Birchbox Business Model: Strengths, Benefits and Global Presence - Essay Sample

Introduction

Birchbox business model is a New-York City-based online monthly subscription service that provides sample sizes of different beauty, gloomy, lifestyle, and tech products (Van Letht, 2016). The Birchbox business model provides numerous benefits to the firms that apply it. Some of the strengths these firms get include high customization, global presence, and a good chance to invest in different channels of sales (Van Letht, 2016).

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Birchbox business model is currently operating in six nations with more than 1 million subscribers and 500 brand partnerships including renowned firms such as MAC and Lancome (Warfield, 2019). Glossybox is an example of a company that also provides sample sizes of different beauty, grooming, lifestyle, and tech accessories albeit being based in Berlin, Germany (Anonymous, 2020). Glossybox mainly focuses its operations in the European market, but the company is looking to increase its market to the United States. The only challenge with Glossybox is they do not have an online shop, unlike Birchbox, therefore their products are not availed to a larger audience (Anonymous, 2020). Finally, Birchbox has decided to purchase the French firm JolieBox, to extend its operations, since the company has a model canvas that resembles theirs.

JolieBox is an online French startup that provides subscription services for beauty, glooming and lifestyle products. JolieBox has recently struggled with trying to grow its subscription rates and brand presence. Birchbox has decided to acquire the start-up since it offers identical service though in Europe (Cutler, 2012). With this acquisition, JolieBox will be able to get market for their beauty brands and products in the country, and globally, since Birchbox is a marquee international brand. On the other hand, Birchbox will tap into more workforce, and gain presence in France, the UK, and in the future several other continental regions (Cutler, 2012).

Unlike web-based brands, e-commerce companies experience intense competition, and to make them globally competitive they will have to result in acquisition in different regions, and also creating an online presence (Cutler, 2012). Glossybox is on its path to becoming the ultimate platform for beauty experience for German consumers. Since its establishment in Berlin, the firm has become the leading provider of luxury beauty samples, unlike JolieBox which struggled in France and was later acquired by Birchbox (Cutler, 2012).

Glossybox increased their brand awareness to global clients when they were acquired by The Hut Group, one of the world's leading online beauty and well-being businesses (Doell, 2020). Glossybox has managed to develop a portfolio of influencers and providing recurring sponsorships to the best-performing clients. This strategy has also boosted their conversion rates tremendously with time as their target clients saw their favorite influencers often featuring Glossybox products. Glossybox has also been able to scale efficiently more than 300 posts in eight nations, and have also managed to maintain a strong relationship with their best influencers by decreasing their average cost per view down to just EUR0.01 (Doell, 2020).

The main aim of reducing the average cost per view down is to form a strong partnership with micro and macro celebrities on YouTube and Instagram, who will ultimately help the tap into their target demographic, and result into high engagement rates that will, in turn, maximize their conversions (Doell, 2020). They first wanted to try out snew content presentations and trends with different audience demographics with smaller influencers in order to replicate the best performing combinations with larger personalities. The reason why Glossybox decided to copy the Birchbox business model is to help their workers specialize in a specific role with the overall goal of enhancing quality results that will, in turn, help them to maximize their conversions. The business model will also help employees to work collaboratively in departments to hasten the completion of important tasks, and for the swift realization of their objectives (Doell, 2020).

References

Anonymous. (2012). A comparison between Glossybox and Birchbox. Retrieved from: https://www.grin.com/document/282909

Cutler, M.K. (2012). Birchbox Breaks into Europe with Acquisition of France's JolieBox. Retrieved from: https://techcrunch.com/2012/09/13/birchbox-acquires-joliebox/

Doell, J. (2020). The success factors and trails of Glossybox. Retrieved from: https://www.sponsokit.com/success-stories/glossybox-mGF8gzyP6ZAbCrHTe

Van Letht, T. P. (2016). Typologies of Subscription-based Business Models. Rotterdam School of Management. Retrieved from: file:///C:/Users/User/Downloads/Tim-van-Letht-418718-Thesis.pdf

Warfield, N. (2019). Birchbox CEO is looking beyond beauty connoisseurs for its next phase of growth. Retrieved from: https://www.cnbc.com/2019/10/27/birchbox-ceo-is-looking-beyond-beauty-connoisseurs-for-growth.html