1. BIRCH BEAUTIES

2. 1
Introduction
Isabella is a 22 year old college student who is always looking for amazing products at
an affordable price. She not only wants a bargain but also cares deeply about giving back.
Isabella volunteers at the local animal shelters, after school programs, and charity
marathon events. Birchbox was given to Isabella as a birthday gift for three months, but
she never really connected to the company, so she did not sign up for a subscription on
her own. However, Isabella loved the products she received. What can Birchbox do to
connect with individuals on a more personal level?
Revolutionizing the online retail business was not a task for the ordinary person. Founders Hayley
Barna and Katia Beauchamp stepped out of their box when creating Birchbox. Birchbox initially started as an
online subscription business aimed towards every woman.
According to the founders, there is no one specific target
market. Once Birchbox became a success, Barna and
Beauchamp went even further out of the box when they
decided to create Birchbox Man. They were the first beauty
online subscription business to attempt to target the male
consumer. Birchbox is continuously ahead of its competitors
in terms of new ways it reaches new customers. Not only does Birchbox have quality products at an affordable
price point, but they also offer one of the most realistic loyalty programs.
Despite Birchbox’s forward thinking,
it does have areas of opportunities. Ipsy1 has a
stronger social media presence. Both Ipsy1 and
Birchbox customers receive points for posting
on social media about their monthly
subscription products. What makes Ipsy’s
social presence stronger is they allow their
customers to see what is inside their box
before it arrives if they share a specific Ipsy1
post on Facebook. Ipsy’s make-up segment is
also more profitable because of its
partnerships with major competitors within the
cosmetic industry such as Smashbox and
Urban Decay. MAC1 is also a major
Competitors
 Skin care business
 Achieving point
requirement is
feasible
 Target all women & men
 “Upcycling” challenge
Not partnered with
industry giants
Focus on male
engagement
Weak social media
presence
Focus on major industry
giants
Continue to target males
Try new marketing
approaches
Niche make up
companies
Recycling not
“Upcycling” encouraged
Imitation
1 To see a full SWOT analysis for Ipsy and MAC refer to the appendix
To see a full SWOT analysis for Ipsy and MAC refer to Appendix A
Birchbox

3. 2
competitor as Birchbox begins to open its brick and mortar stores. MAC1 has a well-established brick and
mortar business with loyal brand customers. MAC’s name alone is enough for customers to be assured the
product they are buying will work.In order for Birchbox to continue to be one of the leading subscription
businesses, it needs to have a stronger social media presence and continue to build its brand to speak for itself.
Customer Analysis
“Birchbox ladies cover all sides of the
spectrum.”2 From the beginning Birchbox never
targeted a specific type of female consumer. “53%
of Birchbox users selected more than one beauty
style”1. However, the heavy users are young
women from ages 18-25. Heavy user’s beauty
profile have a variety of all the following plus
more characteristics:
 Trendy
 Light Skin
 Adventurous
Transgeneration is really key for the company
because it is not limiting itself to one target
market. The addition of Birchbox Man proves the
company also transcends gender.
“Birchbox focuses on psychographics not
demographics.”2 Shoppers subscribe for a variety
of reasons, the main reasons being:
 Recommendations
 High quality product offering
 Convenience
 Reduced product search time
 Product assortment
Customers want to be sure they are buying
products that work because they do not have
money to spend lavishly on beauty products.
“Birchboxers are a new type of customer.”2
2
Quotes from Co-Founder Haley Barna which can be found in the article “Behind the Box: Birthday Thoughts”
 Wavy Hair
 Classic
 Medium-Dark Skin

4. 3
#BirchBeauties
CreativeApproach. In order to get Isabella and other
customers like her to commit to Birchbox long term, we have
created a social media contest called #BirchBeauties.
Subscribers who follow Birchbox on Instagram will have the
chance every two months to enter a social media contest. Two
winners will be selected and will win $5,000 to donate to a
charity under Pura Vida’s Charity Collection.
Pura Vida’sCharityCollection. Pura Vida is a company
who provides jobs for artisans in Costa Rica by making
unique, handmade bracelets. Pura Vida is a company who is
already partnered with Birchbox. Pura Vida aims to do more than provide jobs for artisans. They also own a
non-profit company called Charity Collection. Charity Collection is an umbrella non-profit organization that
donates to charities all over the world.4 Since each bracelet supports a different charity, sales from each bracelet
are donated to the charity that the bracelet supports.
Casual Loyal. #BirchBeauties will convert casual users into loyal customers because people want to be
associated with a company who participates in philanthropic events. In a survey3 I conducted, 54% of
participants, ranging from 18-25, said it is very important to them that a company actively
participates in philanthropic events. The most important finding that came from the survey3 was that
90% of respondants said they would participate in a social media contest if they had the chance to
make an impact. Birchbox will be able to retain its young, trendy, and socially conscious customer if
they can relate to the customer in a personable manner. By requiring participants to be a Birchbox
subscriber, customers will begin to extend their subscription in hopes of entering the contest. Once
word about the contest starts to gain momentum more and more subscribers will begin to participate.
Millennials who have received a Birchbox gift subscription or who have subscribed for a certain time
period will begin to see the company is more than the products it sells. The company will begin to
Contest Requirements
1) Birchbox subscriber
2) Upload a picture on
Instagram of themselves
with favorite
product/Birchbox
3) Reason why they love
Birchbox & which charity
touches them the most
4) Use the hashtag
#BirchboxBeauties
3 Survey questions and results can be found in the Appendix.
4 A list of all the charities who Charity Collection donates to can be found in the Appendix

5. 4
break down its barriers showing its millennial customers who are becoming increasingly concerned about the
environment, animals, and their health that Birchbox understands. The social media contest will show its casual
customers that Birchbox is a company that wants to give back and be a part of their life. The casual socially
conscious, trendy millennial subscriber will become a loyal subscriber if it sees Birchbox is about changing and
inspiring the world because this generation was the generation that was stated would change the world.
From Implementation to Profit. In order to ensure profitability, contestants must be a Birchbox
subscriber. Despite having to donate $10,000 a month to a charity,
Birchbox will be retaining more subscribers which will balance out the
monthly donation in the long run. According to Deluxe.com, a brand
image can improve recognition, create trust, support advertising, build financial value, inspire employees, and
generate new customers. Therefore, Birchbox will not only increase their revenue, but also receive these
priceless benefits from actively participating in philanthropic events.
Barriers to Entry. Every two months, Birchbox would be donating $10,000. According to PrivCo,
Birchbox’s revenue for 2014 was $139 million dollars, so $10,000 every two months will not affect net profit
substainually. Birchbox will also be able to claim a tax deduction due to the amount of money donated to
charity. The tax dedcution will vary depending on which tax bracket Birchbox
falls in that year. There is no involvement from competitiors in philanthropic
social media contest. In order to successfully execute this creative approach to
convert casual subscribers to lifetime subscribers, Birchbox needs to promote
the contest consistently on Instgram and other social media accounts.
Brand Position
Birchbox is positioning itself to serve trendy, yet socially conscious 18-25
year olds who try to give back as much as they can. Birchbox will remain at
its current price point and continue to offer customers high quality products at
an affordable price. “Consumers around the world
are saying loud and clear that a brand’s social
purpose is among the factors that influence
purchase decisions” (Nielson, 2014). According to Erik Medina, Vice President of
The Future’s Company, meaningful is the name of the game and companies need to
make a statement that they have values and care about the world.5 Birchbox will
transform itself from an impersonal company to a socially responsible company that
wants to help customers create magical moments in their life.
5
Taken from Erik Medina’s speech at the2015 Retail Summit

