Why are customers willing to pay for product samples from Sephora?

Discussion
Source: Sephora
Feb 13, 2018
Jasmine Glasheen

If you want to pay for a subscription box of deluxe samples from Sephora, you’re going to have to wait. That is because, according to Sephora’s website, subscriptions for their immensely popular subscription box service, “Play! By Sephora,” are currently on backorder. Would-be customers are instead directed to leave their email addresses on the website to be contacted when the company has more samples back in stock.

So, what are these subscriptions that are taking the beauty world by storm? For $10 a month, Sephora customers can subscribe to Play! to receive a curated box of five pre-selected “deluxe” samples along with access to how-to videos and invitations to subscriber-only in-store events. In addition, they get a “Play! Pass” which can be redeemed in-store for an additional 50 Beauty Insider loyalty points, which only become available when they make a full-size purchase.

Hitwise reports that from 2013 to 2016 the subscription box industry grew by nearly 3,000 percent. Beauty subscription boxes are blowing up in popularity and popping up seemingly everywhere. Birchbox and Ipsy charge $10 for five monthly “deluxe” samples, and Allure, Julep and Glossy Box offer nearly identical subscription services.

Department stores such as Macy’s aren’t immune to the “deluxe sample” beauty craze. Heck, even Target and Walmart recently threw their hats into the beauty subscription box ring.

One resounding question comes to light in the face of the overwhelming popularity of subscription boxes like Play! by Sephora: Why is the modern customer willing to pay $10+ a month for something they can get for free? After all, one only has to head to a beauty counter at any major department store to get a free in-person makeover, complementary beauty samples and a lengthy consultation from experts in cosmetics and skincare.

So then, what is it about subscription boxes that make customers so willing to sign over a regular monthly stipend of their hard-earned cash?

DISCUSSION QUESTIONS: Why do you think consumers are willing to pay for samples of beauty products from services such as Play! By Sephora when than could go to a store and get them for free? Is the popularity of subscription boxes another sign of the decline in the in-store experience? Where do you see sample box sales going from here?

Braintrust
"Having a curated set of deluxe-size samples delivered to your door each month has value."
"In my opinion, subscription boxes are great for brick-and-mortar retailers. In most cases, product samples won’t replace a need for purchase."
"It’s a chance to try something new and to just plain have fun and actually use a product all for basically the price a burrito and a Coke..."

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22 Comments on "Why are customers willing to pay for product samples from Sephora?"


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Art Suriano
BrainTrust

Many women are passionate about makeup and skincare and most likely see their monthly $10 subscription fee as a benefit to keep them in the loop with the latest products to try. I don’t see subscription boxes as another sign of the decline of the in-store experience but rather a smart marketing program to successfully introduce the customer to products and to get them in the store. And it’s another revenue stream for the company. Sure, you can go into most department stores and get free samples, but it is not the same experience. The subscription box adds the element of surprise not knowing what you’ll receive so it can be fun. What is key for Sephora and other companies offering the same service is to keep it fresh and for the customer make it something exciting they look forward to receiving.

Anne Howe
BrainTrust

Beauty category samples have a bit of universal appeal to most women, so it’s entirely logical to have an occasional back order situation once in a while. But, based on my recent experiences, Sephora has had many well know products on backorder for months on end. Sephora appears to have some work to do to meet customer expectations online.

Jeff Miller
BrainTrust

Anne, it might be a supply chain issue but my guess is they are trying to create something exclusive and special and therefore that is why they have a wait list. To my knowledge it has been the same since launch when they were just testing in a few markets and it ads to the marketing of the Play! program.

Brandon Rael
BrainTrust

The subscription model is taking off in retail, and Sephora is wise to capitalize on this momentum. Sample box sales are here to stay! Subscription models enable retailers and online digital players to maintain a relationship with their consumers, enable a consistent revenue stream to come in and introduce new product offerings.

In Sephora’s scenario, the ultimate goal is to be at the top of mind of their consumers, have a consistent brand engagement and ultimately provide the consumer a compelling reason to go to the store. Once you win their hearts and minds, then regardless of what channel they shop you will be the brand of choice.

Neil Saunders
BrainTrust

I think there are a couple of reasons people are willing to pay for this.

Firstly, it’s the convenience of having it delivered. People are time-pressed and will pay to make life easier.

Secondly, people like the element of surprise; they enjoy getting a “gift” through the mail, never knowing what will be inside.

Thirdly, for many of Sephora’s customers, beauty is a passion. Samples can be obtained for free, but they will happily pay for a curated selection of products that they can try and test out.

Charles Dimov
BrainTrust

Could it be convenience? Could it be that sense of adventure and mystery? Could it be the desire to see and test out the latest and greatest? Busy women don’t always have the time to drop into the store to check out the latest. So give her convenience, consistency and a touch of adventure. All of these are possibilities that Sephora has brilliantly tapped into with this smart move.

