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Birchbox: a Laboratory for Shopper Behavior

Ray Hartjen
Ray Hartjen
Director, Content Marketing & Public Relations

Online retailer looks at its first physical store as a learning “laboratory” to better understand its shoppers.

Blog_Birchbox, A Laboratory for Shopper BehaviorAmong the retail-related stories emerging last week, the one with the most “legs” might be the story of Birchbox, famed online retailer of cosmetics, opening its first brick-and-mortar store in New York City.

An online merchant opening physical stores isn’t a new phenomenon, as stores can be great branding tools and showcases for products and services. What is new about the Birchbox store is its description by Birchbox co-founder Katia Beauchamp as a “laboratory.”

Birchbox is known for its monthly subscription service, where for just $10, customers receive a shipment of cosmetic product samples. Since it’s launch in 2010, the e-commerce startup has acquired more than 800,000 customers, but has discovered that only 30% of its revenue comes from full-product sales. In other words, Conversion is low – most customers are paying their monthly subscriptions (comparable to Traffic), but the online store is not converting them into buying the products they like.

Birchbox is opening it’s SoHo brick-and-mortar store so that it can better understand its shoppers and their behaviors, and better design its click-and-mortar store to meet their needs. With better met needs will come increased online store performance.

While many retailers are still stuck using vernacular like “multichannel” and “omnichannel,” it’s important to note that shoppers don’t use those terms.  Shoppers think about “shopping,” and increasingly, shopping crosses all channels and retailer touch points.

Just like brick-and-mortar stores are finding it more and more difficult to compete on product price and placement alone, their click-and-mortar brethren are seeing the need to deliver differentiated experiences and value propositions.

Be it irony or coincidence, it seems that what was once “old” is now “new” again. More importantly, the Birchbox story serves as another signal that retailers need to provide a comprehensive shopping experience for their customers – whether it’s online, in-store, or both – and before retailers can delight shoppers by meeting or exceeding expectations, they first must better understand them.

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