Birchbox CEO: Why Brick and Mortar Matters

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Aug. 29 (Bloomberg) – Birchbox CEO Katia Beauchamp discusses opening a New York store location in SoHo and their monthly subscription success. She speaks with Tom Keene, Scarlet Fu and Brendan Greeley on “Bloomberg Surveillance.” (Source: Bloomberg)

Until i read a stat.

95% of all beauty products sold are still purchased offline.

That's incredible.

Right.

It's actually the reason it motivated us to start birch box.

The majority of transactions are happening offline because people to want touch, try and feel.

In order to bridge the gap, birch box started to allow consumers to touch, try and feel the product before they buy it.

Our traditionals are you sign up, pay $10 a month, you can try beauty products that are personalized for you, and then you can purchase full-size versions in our shop.

Is this proof that a retail company cannot exist exclusively online?

I think you can, but there are so many reasons to go offline.

In our category, so many women are shopping there, and what we've learned in the past four years, our model is really changing the way people think about their interest in shopping.

We're actually taking women who are not engaged in the category and getting them to shop.

Why not offline as well?

This morning as we go into a three-day weekend, i'm all over the kiss kiss shapeless cream color.

Not for yourself.

Not for myself.

As we look at your racket, i'm not editorializing, is your competition bloomingdale's' acclaimed cosmetics floor?

It's just across 59th street.

Or is it sephora?

Who are you battling?

Neither.

We're battling nonconsumption.

We're getting women who were not interested.

They are not currently excited by the way retailers are merchandising beauty.

It's overwhelming.

When you walk into the bnch box store, you're going to feel a totally different experience.

Products are merchandised logically.

Are you looking for cheek, lip, for something specifically like second day hair products?

That's how it's merchandised.

I'm just -- my line of the day is beer battling nonconsumption.

I'm curious about this point about the store.

I'm reading here it has a verdict wall merchandising strategy.

You can compare different types by brand.

That seems like such an obvious thing to do, but it makes me wonder, that's not the way it's done in bloomingdale's, where product brands have so much power s. your model stripping away the power from the product brands?

It's just a blip.

Think about it as our entire store is like an end cap, and it's really reflective of how consumers want to shop and what brands are seeing.

Consumers aren't saying i specifically temperature brand, they're just saying, i want a great red lip or mascara, and it's actually giving brands the opportunity to acquire a new customer who never heard of them, because they're coming in and saying, hey, what is this brand?

It's beautiful.

I would have never found it on my own, and now they're seeing it as a customer acquisition tool.

How much does square foot did sephora or bloomingdale's going to make?

It's like drug money.

Is your physical store profitable?

Do you want it to be?

Of course that's the aim.

The reason we started the store is because after doing some tests of pop-up shops, we saw there was a clear path to profit ability.

The big difference it is not just full-size physical retail, you can actually build your own birch box, which is a huge driver.

Make your own box?

And you can book services.

For $30, you can get your hair done&makeup done.

She has a few shameless plugs in there.

Don't call it a cute box.

That's condescending.

You need the ultimate lift eye gel.

No, they have birch boxes for men.

Do you know anyone who uses birch box?

No, i don't. not yet.

The great thing about birch box for men, you might know somebody who uses it, but it's just getting shipped right to their door.

As we broaden this out, what is the lesson that retailers were struggling to fend off amazon and online competition can learn from you guys?

Bnch box, how do you reconceptualize the store?

One of the big things amazon is not is a brand that has a personality per se.

So i think one thing that's really powerful about having an offline store is when you have a personality, a brand, consumers can describe almost as a person, you can manifest that into the physical store.

People who come in who are subscribers, they feel like near disneyland.

This is giving them a great big hug, and it reinforces our relationship.

We also think it's a great tool.

But for us, we can basically say what we've learned online, translate it offline, and hopeful what will we're learning offline translates.

That 95% is staggering.

It is.

I guess the takeway is amazon used to get a personality.

I was in sephora the other day.

The line was like christmas eve.

Why?

That's what i'm chewing on.

With females.

Buying gifts.

It's like out the door.

Katia, thank you so much, co-c.e.o. of birch box.

The physical store in soho as well.

Let's get a report.

Russian ruble reaches 37. that is the headline this morning.

We'll keep new touch with all the headlines you out of you're crane.

Coming up -- our twitter

This text has been automatically generated. It may not be 100% accurate.

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