Beauty subscription service Ipsy is looking to grow its monthly Glam Bag business with a new personalized product, Glam Bag Plus, announced today.
Using its existing subscription model, based on a $10 monthly beauty bag of samples that is customized via a member quiz and product reviews supplied by Ipsy members — Ipsy receives on average 4 million product reviews a month — Glam Bag Plus is a play at a more elevated experience. The Plus product includes a luxury makeup bag, which is produced in-house, and full-size beauty products by the likes of Sunday Riley, Morphe and Purlisse.
The original Glam Bags, of which Ipsy produces more than 10,000 variations a month, feature about $40 worth of merchandise, whereas the new Plus product, which is $25 a month, has a retail value of more than $120, said Ipsy CEO and co-founder Marcelo Camberos. “You’re basically getting $100 worth of full-size products for free,” he said. Furthermore, for launch, Ipsy is offering an extra, one-time-only sixth product for customers signing up. The Plus bags begin rolling out in October.
Ipsy surveyed its over-7,500-member Open Studios community of creators to understand preferences around Glam Bag Plus. It followed the survey with three 90-minute focus groups that included current customers, non-customers and lapsed customers. According to Camberos, the feedback regarding a full-size membership offering was “very positive.”
Glam Bag Plus is also an opportunity for newer brands, like Sunday Riley and Morphe, which have not scaled up their sample-size production across their total assortment to have a stronger participation in the original Ipsy model. “Glam Bag Plus lets brands experiment with new products, where they have guaranteed demand, and helps them with their minimum order quantities from a production point of view,” said Camberos. Aside from satisfying makeup junkies, the Plus bag will delve more heavily into skin-care products.
Direct-to-consumer fragrance company Scentbird also recently scaled up its subscription service to include full-size products for its Makeup Pilot Program.
Though not the first beauty box to hit the market, Ipsy seems to have better anticipated customer interest and demands than some of its competitors — it currently has over 3.5 million subscribers, whereas Birchbox says it has more than 2.5 million active customers. After looking to sell to possible contenders like QVC and Walmart, Birchbox’s Katia Beauchamp, for one, turned to one of the brand’s existing investors, Viking Global Investors, for a majority stake.
From the get-go, Birchbox’s goal was to get customers to buy full-size products directly from the brand after sampling those sent in boxes. Ipsy, meanwhile, has a more diversified business model: Aside from sales of the Glam Bags themselves, Ipsy makes money from its Gen Beauty event series (that occurs three times a year, in New York, San Francisco and Los Angeles) and its new e-commerce Shopper site, which sells more than 200 brands directly to customers and has seen 400 percent growth since its September launch. (Birchbox, too, has an e-commerce, which it redesigned in July for easier use.)
It’s been a smart strategy for Ipsy to have different touch points, said Kayla Villena, Euromonitor International senior analyst. “Ipsy has been revamping its strategy this year, with an e-commerce site that allows users to buy full-size products directly from Ipsy and with events to strengthen customer engagement,” she said.
The subscription model isn’t something Ipsy is moving away from, said Camberos – though the appointment of Walmart.com executive Fernando Madeira as president in July seemed to suggest otherwise. “With Glam Bag Plus, we are giving our customer more of what she already wants,” he said. “It’s something she expects of us and wants from us, so we want to continue to grow that business.”
