Table of Contents
Executive Summary ii
Table of Figures ix
Introduction 1
E-Commerce 3
-Current Statistics 3
-History of E-Commerce 7
-Mobile Commerce 13
-Tablets and Future of E-commerce 14
-Advantages &Disadvantages of E-Commerce 18
Subscription Business Model 20
-What is Subscription Business Model? 20
Birchbox: the Mother of all Boxes 24
-BirchBox Overview 24
-BirchBox Healthy growth 26
-BirchBox Business Model 27
-BirchBox Challenges 33
Other Good Box Examples 34
-Lacquerous 34
-Manpacks 35
-Nature Box 36
-Why some subscription boxes are successful? 39
Failed Boxes 42
-Ellie 42
-Dollar Shave Club 44
-Rocksbox 46
-Why Boxes Fail? 47
Current Waves that are driving the Market 48
1. Social Commerce 48
2. Private Sales 53
3. Mobile / Location 54
Future E-Commerce Trends 55
1. Data is the beating heart of e-commerce 55
2. Cutting Out the Middle Man 56
3. Always-on shopping experiences 56
4.Social Shopping: Video experience in E-commerce 57
Conclusion 60
Recommendations for BirchBox 62
Bibliography 63
Appendix 76
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10. • Overcome Geographical
Limitations
• Lower Costs
• Enable Deals, Bargains, Coupons,
and Group Buying
• Quick search of the product
• Provide Abundant Information
• Open all the Time
• Ecommerce Lacks Personal
Touch
• Waiting time
• Security
&
ADVANTAGES DISADVANTAGES
17. New Business
Model
Copycats
Apply to Different
Categories
Apply Innovative
marketing Strategy
Aggregator
Description Subscription
Companies originates BM
originated from offline
analog.
BirchBox
Other companies clone
good BM with different
branding, geography.
BeautyBox.
GlossyBox
Several companies begin
replicating the BM in
different product
categories.
NaturBox,
ManPacks
Companies will innovate
with pricing, content,
marketing, etc..
Not another Bill
Website that aggregates
specific type of info from
multiple sources.
N/A
Source: E-Commerce landscape 2012. by Josh Yang
E-Commerce Business Model Cycle
21. Problem
Ideal Target
Unique Value
Proposition
Solution
Channels
BIRCHBOX BUSINESS MODEL
• There is no easy way to acquire beauty samples.
• Consumers need some extra help in picking up a
new beauty product.
• Young woman between 25 to 39 with an
annual income of $35.000-$55.000
• Female who loves beauty and takes care of
looks.
• Beauty products every month at clients
convenience.
• Flat predictable monthly fee.
1.Subscription service
2. Original content
3. Online shop
Monthly roster of articles and videos, daily blog
posts, Facebook, Twitter, Foursquare, Pinterest,
and Youtube
22. Revenue
Stream
Cost Structure
Key Metrics
Early Adopter
Unfair
Advantage
BIRCHBOX BUSINESS MODEL
• Subscription revenue
• "Affiliate" fee.
• Cost to acquire the samples, marketing,
shipping cost, employees salary, warehouse
cost, technology infrastructure cost.
• Number of new subscribers
• Number of cancellations per month
• Number of people buying products
Birchbox has captured the novelty effect which
gave a lot of publicity in media coverage.
1. Unique and original business concept
2. Lead in “beauty product sample” market
3. BirchBox collects feedback from customers
and provides results to suppliers.
23. Value to the customer Value to the brand
• Discovery
• „Surprise effect”
• Personal curation
• Ability to collect feedback
• Additional distribution channel
&
36. • customers are
willing to spend over
$45 monthly on
subscriptions*
• interest in curated
shopping services
• personalized and
meaningful
relationship with the
brand
BIRCHBOX is the
FUTURE?
“NETFLIX of BEAUTY”
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Hinweis der Redaktion
Facts
Advantages and Disadvantages of E-Commerce
Types of Subscription Business Model
Good
Subscription business model has its fails as well. Clear examples are Ellie, Dollar Shave Club and RocksBox. These companies does not solve any real problem neither offer anything new. Most of failed start-ups have a bad customer service and poor quality product. Only combination of good price, quality product and great customer experience can results in a profitable business.