Is this a sign of the in-store decline? No, it is a sign of the evolution of retail. This is a brilliant engagement and loyalty tool. Some of the orders will shift online, and sometimes an intriguing new color brings the customer in-store to speak with an expert on how best to use the new base, cream or blush. It is the multiple touch point, and omni-channel future of retail that counts.

Ben Ball
BrainTrust

Sephora’s products lend themselves to “try it and see if it works for me” — in that sense they are much like wine. Wine “clubs” have been around for years. I don’t see why this shouldn’t work for discretionary consumable products of all sorts. But it will never work for staples. Who wants a sample box of detergent every month?

Phil Masiello
BrainTrust

Having a curated set of deluxe-size samples delivered to your door each month has value. $10 is inexpensive compared to getting in your car, driving to the mall and walking around the beauty counters asking for small single-use samples from overbearing salespeople.

In addition to these samples, you become part of the “club” where you get access to how-to videos and in-store events. The issue that most of the subscription boxes face, and Birchbox is no exception, is the low retention rate. Users tend to drop out after four months.

Where Sephora has the edge in this channel is their store experience coupled with the subscription box. This provides the user with a higher value proposition and will probably lead to longer retention rates in addition to increased sales. Customer retention is the true value proposition for Sephora.

Gene Detroyer
BrainTrust

I wonder, at the end of a year, how many boxes will be filled with a collection of un-used samples?

Ralph Jacobson
BrainTrust

This is an excellent example of brand value. This is not the only brand that charges for goods/services that competitors provide at no cost to the shopper. This is all around the great work the brand has done to make their products more compelling than similar ones at other retailers. I don’t think just any brand could do this successfully.

Lisa Goller
Guest

Sephora’s samples give consumers access to premium products they otherwise might not afford — at a reasonable price. The sensory appeal of cute single-serve sizes, innovative packaging and colorful assortments look irresistible. The variety lets shoppers see which items suit their cosmetic and personal care needs. The Amazon Prime addicts among us may relate to the blessed convenience of staying out of a mall. Goods arrive at your door (it’s like Christmas every day!), which saves us time and effort. Sephora nails so many consumer benefits with this subscription.

Doug Garnett
BrainTrust

Subscriptions to beauty samplers make complete sense. There are many women who want to be testing and trying new products all the time. But it’s hard work to create that sampling yourself and expensive to test through buying the full-size containers.

In this case, beauty is an area where there’s a significant number of women for whom testing and a sampler are inexpensive ways to pamper themselves — get a moment of surprise or discovery for not too much money.

That said, I’m always cautious in that subscriptions are a limited business. While this may be the best possible case for sampling, it will still only appeal to a minority of Sephora shoppers.

Ryan Mathews
BrainTrust

Put me in the camp that says these services work — at the right price point, of course — because of three factors:

  1. The “treasure hunt” effect — the joy of being surprised;
  2. Convenience — why should a consumer have to go to a store for samples and spend more than $10 a month in gas and the value of their time?;
  3. The notion — flawed as it may be — of receiving a “curated” offering.

I think the rise of subscription boxes is yet another indicator of the obvious — consumers increasingly realize they don’t need to go a store for many of the services that used to bring them to stores. And as a result, I expect the services will continue to grow — again provided the prices stay competitive and reasonable.

This doesn’t mean stores go away — necessarily — but it does mean that retailers need to start learning which of the offerings they are so proud of have limited value to shoppers, provided those shoppers can access them in a different way.

Cate Trotter
BrainTrust

I think for a lot of customers the traditional beauty hall can still be quite intimidating. It can be difficult to ask for samples, especially if you feel that sales assistants are being too pushy/just trying to make a sale. Or you may feel you can’t ask for more than one. Having the samples sent to your home to try over an extended period of time at your convenience is an easier option. You also get an element of surprise/gifting as you don’t know exactly what you’re going to get. The price point is also right, which means customers can indulge in their beauty/make-up passions, and get to try multiple new products, without spending much. It feeds into the desire to be in the know. This is becoming more and more important as beauty is a strong category for social media and new products with buzz regularly crop up. And the customer feels more informed if they do go in-store to buy a full-sized product.

Ricardo Belmar
BrainTrust

Subscriptions boxes like Sephora’s are a part of the retail transformation the industry is going through. They are here to stay as a new marketing tool for retailers that use them wisely. Why? It’s all about convenience and discovery! Two elements that are critical to a modern customer experience that shoppers seek out. I don’t see this as an indication of the decline of stores at all – in fact, Sephora is smartly using their box to drive traffic to their stores via unique services and experiences as the article explains. They continue to demonstrate to the industry how to best blend multiple channels and techniques into a seamless shopping experience that further enhances loyalty! The only downside here for Sephora is that they are a victim of their own popularity as evidenced by the back ordered subscription boxes. They will need to address this quickly or the approach may backfire on them.

Camille P. Schuster, PhD.
BrainTrust

Going into a store for a makeover takes time, is somewhat public and the person doing the makeover has control. Using samples at home is more fun because it can either be private (until you are ready to unveil the new look) or done with friends as a social activity, and allows the consumer to be in control which results in more experimentation. The experience is different. It is not necessarily something one will belong to forever, but is obviously something a lot of people want to try.

Meaghan Brophy
BrainTrust
There are a few factors at play here (pun intended — sorry!). Subscription boxes are like a present. It’s a fun way for people to treat themselves that doesn’t break the bank. Beauty products are also notoriously expensive. Subscription boxes are an affordable way to test out new products without splurging for a full size. Sephora has already proved that they are experts in personalization and product recommendations. It makes sense that they capitalize on that knowledge. I love subscription boxes because they are a win-win for shoppers and retailers. Shoppers get a fun surprise that’s customized just for them, and retailers profit from super high margins. In my opinion, subscription boxes are great for brick-and-mortar retailers. In most cases, product samples won’t replace a need for purchase. But they do build shopper loyalty and boost brand engagement between trips to the store. They also help engage shoppers (like teens and college students) who might otherwise not be able to afford much interaction with your brand. I recently wrote about the subscription box boom for… Read more »
Nicole Lipson
Guest

I agree with much of what everyone has written. What’s great about these types of sample boxes is they aren’t one-time use samples; they are, for lack of a better word, full-size samples, meaning you get more than one use. Most companies won’t hand out these larger samples. And most people don’t feel comfortable walking around a store asking for samples. No one has the time either. So the value provided by a curated, surprising, conveniently-delivered box with larger-size samples is worth the $10. Samples are expensive. Assuming product manufactures and Sephora have worked out some kind of positive financial arrangement, both the manufacturer and Sephora gain trialing and potentially more loyal and more lucrative customers.

Someone below mentioned unused product — not a problem … sharing is part of the pleasure!

Lee Peterson
BrainTrust

Play! is a no-brainer to me; you get to try several products and oh, by the way, those tiny little products are good for at least three or four uses. It’s a chance to try something new and to just plain have fun and actually use a product all for basically the price a burrito and a coke … 10 bucks! For what it’s worth, the only fragrance I use is samples I get from companies like A&F or John Varvatos who send me two or three samples every time I buy anything. Thanks, John! I haven’t bought fragrance for years and I’m always up to date.

James Tenser
BrainTrust

Sephora’s Play! boxes are a great way to create a periodic dialog between the retailer and its core customers. Let’s face it, opening a box of surprise cosmetics will stimulate way more dopamine than an e-letter or SMS offer.
Considering the retail prices of many cosmetics and face creams, $10 seems like a bargain price for those customers who love to try and wear makeup. Unlike pure online business models (like Birchbox), the samples are an inducement and reminder of the treasures and pleasures that await in the Sephora stores.

So for the monthly price of two grande lattes, a self-selected group of shoppers can indulge in a lifestyle experience they already enjoy. Sephora isn’t siphoning trips away from its stores with this sample program. In fact, I believe it may be creating more.

Jeff Miller
BrainTrust
This question is pretty easy to answer and your question contains a part of the answer in the way you framed it. Three reasons come top of mind: 1) No one wants to go to the store just to get free beauty products. Having them delivered to your door where you can use test them in your own time is well worth the $10. 2) Sephora (and Birchbox, IPSY and others) do a great job of curating what you get in the box. And since you actually paid for it, you have a little skin in the game are will be more willing to spend the time to test the product and perhaps come back and purchase if you like it. A free sample more likely will end up in the bottom of your purse or bathroom drawer, never to see the light of day. 3) Sephora has done an amazing job and better than any retailer who is testing subscription at creating a real community and providing members with a sense of belonging to… Read more »
Joel Goldstein
Guest

With the proliferation of Instagram and having the best selfie also comes the need to stay up to date on the latest fashion trend. Whether that be the in-style eyebrows or the latest nail color, women/men that care about being “current” with the trend are always looking to be first. As their marketing tries to hint that you can get ahead of the trend by being the first to try it, that’s how they develop the fear of missing out in that key demographic.

wpDiscuz
Braintrust
"Having a curated set of deluxe-size samples delivered to your door each month has value."
"In my opinion, subscription boxes are great for brick-and-mortar retailers. In most cases, product samples won’t replace a need for purchase."
"It’s a chance to try something new and to just plain have fun and actually use a product all for basically the price a burrito and a Coke..."

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