While once simply a way to entice consumers, beauty product samples are now a beauty offering of their own, thanks to innovative start-ups, travel restrictions on beauty packaging sizes and consumer desire to continually try new products. The biggest driver to this change has been innovative start-ups in the form of subscription sites. Websites like US-based Birchbox, launched in 2010, and Glossybox, its key competitor in Europe, have turned product sampling into a profitable business. The rise of online shopping and the rise of beauty advent calendars at Christmas have also capitalised on samples, turning them from freebies to commercially-viable products.
Sampling products – a key purchase influencer for consumers
Despite efforts by marketers to convince consumers to buy without trying, product sampling remains an important part of the path to purchase equation. In Euromonitor International’s Annual Survey on Personal Appearances, free samples was the fourth biggest influencer for purchasing beauty products across all four biggest beauty categories. Past experience, friends and family’s recommendations and price preceded sampling.
Free Samples’ Influence on Purchase Decisions
Source: Euromonitor International
Note: Euromonitor’s Annual Survey on Personal Appearances
In fragrances, free samples ranked the highest with nearly 40%, the only exception being China where fragrances remain an upcoming category. The highest percentages from the 16 markets surveyed came from France with 57%, followed by US, Spain, Brazil and Germany. France ranked highly across all categories together with Germany, the US and the UK indicating the importance of sampling in those markets. It is then of no surprise that the two most successful subscription sites –Birchbox and Glossybox – originate from the US and Germany respectively and rank France and the UK as two of their biggest markets.
The rise and the fall of subscription sites
Birchbox is perhaps the biggest success story of subscription beauty sites, having raised US$60 million in investment last April and with an evaluation of US$485 million in 2014. It even moved to brick-and-mortar, opening a shop in New York and a pop-up in Paris in late 2014. Its business model was simple: Consumers sign up, pay a monthly fee of US$10 and get a box with selected samples from different beauty brands every month. As competition headed up with Glossybox in Europe (Birchbox bought French JolieBox in 2012) and numerous start-ups entered the market, from Julep in the US to Love Me Beauty in the UK, subscription sites have had to do more to retain and gain subscribers. As a result, most subscription sites now also operate e-commerce, where consumers can buy the full-size products, as well as blogs with reviews(consumers, in many cases, get points for reviewing products which can be used for purchases), articles and how-to-do videos. Some are also offering some sort of curation of the sample offering whether it’s from a selection of products or a menu.
However, despite the success of many beauty boxes in Western markets like the US, UK, France and Germany, the same cannot be said for beauty boxes in Asia Pacific. While initially beauty boxes were warmly-received by consumers, oversaturation of the market, limited quantities of samples and difficult logistic conditions have resulted in many closures, mergers and/or transformations to pure e-commerce. Furthermore, product categories like face masks are accustomed to being bought in single use sample packs in Asia. Thus, even though companies like Memebox in South Korea, Vanity Trove in Singapore and Glamabox in Hong Kong have managed to get a stronghold in their respective markets, they still had to diverse their offering, with Memebox’s 70% of revenue coming from its e-commerce site, not its subscription service.
Advent calendars, diagnostic tools and try-on apps shake up sampling
Beyond beauty boxes, samples have also become a profitable business by the introduction of beauty advent calendars. While the concept of advent calendar is nothing new, it has only been three to four years since they have transformed from a children’s Christmas present to a beauty product. Retailers and beauty companies alike are increasingly adding beauty advent calendars as part of their holiday offerings. L’Oréal’s Lancôme has been a sold-out affair in 2014, while Ciate London and Benefit cosmetics also offer beauty advent calendars.
While a seasonal product, advent calendars do exemplify a burgeoning trend of companies seeking to find a way to capitalise on the massive quantities of samples they have, as well as consumers’ desire for trying new products. By creating new product offerings in the form of advent calendars and beauty boxes, companies have managed to capitalise on what used to be a large write-off within the marketing budget – free product samples.
However, things are changing. As technology improves, increasingly more applications are created that assist consumers in trying products before purchase, without the need of free samples, minimising the cost of free samples to companies. Examples include L’Oréal’s much talked about Make-Up Genius App, introduced in 2014. Consumers can upload or take a picture of themselves within the application and try on as many products as they like. Furthermore, diagnostic tools like Sephora’s Pantone Colour IQ and Skin Care IQ search through brands to find the right foundation and skin care for consumers, eliminating the inconvenience of trial and error. As consumers begin to trust technology to choose the right product for them, the desire to try new products through the form of samples is likely to become subdued. However, until then and with the frenzy around subscription sites on a downward spiral, companies will have to find new ways to capitalise on their sample products.