Birchbox rides trend of made to order beauty

Call it beauty by subscription.

For the monthly fee of $10 for women and $20 for men, Birchbox is offering its customers a curated package of personalized beauty and grooming products by home delivery.

Beauty boxes have become a consumer trend in the past few years. Research reported by the NPD Group finds that trial is the primary factor in behavioral changes about beauty and new product purchases.

While there are other beauty box companies, Birchbox's samples and business savvy are set apart by the enterprise's similarities to its namesake—birch trees, said the company's co-founder Katia Beauchamp.

"Birch trees are classic and modern, and grow better together as a family," said Beauchamp.

And growth is exactly what Birchbox is aiming for. Nearly four years since the company launched online, the beauty subscription e-commerce pioneer has gathered over 800,000 subscribers worldwide, spread throughout Europe and the U.S. The company recently announced plans to launch in Canada.

Katia Beauchamp, Birchbox
Scott Mlyn | CNBC
Katia Beauchamp, Birchbox

The company's aggressive growth has attracted investor cash. As a privately held company with an estimated $125 million in annual revenue, Birchbox secured a $60 million round of Series B funding led by Viking Global Investors, and is now valued at $485 million pre-money valuation.

"We are a digital company first and foremost and work well as a customer acquisition tool," said Beauchamp. "Birchbox wants to continue to grow our footprint with new consumers who feel make their retail experience more efficient and delightful."

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Beauchamp added that before Birchbox, customer trials were limited, and occurred mostly as gifts with purchases. This was a loyalty tool with no proven method of return on investment by beauty brands, she said, and the method wasn't very successful in building a client base.

As for the future of the $400 billion dollar beauty industry, Beauchamp said beauty sales are not slowing down anytime soon.

"The beauty industry's traditional and new brands will have to converge consumer's expectations," she said. "Consumers want their offline experience to be fun like a hobby but have online expectations about efficiencies and affordable pricing."

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