It has become increasingly easier to never have to go into a retail shop anymore, dig through the disorganized racks, and then wait in line for a changing room. Rather, online shopping has made all our lives easier, especially with more companies offering free shipping and free returns. It’s pretty crazy to think we could all create our entire closet but never step into a single store. About 78% of the U.S. population age 15 or older has online shopped, according to Business Insider.
There are companies that are purely e-commerce such as Modcloth, Threadless, or my personal favorite Everlane. Other e-commerce companies have stepped it up to another level, creating a subscription-based “box.” Birchbox was one of the pioneering companies in this realm. Started in 2010 by two Harvard MBA students, subscribers pay $10 a month to receive a box that contain about 5 beauty or makeup samples. The profit isn’t coming from these subscribers necessarily, though it is impressive since Birchbox has about 400,000 subscribers. The profits are coming from those who decided to buy the full-size products from their e-commerce store after trying out the free sample. According to the company, about 50% of the subscribers end up purchasing something on their online store.
The subscription model has expanded to everything from wine to japanese candy to even toys for your dog. So there really is some subscription based box out there for everyone. Part of the success is similar to online shopping – it’s easy; a box will automatically get delivered to your home every month until you unsubscribe. There’s also the excitement of getting something new every month that is “perfect for you” since most of these companies claim to personally curate your box. It feels like having your own personal stylist or shopper.
Interestingly though, three of these originally internet-based stores have opted to open a brick and mortar store. However, all of them claim that their store is driven by a strong customer experience. It isn’t just another makeup or retail store. Birchbox is one of these companies and recently opened a store in New York City. They not only allow customers to make their own box of samples, but provide beauty services and classes on makeup and hair styling.
Though a brick and mortar store has a higher overhead cost, Rent the Runway has noticed that people spend more in the physical store, mitigating overhead costs. The reasons why customers spend more is because sales reps can suggest accessories. Rent the Runway has also realized that offline customers tend to then be better online customers – the two channels affect one another.
Though it’s been said that e-commerce stores will be the death of traditional retail stores that isn’t necessarily the case anymore. And it isn’t necessarily the case that a company will start in brick and mortar and then move to e-commerce. Rather, both of these channels are of equal importance in satisfying customers. So though I do love sitting on my computer and scrolling through pages of clothes, there is something special about talking to excited, engaged sales reps which ultimately create an awesome customer experience.