The beauty subscription industry is growing at a rapid pace. In 2017, subscription box pioneer Birchbox saw a 63% increase in subscribers and shipped 1.5 million boxes to 150,000 customers in that year alone. In the US, 11% of all cosmetics buyers are already subscribing to at least one beauty box. 40% say they are considering getting a subscription soon.
One possible reason for the rise of this segment is the non-intimidating nature of these boxes. As Birchbox UK’s Managing Director Savannah Sachs explained, Birchbox is not aiming to target the 20% of the make-up buying population classified as “beauty junkies”. Instead, they're going after the larger majority of “casual beauty consumers”. These consumers may not have a go-to brand or be the first in queue at a new collection launch. But they are curious about what’s out there. They just may not want the hassle of listening to a salesperson’s spiel or buying a full-size product to find out it doesn’t work for them.
"As of 2017, estimates indicate that there are around 2,000 subscription box services and 267 of such dominating the market."
Beauty boxes solve this problem. By offering smaller-sized products and delivering them right into the hands of consumers, the whole experience is not only less threatening, but even delightful. After all, who doesn’t enjoy receiving a box of goodies in the mail?!
As of 2017, estimates indicate that there are around 2,000 subscription box services and 267 of such dominating the market, the majority of them being for beauty boxes and primarily serving the US and UK markets. While the mushrooming of such services is good news for casual consumers, it also means that subscription brands need to up their game.
Beauty subscription box brands don't just compete with other subscription boxes. They also need to compete with the likes of giants such as Sephora, Amazon, and now, even Target, all of whom now offer their versions of beauty boxes. Additionally, in this rapid phase of growth where subscribers bases are growing daily, it's hard for young startups to cope with the increased level of service demanded. This is evidenced by a failure rate of around 13% for beauty box brands, according to the website My Subscription.
In our analysis of one of the leading beauty box brands, Ipsy, we found that subscription brands face four key challenges on social media:
1. Responding in time to inquiries from prospects. Subscription boxes are a new and unconventional type of beauty offering. Thus, customers tend have many questions, ranging from queries about the products to queries about delivery. According to a study by Lithium Technologies, customers who pose questions to brands on social media expect a response within an hour. Brands who are unable to respond on time could be missing out valuable opportunities to close a sale. On the flip side, brands that do manage to respond on time have the potential to increase customer loyalty - something that is always a priority in this competitive industry.
"Brands may be spending thousands on making sure their ad gets seen, only to get it hijacked by comments redirecting people to a competitor brand."
2. Ensuring ad money is not spent promoting a competitor instead. We found that a high percentage of comments such brands get on their ads are negative reviews from unhappy customers. These customers then publicly comment with a referral link to a different beauty box subscription instead. Brands may be spending thousands on making sure their ad gets seen, only to get it hijacked by comments redirecting people to a competitor brand.
3. Deleting spam comments. The nature of beauty products is that people rely highly on reviews to make informed decisions about them. In the past, beauty secrets were passed from mother to child, friend to friend, and beauticians to clients in their chairs. Today, user reviews on social media are the definitive guide consumers refer to when making a decision. If spam comments or claims of animal testing are cluttering your comment threads, they dilute the effect of legitimate product feedback and reviews.
4. Handling negative reviews in a constructive way. While 60% of users say that negative reviews make them question the quality of a business, there is also a positive side to customer criticism. In addition to providing a brand with valuable product feedback, evidence shows buyers also use negative reviews to evaluate whether the feedback on a product is balanced. The absence of any negative reviews raises suspicion and causes them to disregard all the feedback. The challenge for brands is determining how to respond to such posts in a way that is constructive and doing it fast enough.
How can subscription box brands address these challenges and ensure their social media engagement drives increased business?
1. Respond on time. Even if you don’t have the answers at your fingertips, customers want to hear from you. A simple reply or acknowledgement is enough to let them know you are looking into their questions. 24/7 comment moderation software and alerts can help field those first-level customer queries and escalate the more complex ones to a human.
"If a high profile influencer with over a hundred thousand followers reacts to one of your posts, you want to be able to know that immediately."
2. Track your ads for spam and other important comments. Unlike organic posts on your page that you receive notifications for each time someone posts a comment, on unpublished Facebook ads this does not happen. Despite Facebook's spam filters, some comments still slip through the cracks. Unless you are monitoring your ads all the time, you may not even realize this is happening. This is a tedious task that can be done either manually or with the help of a third-party service. Additionally, if a high profile influencer with over a hundred thousand followers reacts to one of your posts, you want to be able to know that immediately, so you can capitalize on the opportunity to send a free sample or engage in some other way.
3. Use negative reviews as an opportunity to improve. Product criticism can be valuable information for product development teams seeking to improve. By responding in a way that shows you are interested in hearing what customers think, you can turn negative reviews into something beneficial for the brand.
Want to learn more? Check out the analysis we conducted on Ipsy's Instagram ads: