Watch out, Sephora! Beauty subscription box Ipsy is thinking bigger

By Elizabeth Segran

August 27, 2018

Ipsy, a wildly popular monthly beauty subscription box, just announced something big: It’s launching a $25 box that will come with five full-sized beauty products worth at least $120. It’s an interesting move for a company that, until now, has been known for helping women sample new beauty products. With this new product, called the Glam Bag Plus, Ipsy is slowly moving beyond discovery to helping stock women’s beauty counters, potentially replacing the experience of shopping in a beauty retailer like Sephora or Ulta.

Until now, Ipsy’s closest competitor was Birchbox. Beauty influencer Michelle Phan launched Ipsy in 2011, a year after Birchbox launched. (She has since left the company.) Much like with Birchbox, Ipsy subscribers could pay $9.99 a month and receive a cute bag full of premium beauty samples worth at least double what they paid.

But the two brands had very different business models. Birchbox relied on customers discovering products they loved in their monthly box, then going to its e-commerce site to buy full-sized products. This was a problem because customers could easily buy products on Amazon or Sephora instead. Ipsy, on the other hand, produced vast quantities of YouTube content and tutorials that went along with the products, which created ad revenue. And as Ipsy’s subscriber base swelled to millions, brands were eager to engage in partnership agreements with the brand to ensure customers would get access to the products.

Watch out, Sephora! Beauty subscription box Ipsy is thinking bigger | DeviceDaily.com

Glam Bag Plus [Photo: courtesy of Ipsy]

Birchbox has struggled in recent years. There were rumors that it was tens of millions of dollars in debt and was looking for a buyer for months without success. Eventually one of Birchbox’s existing investors, Viking Global, acquired a major stake in the brand by investing $15 million into the business. Meanwhile, Ipsy appears to be growing explosively. The company says it has more than 3 million members, and more than 1,ooo brands have partnered with it. Its digital content now drives more than 500 million views across all channels. And it now has its own e-commerce marketplace called Shopper.

Looks like Ipsy is giving Sephora a run for its money.

 
 

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