6. 5
Birchbox&Beyond
Expansion Strategy. While converting casual subscribers into
loyal subscribers and connecting to Birchbox’s current majority
customer is important to the company, the company also needs to
grow. The expansion plan has two major components that are aimed
at the same target market. The first component of the expansion plan
is called Forever Birch which is focused on a store-within-a-store
concept. A Birchbox store will be placed inside Forever 21. The
shop will be scaled back compared to the Birchbox’s 4,500 square
foot SoHo flagship store, but will replicate the three key interactive stations that make visiting Birchbox a
unique experience: the lip stick swatch station, Try Bar, and Build Your Own Birch (BYOB) (Birchbox, 2015).
The second component is called Birch for a Change which is a program geared towards providing high school
girls in poverty stricken neighborhoods with the opportunity to aid in the development and execution of
marketing events. Birchbox will partner with Girls for a Change to allow girls in the organization the
opportunity to see how marketing events are taken from planning to execution.
TargetMarket. This expansion strategy is
geared towards targeting centennials.
Centennials fall in the age group 0-18. The
portion of centennials this expansion strategy is
targeting is 13-18. Birchbox is personalizing
their connection with subscribers 18 and older
with their participation in social responsibility, but centennials are at a different stage in life. According to The
Future’s Company, centennials will drive many of the changes we see going forward in the new century, but
aren’t saddled with impossible dreams. Centennials are in the early stages of figuring out who they are, where
they what to go, and what is important to them. Birchbox needs to connect with their younger target market now
on a personalized level while they are still forming their brand preference and still in the discovery phase. 72%
of centennials agree that “having new stuff is overrated when what I have already is good enough” (The
Future’s Company, 2015).
Therefore instead of marketing “stuff” to centennials we need to market personalization and experience to
these emerging customers. The number one rule when attempting to reach centennials is to place the experience
of shopping first.5 In order to reach centennials, Birchbox needs to be interactive, but also provide meaning to
the customer. Based on research done by the Future’s Company, 68% of centennials say they worry about not
being prepared for the future rather than saying they’re too young to worry about it. Retailers need to plan on
5
Taken from Erik Medina’s speech at the 2015 Retail
Summit

7. 6
providing an experience for centennials, but also on how they can prepare them for the future. Retailers need to
figure out how they can use their resources to make a small impact that will last a lifetime. No matter if we are
targeting millennials or centennials, experience and social responsibility is what both generations are looking
for when choosing which retailers to remain loyal to.5 Centennials take it one step further and want a career
added value given to them.
CustomerLifetimeValue& Market SizeAnalysis. According to the Social Librarian, Centennials have
an estimated population of 23 million, which continues to grow rapidly. They have a combined buying power of
$43 billion and influence an additional $600 billion of family spending (Dan Schawbel, 2013). There is
potential in this market because of the amount of influence they have. Centennials have barely entered or have
not yet entered the workforce. Not being financially established may scare some retailers off, but in order to
connect with centennials Birchbox needs to start planning on attracting them now. “We need to expect
emboldenment, anticipate empowerment, and invite them in in order to be successful” (The Future’s Company,
2015). No other subscription business is positioning itself to target centennials. They are still focusing on
millennials. The time of the millennials is now being overshadowed by centennials. Retailers need to get on
board with centennials or get left behind because these emerging customers are not as patient as the millennials
were (The Future’s Company).
Partnerships. Birchbox will partner with Forever 21 and Girls for a Change.
Forever 21
Why Forever 21?
 Targets centennials
 Affordable prices
 Trendy
 Established brand name
 Lacking in beauty sales
Forever 21’s Role
 Promote customers to
subscribe to Birchbox
 Provide clothes for
fashion shows
Girls for a
Change
Why Girls for a Change?
 Targets centennials
 Charity Organization
 Provide Birchbox with
connections to girls in the
program who need
assistance
Birchbox’s Role
 Provide girls in the
program with an
educational experience by
using a hands on approach
 Introduce girls to the retail
and fashion industry
5
Taken from Erik Medina’s speech at the 2015 Retail Summit

