Digital Forum: Birchbox Plans Small-Format ‘Expressions’ in 500 Walgreens Stores

Birchbox — which has toyed with retail concepts over its nine-year trajectory — may have found one that sticks.
Katia Beauchamp, Birchbox cofounder and chief executive officer, said that the company is planning to expand further with Walgreens in November.
"We are launching 500 stores with small expressions in November of this year," Beauchamp told the crowd at the WWD Digital Forum. So far, Birchbox has been opening up shop-in-shops with Walgreens, which have been "meaningfully changing beauty sales" in the Walgreens doors they are in, Beauchamp said.
Birchbox also just gave employees in 3,000 Walgreens stores the ability to subscribe people to Birchbox, Beauchamp said. "The next thing we're testing is how can we leverage humans to remove the friction for the casual consumer," she said.
The idea, she noted, is to think about what "nirvana" looks like for the shopper, and then try to create that.
For Birchbox, that means targeting a different consumer than most in the beauty industry, who often target beauty enthusiasts over those who are less deeply engrained in the category.
They call that customer "Caj" — meaning "casual" — Beauchamp said. Really, she noted, the beauty enthusiast category is a small part of the overall industry. "Ultimately, we are playing in a discretionary space," she said. "You do not need beauty to survive."
"This consumer spends a lot less individually than a consumer who is really engaged, really passionate," Beauchamp said. "Our hypothesis about the spending less wasn't the ability to spend less, it was that if you don't design a user experience for a customer who doesn't feel that passion for beauty, naturally, they would spend less."
"If you walk into a store with 40,000 on the floor and someone says, 'may I help you?' I mean, that's a ridiculous question for many of us. We can put five or six products in front of you and say, 'do you like any of these, yes or no?' 'Do you like it enough to purchase it, yes or no?'" Beauchamp said.
For skeptical casual consumers, who may not know why they would need a certain beauty product, this strategy can help encourage spending, she noted.
Before Birchbox launched with Walgreens, the company had experimented with pop-ups and its own store — and one of the key learnings was the importance of human connections. "Once we are offline and a customer can be there with us, the lifetime value increases three times from just the digital relationship we have with customers," Beauchamp said.
Really, it was the sales staff in the store that made all the difference, especially in terms of helping less knowledgable beauty consumers. "Ultimately, the humans changed everything," Beauchamp said.
Birchbox has worked to translate that knowledge about staffing into its Walgreens-based locations.
"They have so much experience in scaling retail experiences, they have 8,000 doors…they have 100 percent conversion. People walk into these stores with the intent to buy," Beauchamp said.
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