Birchbox
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Case Code: BSTR531 Case Length: 14 Pages Period: 2017 Pub Date: 2018 Teaching Note: Available |
Price: Rs.400 Organization: Birchbox Inc. Industry: Beauty and Personal care, E-commerce Countries: USA Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In April 2017, Birchbox Inc. (Birchbox), a New-York based beauty products subscription start-up was looking for growth options as it witnessed a 7% fall in its subscriptions. In the Industry it had pioneered to create, Birchbox was facing tough competition from its clones. After three rounds of funding amounting to $87 million , its investors were demanding profitability. And Birchbox was just on the verge of achieving that. In 2016, it had resorted to aggressive cost cutting measures and two rounds of lay-offs; trimming its workforce by 30% . Birchbox was going to break-even at an operating level but at the cost of losing on growth. But it was yet to be seen if Birchbox could achieve sustained growth as well as profits.
Birchbox was founded in 2010 by Hayley Barna (Barna) and Katia Beauchamp (Beauchamp) when they met at Harvard Business School . The idea was to enable consumers to discover great products at their convenience. The concept was popularized as discovery retailing. Birchbox sold boxes containing five beauty samples (Skin Care, Hair Care, Make-up, Body Care, and Fragrance) for a fee of $10 a month. The contents of the boxes were curated in accordance with the profile and preferences of the customers, which were captured when they registered on the website. In 2016, Birchbox had one million subscribers.
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