Beauty Pie is updating its membership model to simplify its offerings while continuing to challenge the usual ways of operating a beauty business.
UK-based brand DTC is moving away from its tiered membership model which had various caps on how much its customers could purchase per month (with unused spending carried forward). It now only offers two options: a $ 10 per month subscription with a spending cap of $ 10, and an annual unlimited spend for $ 59 called Beauty Pie Plus. It was first deployed to the United States in early August and will expand to the United Kingdom in September.
Beauty Pie has built her business by offering paid subscriptions to customers who can then purchase high quality, low cost beauty products. Since launching in 2016, it has expanded its offering to include ancillary beauty items such as candles, supplements and textiles. Products are priced between $ 3.72 and $ 33.25.
Marcia Kilgore, founder of Beauty Pie, said the Beauty Pie Plus option is possible because Beauty Pie sales and operations are larger. It no longer has inventory constraints and continues to have no retail intermediaries. Its supply chain is now faster than it once was, and it also has a wealth of customer data to know what people are ordering frequently. Kilgore compared the new model to Costco, in which an annual subscription allows customers to shop as often and buy as much as they want. In the last fiscal year in the UK between April 2020 and April 2021, Beauty Pie increased its revenue by over 100%, doubled its membership base to an undisclosed number and increased its workforce to around 150 people, has declared Kilgore.
Beauty Pie’s new unlimited annual offer stems from a survey sent to 3,000 customers in the second quarter of 2021 which received 2,000 responses. Beauty Pie found that most customers didn’t like buying limits and wanted to buy more at once. Beauty Pie has also faced customer confusion in the past about their complicated membership levels, and as Kilgore mentioned, people can be wary of a business model like Beauty Pie because it is. ‘they are used to buying things in a certain way and for a certain price.
“It’s exciting to be able to simplify the offers, so people who come in feel like it’s easy to understand. Before, when we had to have spending limits, it was less easy, ”she said.
Indeed, Beauty Pie Plus is a case study in behavioral economics. For example, Beauty Pie sells products at lower retail prices than competitors, but does not offer free shipping. So customers often find it difficult to justify spending up to $ 10 in shipping costs even though their cart size was small, despite significant product savings from a cost comparison basis. with other brands., said Kilgore. Because Beauty Pie Plus is unlimited, people can now add more to their cart and justify their shipping costs.
Another psychological obstacle for Beauty Pie is the concept of inertia, where people continue as they always have. For members who do not want or cannot be bothered to change their membership level, they will be grandfathered (as the levels will not be available to new customers). But Beauty Pie is sending the changes both on BeautyPie.com and via email to her undisclosed number of subscribers. The central message is that the $ 59 unlimited annual Beauty Pie Plus membership is better monetary value than previous existing levels.
“People are suspicious when you take away the margins,” Kilgore said. “People will pay a ridiculously inflated price for something, as long as the delivery is free. We try to retrain people to think ‘OK, [Beauty Pie’s business model] logic.'”
Over time, Beauty Pie seemed to gain customers, as e-commerce brand DTC capitalized on the e-commerce boom that brands experienced in 2020 with store closings. According to Glossy’s previous report, Beauty Pie membership rates between March 2020 and November 2020 increased by 300%. According to e-commerce tech company Edge by Ascential, the health, beauty and personal care retail category will add $ 305 billion in global sales from 2021 to 2026, just over 50% of that. growth from e-commerce.
“The health, beauty and personal care categories are particularly interesting to follow, with entrenched consumer habits set to change overnight due to the pandemic,” said Deren Baker, CEO of Edge by Ascential. “To compete in a new world of retail, brands need to leverage market-specific buyer engagement strategies, as well as ensure they have strong execution and chain strategies. flexible sourcing for [accommodate] short delivery times and meet unexpected increases in customer demand.
Kilgore said Beauty Pie has invested heavily in strengthening their technology and data teams over the past 12 months to build a personalized ecommerce platform. In terms of products, the brand also launched into supplements in November 2020. For the remainder of 2021, Beauty Pie will focus on growing its subscriber base in the United States, adding additional textile products around of the holiday season such as cashmere, as well as product collaborations with people like the famous British dermatologist Dr Andrew Markey.
“It’s not just about finding the best way to expose ourselves to potential new members. We also have members waiting for us to throw in the next cool thing, ”Kilgore said. “You have to continue to excite everyone who is already a member, and for us that is just as important.”