The Interview: Alex Valbona, President of EU, Birchbox
Birchbox was founded in 2010 by Katia Beauchamp and Hayley Barna, driven by an interest in business models within the beauty market and a goal to redefine the way consumers discovered and shopped for beauty online.
Birchbox, which is recognised for its monthly subscription beauty box of personalised samples, is active in six countries with more than 1 million subscribers and 500 brand partnerships, including signature names from the industry like MAC and Lancôme.
The Coronavirus pandemic has seen the resurgence of the beauty subscription box market, as as a number of beauty brands have stopped offering conventional makeup testers in-store due to safety and hygiene guidelines.
Subscription-based beauty boxes have also become increasingly popular as a number of consumers are now working remotely and spending more time at home due to the pandemic. President of EU at Birchbox, Alex Valbona tells the TheIndustry.fashion's The Beauty Edit more:
Could you tell us a little bit about your background?
I have a PDD from the IESE business school, in addition to a postgraduate degree in business development and digital marketing from ESIC and law studies. I joined Birchbox at the end of 2013 as CEO of Birchbox Spain, attracted by the possibility of changing the way people discover and buy beauty products in Spain, as this was already being done in the United States, United Kingdom and France. At the beginning of 2020, I was given the responsibility of President of Birchbox Europe.
Since its inception, Birchbox implemented important changes at both a national and European level to adapt the value proposition to needs of women in each country, which has allowed it to have exponential growth in a short time.
My background means I have extensive experience as a director in digital business consulting and in distribution companies, in addition to being an entrepreneur and achieving several rounds of financing international venture capital funds.
When did Birchbox launch, what was the response like and what has changed since?
Katia Beauchamp and Hayley Barna launched Birchbox in 2010 as a brand that promised to deliver a box of beauty and cosmetic samples to your door for just $10 a month. They set out to change the way in which the casual beauty consumer shopped beauty.
From Birchbox we have identified a large segment of the population that, until now, were not being well served; the "casual beauty consumer." These are consumers interested in beauty but not experts, wanting to discover, learn, and put into practice beauty routines that adapt to their needs, in a simple and fun way.
Birchbox is the platform that facilitated the incorporation of new products into their routine, teaching them how to use them correctly so that, finally, they are the ones who decide for themselves which products to consume.
The idea captured the beauty industry’s attention, earning Birchbox $1.4 million in seed funding in its first month of business, sparking rapid global expansion into the UK, France, Spain and Belgium. By 2014, the company was valued at $485 million.
Since launching, a number of new subscription-based beauty box brands have joined the market. What sets Birchbox apart from other beauty box brands?
While there are other beauty box companies, Birchbox was the pioneer within the beauty category and has similarities to its namesake—birch trees. Founder Katia always said that: “Birch trees are classic and modern, and grow better together as a family’’ and that growth is exactly what the brand is aiming for. No longer just a subscription box service, we are an online retailer allowing the casual beauty consumer to discover new beauty with a qualified engaged community.
Our main difference is the personalisation, the consumer-brand connection and, very importantly, our role as an advisor and beauty editor. Our consumers, who we define as the “casual beauty consumer”, appreciate the concept of “try, learn and buy” a fun way to discover beauty products adapted to their tastes and needs. In addition, we work closely with brands to ensure that their product reaches the most appropriate target.
Millennial’s spending drives the growth of the subscription economy. Research indicates that young people prefer to rent products and services more than older generations. According to Accenture, 77% of both the millennial and Gen Z generations say they are interested in curated subscriptions to products or services.
Is the Coronavirus pandemic one of the biggest challenges facing beauty today?
It absolutely has been a real challenge on beauty brands especially those whose business model relies on the footfall in retail. From late February to the beginning of March, the pandemic did affect Birchbox directly but, after the first weeks of uncertainty, the organic traffic has grown fast and we have news subscribers easily. During the lockdown we experimented several sold outs and our main challenge was to fulfill the demand we’ve been creating
How has the Coronavirus pandemic taken the beauty box market to the next level?
The health emergency marks a turning point for each and every one of us, without exception. We were and still are all faced with a period of uncertainty, crisis and change. Lockdown took us by surprise and left us with two main beneficiaries: the home and e-commerce.
In March, everyone realised that we were going to be spending a lot of time at home, and it was an ideal time to stay to start taking care of ourselves. In fact it's rocketed the ‘cocooning’ trend that we’ve seen probably 2010 or 2012. Cocooning loosely defines the idea that consumers are increasingly inclined to enjoy retail and entertainment experiences from the comfort of their home.
As a direct to consumer brand we had a real advantage. We already had many years of experience doing just that so were best placed to capitalise on it. We have registered record figures, with a jump of more than 50% in new subscribers and an increase of over 150% in sales from our online store.
Obviously, our business model, being 100% online, has played a key role in this, but let’s not forget that, to really reach our consumers, we need a combination of technology and the trend I’ve noted above, that of staying at home more and actually having enough time to care for ourselves.
The pandemic has caused a great shift to consumers shopping online, what challenges does this pose for the beauty industry?
The boom in online shopping and the difficulties in trying out cosmetics on site, due to safety and hygiene measures, as well as the apprehensions from consumers about visiting physical retail stores mean that e-commerce can only go from strength to strength, both as a first option for discovering makeup, face, body and hair care products and—as with our subscription model—for trying them out in the safety of one’s own home, for later purchase.
In my view, there’s no turning back from digitalisation, and we need to take advantage of what has been so hastily put in motion. E-commerce has seen growth across the board, as evidenced by figures showing a leap from increases in market penetration of around 1% per annum in recent years, to digital progress over the last eight weeks equivalent to that of the preceding ten years.
What is the current play of the beauty market and what have been the most important beauty trends of 2020?
We’ve seen the acceleration of many trends that were slowly gaining traction. For example hyper-personalisation. The influx of information online and on social media has really educated consumers on their beauty needs so they’re fully aware of their individual requirements. Birchbox has always listened to this consumer.
As a subscriber, you have the ability to enter personal details about your skin, hair and general beauty concerns so that you have the ability to discover beauty products specifically suited to you.
We’ve also seen that the emphasis on health during the Coronavirus has a real impact on the types of products consumers are looking for. By increasing the time in our homes, we have more time for ourselves and our consumers have chosen to invest that time in taking better care of themselves.
During the COVID-19 pandemic, consumers have paid more attention to skin and hair care. From Birchbox, we have seen an increase in sales in the categories of facial and body products (masks, serums, moisturisers, etc.); that is, all those products that make us aware of ourselves and that are essential for our well-being, as well as the subjective pleasure of a softer, more relaxed and protected skin.
What’s next for Birchbox?
We think that data is strategic to us and we are going to bring some changes here which includes our website evolving and the subscription model becoming more flexible to provide a higher personalisation to our customers.
We are committed to offering customers the products that they want and as the trend for sustainable products and clean beauty continue – ensure we’re bringing these brands into the beauty industry in a meaningful way.
What advice would you give anyone starting a beauty brand?
My advice to them is to learn to compromise and be consistent with your value proposition. They need to know their target audience inside out, understanding the needs and values of this group. Also, knowing your own brand values is imperative. As the world of digital increases, it’s really important to build a community and, this can be done online. Finally, aim to expand globally rather than to a specific region. Aim high!