GlossyBox: How to Potentially Evolve a Subscription Model

GlossyBox, a beauty product subscription service, has recently expanded their business model by introducing a magazine into their monthly box of curated beauty products. The service stems from targeting consumers of beauty products through adding an appealing subscription service to an important aspect of the beauty and cosmetics industry: product sampling (Discovery Marketing). As such, their business model initially focused on getting subscriptions from consumers of beauty products. With the introduction of a new magazine into each box, GlossyBox has expanded their business model to provide further value to brands looking to be connected with GlossyBox’s consumers in the form of content marketing.

Through an analysis of the GlossyBox business model, we see that it simultaneously delivers value to brands as an agent for sample distribution, and customers for its regular, tailored selection of pampering beauty products from all over the world. Yet, as we shall discuss, we can see a greater opportunity for GlossyBox to expand and capitalize even further on its content platform to further amplify the value that the service delivers to their consumers and their partner brands.

The beauty of surprise: a high end beauty box subscription

GlossyBox is a beauty sample subscription service based out of Berlin. Part of Rocket Internet, the company was founded in 2011, and since has grown to operate in several markets– amassing 200,000 subscribers. The concept is simple. Each month a customer pays 15€ for a box filled with a curated selection of five high quality beauty products. The thrill of the surprise box is almost as appealing as the knowledge that several high-end products are inside the elegant box.  
Where their business model focuses on selling subscriptions to consumers, it relies heavily on marketing and logistics: the former to secure the subscribers who generate their core revenues, the latter to deliver the box to them. As such, their costs would largely go into the supply chain, the packaging, the warehouse, the human labor that goes into boxing and tying the ribbon on, and of course, continuously promoting the service.

This aspect of the business model is affected by difficulties of maintaining a subscriber base, which come down to factors such as customer relevance and desire, plus supply chain efficiency. While GlossyBox now ships hundreds of thousands of boxes per month, only about 400 people have been subscribing continuously since 2011. In order to balance the retention of subscribers, they have been offering gift options and limited edition boxes. Yet, it stands to reason that by further developing a content platform, that GlossyBox could add value to its customers, promote growth and retention of its subscriber base, while simultaneously developing its B2B service.

 

From a subscription service to a content platform

Recently, GlossyBox introduced a magazine, which not only prolongs the time that the customer spends with the box (which from a brand loyalty standpoint, every second spent on the unboxing process is a strength), but more importantly, it provides an entry point to GlossyBox becoming a content marketing platform and a venue for brands to buy into not only the mediaspace, but the analytics collected by the subscription service.

This business model development is remarkable as it is accomplished by simply adding a space for content to their consumable product. The costs required to open up this source of revenue would be relatively negligible in comparison to the logistics costs that go into providing their subscription service. To produce this magazine, GlossyBox must simply hire a minimal production staff, and the magazine is introduced to a huge readership of pre-established subscribers without any additional costs other than the paper it is printed on, and the relatively low cost of production.

GlossyBox has a great opportunity at this juncture, to expand their content marketing initiative beyond the magazine as it is now, in a way that not only further adds value to brands, but also consumers.

The slim magazine currently functions more like a brochure than a beauty magazine from the supermarket aisles or the blogosphere. It contains product placement, advertorials, how-to tutorials, and beauty and fashion wish-lists, all of which seem like they can be bought-into by brands. They also include details about the specific products that are sent out in that month's GlossyBox, which gives added value to both consumers and manufacturers. And besides beauty brands, all other brands that are after this target group can also be connected via this content platform– potentially making GlossyBox another partner in their marketing plan. It is also used as an advertising medium to attract visitors to GlossyBox’s online presence.

While the magazine currently adds value to brands looking for mediaspace to target the specific consumer profile that GlossyBox caters to, in order to add value to its consumers, there is a huge potential for GlossyBox to further turn this mediaspace into a more developed publishing platform. Investing in a high-quality, beauty or fashion blog, and/or print endeavors with more engaging editorial content could not only drive organic traffic to the brand by attracting consumers of beauty products with articles, videos, tutorials, and tips, but also provide added value to the brands GlossyBox works with through a more extensive, attractive mediaspace. This expanded field could then be utilized both for advertising as well as co-created content with these partner brands.

In our increasingly mobile society, the future of this more extensive content platform would naturally evolve into a GlossyBox mobile app. Expanding into the mobile channel would add value by integrating the subscription service and content platform into the devices that consumers use most, while also providing brands with more extensive advertising space to its brand partners. A mobile app could also provide a means for further GlossyBox e-commerce, such as buying the products that consumers liked best in their month’s subscription. Apart from this integration, mobile would offer brands much more extensive consumer analytics. This increase in analytics could be a low-cost way of developing an additional value for brands, in which GlossyBox serves as a connector between brands and consumers by providing brands with more information to target this highly coveted consumer demographic. GlossyBox could provide a platform for branded content, medium space (product placement), as well as ads and advertorials.  

In summary, these opportunities could be best realized through a holistic content platform which includes not just a print magazine but also an extensive, high quality online presence and mobile app which would amplify both the value to the consumer through relevant beauty topics, as well as partner brands through offering a mediaspace and more extensive knowledge of their consumer group through the content platform’s analytic capabilities.

Update:

5th of August 2015: As predicted GlossyBox launched the digital version of their magazine: Glossybox Inside