After operating its first nine years at a flat $10 per month rate, Birchbox announced Tuesday that it's raising prices across the board and introducing a tiered pricing structure related to its loyalty program, according to details emailed to Retail Dive.
For a monthly subscription, the price will be $13 per month for existing subscribers and $15 per month for new ones (the same prices apply to a three-month subscription); a 12-month subscription is $12 and $13 respectively; and a six-month subscription is $12.50 and $14 respectively. This is where the company's loyalty program comes in — VIP's who spend $300 a year with Birchbox pay only $10 per month for any subscription type.
The changes take effect on March 24 for non-active subscribers, and current subscribers will see changes to their pricing in June. Changes to the experience begin in April and include improvements to personalization, new products to choose from, more customization options for subscribers and faster shipping, among other things.
Other changes coming to Birchbox include the payment structure of the box. Beginning in June, all subscriptions will be billed monthly rather than making customers pay for a full year or six months in one payment, according to a blog post by CEO and co-founder Katia Beauchamp. While Birchbox is pitching the price increase as a way to improve the customer experience, Beauchamp acknowledged that the increases were also the product of higher costs at the beauty retailer.
"[O]ur $10 price point was holding us back," Beauchamp wrote in a blog post about the tiered program. "We've been limited in what we could offer you because — frankly — our cost of doing business has increased."
She cited higher shipping rates at USPS as one contributor, but also highlighted several areas Birchbox plans to improve thanks to the higher price points. Two points in particular seem to be a focus of the new experience: the customer's level of control over the items in their box and improvements to the personalization process.
To solve for the first, Birchbox is bringing on new products, offering "multiple curated assortments each month" and introducing a feature in June called Swap for Points, which will allow customers to skip a box and convert the money into loyalty points that can be spent on full-size products from Birchbox's website.
For the second, the retailer is reworking the questions asked through its Beauty Profile to improve the algorithm that matches products to customers. It's not the only beauty retailer focusing on data to improve product and personalization — Glamsquad launched its own haircare line in December based on customer data and announced a new makeup line set to debut in April following the same process.
Other subscription-based retailers are also finding new ways to improve personalization, like Stitch Fix's Tinder-like game, Style Shuffle, which helps the retailer gather data about a customer's given style preferences. It also helps inform decisions about the products that go into their boxes.