8. 7
Marketing Campaign
BuddyMarketing. Forever 21’s primary role is to promote its customers to
subscribe to Birchbox by offering discounts for every month customers show proof
of subscription. Forever 21 would also offer a 15% discount off an entire purchase
when a customer initially signs up for a Birchbox subscription. Every month Forever
21 will offer a $5 off an entire purchase if customers can provide a picture of the
items they received in their Birchbox for that month. Employees would also be
required to place a Birchbox flyer in customer’s bags. In return for promoting
Birchbox subscriptions, Birchbox will exclusively use Forever 21 products in
handouts and marketing efforts.
Rip the Runway. Birchbox will host 4 fashion shows a year: Spring, Summer, Back to School, and Fall. All
fashion events will take high fashion trends and translate them into everyday wear. All products and clothes
used will be from Birchbox and Forever 21. The reason behind choosing spring, summer, back to school, and
fall as the four foundation themes are because these are the major fashion transitions that are essential in a
young girl’s life. Instead of being a trend follower, we want these girls to be the trend setters in their high
schools. The fashion shows provide young girls in the Girls for a Change program the opportunity to gain
insight on marketing strategies and execution. Girls would be able to sit in on the planning meetings and even
be models if they choose to be. The idea behind allowing the girls to be a part of the planning process is to

9. 8
“invite young women to design, lead, fund
and implement social change projects that
tackle issues girls face in their own
neighborhoods” (Girls for a Change, 2011).
Girls will be introduced to high fashion and
quality products they normally would not
have the chance to experience or learn about.
Girls in the program will form a strong
personal connection to Birchbox which
would make them want to become a subscriber. These fashion shows will also attract new centennial customers
because Birchbox’s makeup and hair products will be used. After the fashion shows, Birchbox employees will
have the opportunity to interact one-on-one with customers to promote subscribing. Interacting one-on-one with
the target market will increase the likelihood they would sign up for a subscription.
Fashion shows will be in a very upscale venue with exciting lighting. The atmosphere we are trying to
portray is a high end fashion show, but with colors that are in season
for that time period. The runway will be pure white, with different
colored lights directed on the runway. There will be a circle
platform at the end of the straight runway. Chairs will be covered in
silk coverings with the Birchbox logos on them. Under each seat
there will be a sample Birchbox with products from Birhcbox and
coupons to Forever 21. Along with products and coupons, there will
be a flyer with the top 5 easy tricks and tips for the season.
Financial Plan
Marketing Expenses. “Buddy” marketing is economical and efficient. Therefore, all Birchbox would need
to finance is the flyers that would be placed in each Forever 21 bag. An estimated amount for the flyers would
be approximately $1,500 a month. Creating the Birchbox store in Forever 21 will cost $20,000 to ensure the
essence of Birchbox is portrayed through every fine detail.
Fashion Show BudgetBreakdown. We want to provide a “wow” effect when people walk in the
ballroom. The fashion shows would cost approximately $20,000. The $15,000 would cover venue and lighting.
The venue is the most expensive portion of the fashion show because we want to find a location that is elegant
and grand. Clothing will be donated by Forever 21, so there would be no additional cost for styling. All beauty
make up products used will be from Birchbox. Birchbox experts would be the makeup artist, but also be the hair
stylist. All hair and makeup will be simple because the idea is to make high fashion trends into easily replicated

