Walgreens Trials Birchbox Beauty Line
Walgreens will begin offering beauty products from subscription-based retailer Birchbox in select stores and on its website. As part of the deal, Walgreens will also acquire a minority interest in Birchbox.
The pilot, which will include 11 physical locations, brings a prestige beauty line to Walgreens stores, making its beauty offerings more competitive with those of department stores (traditional upscale beauty brands will not sell to food, drug or mass retailers). There also will be a curated Birchbox shop on Walgreens’ e-commerce platforms. The pilot is slated to run through early 2019.
“This collaboration will enable Walgreens to continue to strengthen our beauty offering and build our prestige portfolio,” said Richard Ashworth, the chain's president of operations. “The addition of Birchbox to our growing beauty offering is a big step in delivering on our promise to differentiate and elevate the beauty experience.”
Birchbox chief executive officer Katia Beauchamp said the relationship should reinforce her company’s mission to reach underserved consumers who don't prioritize beauty. “Birchbox has changed the relationship that this customer, who represents 70% of the market, has with beauty and increased her spend," she said. "Walgreens is deeply committed to beauty and shares our vision for a different type of retail experience – one that is holistic, seamless and designed to help shoppers make informed, confident decisions. Together, we will continue to evolve the integration of our physical and digital shopping experiences.”
In stores, Birchbox will have a dedicated, branded space, with an elevated design and curated assortment featuring skincare, hair and makeup products from 40-plus prestige brands. Birchbox-trained Walgreens beauty consultants will be available to assist shoppers.
Stores also will offer subscriptions to Birchbox's monthly delivery services of personalized samples and the “Build Your Own Birchbox” experience, a signature element of the online brand's physical flagship stores in New York and Paris.
In recent years, Walgreens has been intensifying its beauty presence. The retailer already carries differentiated beauty assortments in approximately 3,000 stores, a Beauty Enthusiast club within its Balance Rewards loyalty program, and more than 3,500 in-store beauty consultants.
Founded in 2010, Birchbox has embarked on several physical retail projects. In addition to stores in New York (opened 2014) and Paris (2017), it has created pop-up locations across the U.S. and Europe. At one point, Birchbox discussed opening additional permanent U.S. stores but encountered financial roadblocks.
In addition to selling merchandise, the Birchbox stores serve as testing ground for consumer behavior. The New York location, for example, uses cameras and heat sensors to track shopper movement to see which products attracted them. It also uses iPods, mobile apps and WiFi analytics to collect shopper data.