Ipsy, the beauty box subscription service and e-commerce site founded in 2011 by YouTube creator Michelle Phan, is expanding its business beyond sample-sized products. The company today is debuting a more expensive “Glam Bag Plus” subscription, which will ship customers five full-sized products for $25 per month.
The move aims to capitalize on Ipsy’s established customer base who now trust Ipsy’s beauty products recommendations to the point they’re willing to pay upfront for full-sized products, instead of only samples with the option to later shop online for the products they liked.
It may also help attract a new customer who doesn’t find value in samples – which are sometimes one-use products, or packaged poorly compared with their full-size counterparts, making them difficult to travel with or throw in a purse.
So far, Ipsy’s curation has been succeeding – it touts over 3 million subscribers, compared with rival Birchbox’s over 2.5 million.
Ipsy, for what it’s worth, tends to offer better samples than Birchbox, now majority owned by hedge fund Viking Global Investors, after some financial struggles.
Birchbox shipments are often too reliant on less valuable items, like single-use makeup wipes, tiny eyeshadows without a reliable protective case, or totally hit-or-miss perfume samples, for example. Ipsy, meanwhile, sends out full-sized makeup brushes and other full-sized items along with samples on a regular basis. It also prioritizes makeup products over hair and skin care items in its curation.
Plus, it ships products in a reusable makeup travel bag (which, frankly, is great for when you need to unload some of your less-loved samples on friends).
With the new Glam Bag Plus, customers will have the option of paying a little more – $25 per month instead of $10 – for a selection of full-sized products, which would normally retail for $120.
The company says it will work with brands like Sunday Riley, Ciaté London, Purlisse, Morphe, Tarte Cosmetics, Buxom, and others.
As before, the exact mix of products shipped will be based on subscribers’ beauty profile. Today, Ipsy creates over 10,000 different makeup combinations in its monthly Glam Bag memberships, it says, because of this personalization.
The Plus service will also ship out a deluxe (read: larger) makeup bag on the first delivery, then every third delivery afterwards, as part of its subscription.
The new service will better cater to skin and hair care companies, and especially to newer brands that may not offer a wide ranges of samples at this time, but still want to be able to reach Ipsy’s millennial subscriber base.
Initially, existing Glam Bag subscribers will be able to switch over to the Plus tier of service, which will ship its first bag in October.
However, the company is advising customers that it has limited quantities of Glam Bag Plus products, so if they choose to later downgrade back to the sample Glam Bag, they may end up on a waitlist if they decide later they want to re-join Plus.
Ipsy also says it’s not set up right now to handle customers who want both memberships, so those who do should create a second account as a workaround.
Ipsy’s co-founder Michelle Phan left the startup last fall to run online makeup site EM Cosmetics, but Ipsy itself remains profitable – and it has been for several years. The company’s real value is not the money to be made on the subscription business itself, but rather in helping beauty brands reach social media influencers and YouTube stars, whose makeup tutorials and recommendations help them to gain exposure.
While Ipsy, like many in the subscription business, won’t talk about its critical business metrics like churn or margins, the company believes the Plus subscription will do well because it’s something members have been requesting for some time. It also surveyed the user community and ran focus groups ahead of this product’s launch, it told Glossy.
The subscription will become available to more customers in the future, says Ipsy.
Source: Tech Crunch