10. 9
everyday wear. $2,000 will be spent on creating the gift boxes that will be placed underneath our guests’ seats.
The remaining $3,000 will go towards decorations that reflect the elegant, fun fashion show themes. There is no
model expense because models would be volunteers from Girls for a Change.
Six Month Sales Plan. The financial plan below reflects a total net profit of $8,173,840 based off of a sales
increase of 10%. August sales are 20% because there will be a fashion show for Back-to-School. The Back-to-
School shopping fashion show was placed in August because of the recent delay in when customers are
shopping for Back-to-School. September there will be a 7% decrease in sales because customers have spent
most of their discretionary money on back to school shopping. October sales will increase to 15% because there
will be a fall fashion show to introduce this year’s fall trends. Due to spending in October, November sales will
drop to 13%. The fashion show will be themed on fall trends for the upcoming season. December sales will
jump to 20% because of Christmas and other holiday shopping. We expect to see more gift subscriptions
purchased. January sales will only fall 1% because many people will be updating their personal style and image
for the New Year. To help customers with their transition of out with “old, in with the new”, there will be a
fashion show to feature the hottest new trends of the current season and spring trends. Forever 21 will also be
having their “End of the Season” sale in January which will bring in a lot of traffic in the store subsequently
increasing the number of potential customers for Birchbox. February sales are projected to be 20%. Other
expenses include a one-time cost of $20,000 to create the Birchbox shop in Forever 21. There will be three
Birchbox experts who will work specifically one-on-one with customers. Based on an average employee pay
rate from Glassdoor, the pay rate for employees will be $18 an hour. A Birchbox event coordinator will be head
of the shop and will be in charge of planning and executing fashion shows. The event coordinator will be paid
$25 an hour. All employees cannot go over 35 hours a week.

11. 10
Conclusion
UnderlyingTheme. The underlying theme is connecting with customers on a personal level will lead them
to be loyal subscribers. Being a socially responsible company is simply not enough for customers. Therefore,
Birchbox needs to incorporate its subscribers in its philanthropic events in order to increase its subscribers and
turn casual subscribers into lifelong customers.
Lifelong Customers& Profits. While wanting to attract new customers,
Birchbox still needs to continue to service and satisfy its current heavy users,
millennials. #BirchBeauties is intended to provide millennials with the
opportunity to give back to any charity supported by the Pura Vida Charity
Collection. This social media contest will begin to show current millennial
subscribers Birchbox is a personable company and convert casual subscribers into loyal lifelong subscribers.
Partnering with Forever 21 will allow
Birchbox to target more centennials.
The store-within-a-store concept will
allow Birchbox to be able to show
centennials Birchbox is a
compassionate company who cares
about their customers’ needs from a
business and personal perspective. It will also allow Birchbox to interact with customers one-on-one to promote
subscription, familiarize customers with product assortment, and create relationships with its target market.
Girls for a Change reconfirms Birchbox does care about the
issues centennials are facing today. Birch for a Change
provides Birchbox the opportunity to educate young women on
retail and make a difference in their life.
Birchbox Prevails. Birchbox will continue to lead the subscription business in innovation with its new social
media contest and expansion strategy. From the creative approach with Pura Vida to the
innovative partnerships with Forever 21 and Girls for a Change, Birchbox is demonstrating it
is more than the products they sell. Birchbox is revolutionary and will increase its number
of subscriptions because they are putting customers first and focusing on catering to
customer needs and wants. By portraying that Birchbox is about encouraging change and
inspiring customers, millennials and centennials will become loyal subscribers to Birchbox.
Change. Inspire. Subscribe. Birchbox.

12. 11
Appendix
A. SWOT Analysis of Competitors
B. Survey Results
 Subscribers are constantly
postingabout receivingtheir
Glam Bag in order to see what
they receivedinside
 Partneredwith key competitors
in the make-up industry
 Receive a cute bagevery month
Customers put on a waitlist
for several weeks or months
Reaching the points
requirement is challenging
Other competitors have a more
efficient reward system
Specialized make up
companies are constantly
striving to perfect service
Birchbox focusing on skin
products
Shorten the waitlist time
Improve Reward System
Tap into the male consumer
Try to increase skin care
segment of business
 High quality of product
 Strong competitor in the
beauty industry
 Well-trained beauty
consultants
 Brand loyal customers
 High price point
 Unable to relate to the
average person
 Lack of innovation in
their marketing
 Create a different brand
extension at a lower price
point
 Try to market to the
average women not just
to professionals
 No subscription business
 Companies are tryingtoreach
outside their primary target
market
 Companies constantly changing
their marketingstrategies

13. 12
C. List of charities in Pura Vida’s Charity Collection

14. 13
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"Battle of the Boxes. Ipsy versus Birchbox." The Small Things Blog. N.p., 19 June 2013. Web. 21 Oct.
2015.

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