Birchbox CEO Katia Beauchamp: People love samples so much, they’ll even pay for them

This week, beauty editor Priya Rao sits down with Katia Beauchamp, CEO and co-founder of Birchbox, the company that sends monthly packages with a few samples of beauty products — after that, it’s up to the user to determine whether they want to take their relationship with this or that swatch of makeup to the next level. Katia discusses establishing Birchbox’s appeal to the everyday beauty consumer, its recent partnership with Walgreens and its plans for international expansion. Edited highlights below.

Making life easier (and newer!) for customers:
“People were just staying with the same beauty routine since they were 13, or 20, and they had spent decades with the same stuff because they were like, ‘No, no, no. I am certainly not going to take the time to swatch 17 things.’ So for us, it felt really obvious to take all of the onus that you have as a consumer and say, ‘You know what? We’ll do it.’ We’ll do the work, and instead of you having to go and seek this, we will push it to you in a really bite-size way.”

It turns out people love samples enough to pay for them:
“Everybody in the beauty industry and every investor said that this would never happen because consumers were used to these alternative ways of trial, and most importantly consumers would never pay for samples because they had been trained that samples were free. That’s what everybody told us in the early days. But frankly, we just disagreed. We were like, ‘Well, we would pay, we’re not dumb.’ We represent some segment of the market. And sure, we wouldn’t pay a ton, but there is some tolerance of payment here that feels pretty ROI-positive.”

The three kinds of subscription models:
“There’s essentially three different ways of subscription existing as a revenue model. The first one is one we’re all really familiar with, which is replenishment — usually for something that’s easier to commoditize and really useful. The second one is one that’s actually existed forever, which is the subscription to the thing you get — the subscription gets you the wine of the month, or the groceries you’re going to use, or even the clothes that you’re going to use. Versus the way Birchbox works: The subscription is the appetizer. The subscription is supposed to be a way of exciting you and helping generate demand. It isn’t the transaction. The transaction is when you find the thing you love and you buy it.”