which crowds out up-and-coming brands and the creativity they bring to the market while also failing to serve the needs and experiences of their customers, many of whom are young femme and women identifying people of color.
We launched Selfmade as a brand this past month to provide an authentic brand experience that prioritizes community care and engagement over the corporatized and over-consumption approach to beauty. We plan to continue to explore opportunities to expand our business model to shift the culture in beauty once and for all.
- Charlotte Knight Founder, Ciaté London
We have worked with both Ipsy and Boxycharm for a number of years now and see them as a key part of our strategy, especially in the U.S. Although they go after a slightly different customer base, I think that, by joining together, they will be able to learn from each other and provide an even better experience for their customer.
Moving into 2021, the way we’ll be working with them will remain the same, offering new, exclusive products and deluxe sample sizes to their incredible subscription base of beauty lovers. In return, we get to receive invaluable feedback and data on what they like!
- Tracy Adkins Founder, Jivana
What really propelled my business in the beginning was taking part in subscription boxes, although there was definitely a learning curve in the process. As a small indie brand, if you are hand-making products, the boxes you work with may be limited depending on their MOQ. I've worked with boxes requiring anywhere from 50 to 4,000 units. It can be extraordinarily labor intensive, and there is no cash profit from the sale of the units. At best, you may break even.
The payoff comes in the form of advertising, marketing and consumer reach. I continue to track sales conversions from blog posts on my products from three years ago. Once a brand is in one box, it becomes easier to get into others. Without a doubt, this was integral in expanding my brand awareness and growing my customer base.
With large consolidations, I fear small brands will be more limited in the number of boxes they are able to work with. Small, kitchen-based brands will be deterred from boxes requiring a mass number of units because it is not feasible for them to meet their MOQ. Many of my repeat customers were first introduced to one of my products through a subscription box. Because indie brands do not have a large (if any) marketing budget, collaborating with boxes is especially enticing because of the associated scale of advertising and consumer reach it creates. With no other platform can your product be distributed, written about and hashtagged on social media by influencers and customers with little to no cost other than time.
There is certainly a benefit to having some larger box companies. They fulfill a specific space in the market and offer unique goods and services on a large scale: forums, chat groups, education. I think of FabFitFun. Yet, a place remains for smaller boxes to coexist and accommodate very niche tastes, brands, interests and price points. They are meeting different objectives in the industry, [and] work together [to] forge symbiotic relationships while still encouraging indie brands, our next leaders.
- DELANE MAZAHERI Co-Founder and CEO, Stare Cosmetics
The subscription box phenomenon is amazing! Who doesn’t want to get a box of fun goodies? From a participant perspective, there are lingering questions: Are the products really being used and repurchased? Are these items what people are really looking for? Is it translating into sales for the participating company? How well does the subscription box know their subscribers?
That said, I have been personally subscribing to several subscription boxes to research the best fit for Stare Cosmetics to participate in, which shares our same ethos. We are approached frequently by different subscription boxes and, after doing the math, I find it is very expensive to get into one of these boxes. It is a big gamble.
Subscription companies need to provide more metrics than just demographics and number of subscribers. True ROI case studies would be beneficial, especially in our evolving market. I see responses and reviews of various subscription boxes where subscribers are commenting, “no repeat products please” and “not that brand again,” which leads me to believe there is little brand loyalty.
I don’t see how indie beauty companies like us are able to participate in a subscription box with a large base because of the financial outlay. In the past, I found that mass “giveaways” of products have not translated well into sales. The color cosmetics world is still changing given COVID-19 restrictions and perhaps the subscription boxes will evolve as well. We will keep looking and perhaps we will find our match. Until then, it is fun research!
- SELMIN KARATAS Co-Founder and CEO, Kazani
Ipsy and Boxycharm are the leading beauty box subscriptions in the beauty industry. [Their] merging will encompass millions of subscription based members. In fact, they are expecting a revenue of $1 billion in 2020.
With the consolidation, the beauty box subscription sector will cater to a wider audience and they might want more products and more varieties. This will create an opportunity for brand owners. The consolidation will also help brands get in front of a larger audience in one shot.
We started a subscription service on our website that can deliver every 4, 6, 8, 10 or 12 weeks with a 15% discount on every recurring order. We do not participate in boxes at the moment, but we would consider it.
- Luis Merchan President of Consumer Goods, Flora Growth Corp.
I think it is very positive. Consumers and brands alike will be able to have bigger benefits. Distribution and availability will become increasingly widespread and brand awareness will increase. Subscription boxes are a great opportunity to increase brand exposure and awareness. They allow consumers to try and compare new products without a big commitment, and it’s a fun way to explore what is new in the market. We are actively working with subscription box partners as a way to put our incredible products in the hands of new consumers.
- Tony Rechtman CEO, Inika Organic
The quality of beauty box subscription offering to consumers has improved significantly over the last five years. For us, the sector provides an opportunity to work with many premium beauty boxes throughout the year and engage with consumers looking for 100% natural and certified organic beauty products.
As a global brand, working with a selection of beauty box companies is key to product sampling and consumer acquisition. We like to see healthy competition in the sector as this creates more opportunities, plus our consumers like to see variety within the beauty boxes. Boxycharm and Ipsy are both well respected brands, and we are sure their partnership will continue to result in a great experience for consumers. We would love to see the sector provide more opportunities for natural, clean, vegan and certified organic beauty box subscription services.
Inika Organic has increased participation in beauty boxes throughout the year. As the digital landscape has become a key focus, we wanted to ensure we could reach new consumers who were prevented from experiencing our products at spa and retail locations. As a global brand, we plan to continue the strategy of providing sampling to new consumers through premium and specialized clean, vegan, organic or natural boxes in the year ahead.
The quality and performance of our makeup and skincare can only be experienced through trial. For this reason, beauty boxes will remain key to the brand consumer acquisition to continue the brands significant growth in all markets.
- Ke Jun Qin Founder, Baseblue Cosmetics
In the past months, subscription beauty boxes opened the door for us by welcoming and introducing our brand to their community. We are looking forward to seeing Ipsy and Boxycharm making a positive change in the beauty industry by combining their expertise in this category and giving our audience more opportunities to try new innovative products. We highly value our partnerships with subscription boxes that share our vision and add value to their community. We will be on the outlook for more collaborations in the coming year.
- Suzanne Somers Founder, Suzanne Organics
People are craving the shopping experience, and they have little retail opportunities right now to talk to a salesperson or test a product at the cosmetics counter. My customers are getting that connection through my social media platforms with my shows on IGTV and Facebook Live. They ask questions, and we answer as many as we can in real time. I think that’s why we have really seen a huge take rate in my Suzanne Selects Box.
The strategy for next year is to continue what the customer is loving about this “surprise box,” full-size products at a really steep discount. Everyone is looking for a deal, but they are delighted with the products when they receive them. Word of mouth continues to be our best marketing strategy. Plus, unlike annoying subscriptions that make it difficult to cancel or pause, we give the customer direct access to their accounts and, if they are technically challenged, they contact our customer service by phone, and it’s handled for them.
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