Home Beauty Products How Walgreens' Prestige-Driven Birchbox Beauty Shops Hint At A 'Multibillion Dollar Opportunity' – Forbes

How Walgreens' Prestige-Driven Birchbox Beauty Shops Hint At A 'Multibillion Dollar Opportunity' – Forbes

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It’s a courtship that the drugstore chain and the direct-to-consumer beauty darling hope leads to a multibillion-dollar long-term commitment.

Walgreens’ move to piggyback on the prestige-beauty cred of Birchbox came to life last week at its Spring Street location in New York City, where an in-store shop from the subscription-box service bowed.

Walgreens has launched Birchbox prestige beauty shops in six of its stores.Walgreens

With these Birchbox beauty shops rolling out to six stores this year and five in 2019, Walgreens’ two-year long push to elevate its beauty department just got pushier.

That’s because this “amazing disruptor” will bring new prestige “brands and experiences” to the Walgreens’s shopper that she craves, but have gone largely unmet in the beauty aisles of drugstore chains, said Lauren Brindley, group vice president of beauty and personal care for Walgreens, during an interview from the Spring Street store at a press event.

Walgreens and Birchbox say with these shops, they’re targeting purposeful, rather than passionate, beauty shoppers.Walgreens

Birchbox’s sweet spot is a woman in her 30s with an average household income of around $100,000.  While Walgreens’ shopper skews older and is notably less affluent (with an average income akin to the average American consumer,) their commonalities eclipse their differences, said Katia Beauchamp, CEO of Birchbox,  at the event. Instead, their shoppers share a “psychographic” kinship, said Beauchamp, who co-founded the brand in 2010.

Walgreens and Birchbox each serve the everyday beauty consumer who shops the category with “purpose” rather than “passion,” she said. This is not the beauty enthusiast who watches Instagram videos on makeup contouring. But it’s this passive beauty consumer, who wants a convenient experience that takes the guesswork out of buying beauty products, that accounts for a whopping 70% of the market, Beauchamp said.

Yet she is woefully ignored. In shops that range from 500 to 1,000 square feet, the Birchbox shops at Walgreens are designed to rectify that by demystifying beauty products for time-starved consumers with “self-navigating” displays that are “not about the brand —[but] about her,” Beauchamp said.

The shops feature an edited product mix showcased according to the steps in a beauty routine, like cleanse or moisturize, as well as beauty goals and concerns, such as “balance” and “detoxify,” for example.

The assortment includes full-sized skincare, makeup and hair products from more than 40 prestige, indie and “cult” brands plucked from Birchbox’s beauty portfolio like COOLA, Sand & Sky, RMS and Davroe, which are new to the Walgreens shopper.

Other shop features include display tables devoted to product spotlights, testing and events, as well as Birchbox subscriptions.

Longtime beauty silos – mass products at drugstore chains and discounters like Walgreens and Target, versus, “prestige” brands at department and specialty stores like Macy’s and Sephora — are slowly decalcifying, Beauchamp said.

Nonetheless, Birchbox is no doubt an upscale play for Walgreens. The partnership grants the drugstore chain “premium and indie” brands it’s never had, Brindley said. 

It also marks the evolution of a beauty upgrade that started two years ago with the addition of thousands of beauty consultants in Walgreens stores.

Walgreens is not alone in its upscale push. Archrival CVS’s new BeautyIRL stores introduce a bold makeover of the category, nearly doubling the space devoted to the business in a redesign that also features indie brands, as well as on-demand salon services via a new partnership with Glamsquad.

Beauchamp said Birchbox shops at Walgreen carve a niche for the everyday beauty shopper by marrying the delight of discovery with a kind of practical utilitarianism.

Other shop features include display tables devoted to product spotlights, testing and events, as well as Birchbox subscriptions.

With this move, the eight-year old subscription-box service with just two of its own stores in New York and Paris, gains exposure to the “scale and expertise” of a 117-year old brand with 9,800 stores, she said.

The six shops that launched this month include three in New York City, and one each in Chicago, Los Angeles, and Minneapolis. Early next year, five more will roll out in Chicago, Dallas, Los Angeles and Miami.

The partnership reflects a six-month commitment, with both retailers eyeing, ultimately, a permanent collaboration and expansion.

When asked about the long-term potential of Birchbox for Walgreens, Beauchamp said, “It’s a multibillion opportunity to serve this customer.”

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