Magnificence Pie raised $100m in funding final September to assist additional its growth plans, which it says will contain “extra warehouses, pop-up outlets and a brand new membership mannequin (for devotees).” This spherical of funding follows on from the massive development Magnificence Pie generated through the pandemic, with the model doubling its variety of members and turning a revenue within the fiscal 12 months 2021.
So, what’s behind Magnificence Pie’s success, and what does it imply within the context of right now’s magnificence trade? Moreover, in an more and more fractured shopper local weather – the place loyalty is a problem – how is Magnificence Pie aiming to fight subscriber headwinds, and drive acquisition?
Disrupting the wonder trade by means of ‘sourcing as a service’
Magnificence subscription packing containers have been round for a while now, with the likes of Birchbox, Glossybox, and FeelUnique popularising the mannequin. These examples provide prospects a subscription for a month-to-month field of curated magnificence and skincare, which generally embrace a choice of merchandise from a variety of manufacturers and which might be tailor-made to go well with the person.
Whereas it nonetheless affords a subscription service, Magnificence Pie differs from this conventional mannequin – a direct-to-consumer membership is probably extra of an correct description. The model calls itself a ‘patrons membership’, as prospects pay a month-to-month or annual subscription price to be able to get entry to Magnificence Pie’s personal high-end magnificence merchandise, which may then be purchased with out luxurious mark-ups (that always accounts for spend on advertising, middlemen, or costly packaging). Clients should purchase from the web site with out membership however shall be charged common retail costs. For instance, members should purchase the Magnificence Pie triple hyaluronic serum for simply £19, whereas non-members are capable of buy it for its retail worth of £44.
Magnificence Pie successfully entices prospects to enroll in membership by means of its 60-day free trial, which supplies prospects a big period of time to check out merchandise at a cheaper price level earlier than they determine to commit.
Sourcing direct from suppliers is the important thing to Magnificence Pie’s enterprise mannequin. Founder Marcia Kilgore describes the corporate as a ‘sourcing as a service’ enterprise. Primarily, because of this the corporate buys direct from labs. It’s fully clear about what merchandise value to make, which is then mirrored in its reductions for members.
Clients that ultimately develop into model loyalists
The massive profit for purchasers, together with this entry to lower-price luxurious merchandise, is that they’re given higher management over their expertise, with the power to purchase as and when they need fairly than being locked right into a month-to-month field of merchandise (that they won’t like or find yourself utilizing). This stays an enormous problem for different magnificence subscription field manufacturers.
Magnificence Pie’s subscription mannequin intrinsically drives model loyalty. Naturally, there may be the sense that that you must be getting sufficient out of it to justify a subscription price only for entry, but it surely additionally signifies that prospects are primarily locked into the Magnificence Pie ecosystem, with the mannequin encouraging them to find extra merchandise over time, a lot in order that they could ultimately solely purchase from Magnificence Pie.
Whereas prospects may uncover a model or product they love on different magnificence retailers like Boots or FeelUnique – that doesn’t imply they may all the time purchase it from that very same retailer. With Magnificence Pie, prospects are invested.
Magnificence Pie’s removing of its former spending limits is proof that members are coming again for extra. Beforehand, the model supplied a multi-tiered membership mannequin, which applied a month-to-month spending cap. In accordance with Shiny, nevertheless, a Magnificence Pie survey despatched to three,000 prospects in 2021 found that prospects didn’t like limits on buying and needed to purchase extra merchandise directly. In consequence, Magnificence Pie simplified its membership to only one possibility – £59 per 12 months with a spending restrict of £3,600.
Curated kits and natural growth outdoors of core classes
With a recent spherical of funding, Magnificence Pie is planning to additional increase on its core classes of make-up and skincare. It has already finished this to a sure extent, launching diffusers and candles, in addition to dietary supplements and a current line of pyjamas. Once more, this properly feeds into buyer loyalty, with Magnificence Pie loyalists eager to get their palms on any new launches, no matter class.
That is additionally what differentiates Magnificence Pie from different manufacturers which might be aiming to disrupt the pricing construction of the wonder and cosmetics trade. Skincare model The Odd, for instance, sells high-quality skincare at reasonably priced costs, debunking the parable that luxurious merchandise should be costly. It does this by utilizing easy however excessive focus formulation (with lively substances) that are available easy packaging – once more, no frills or pointless advertising. Nevertheless, The Odd is intentionally minimal and virtually medical, concentrating on customers which might be additionally searching for its easy and no-frills method. In distinction, Magnificence Pie appeals to the ’magnificence junkie’ – a demographic that buys into its model as a life-style or secret membership of kinds.
Magnificence Pie can be strategic in the way it aligns with this viewers, utilizing intelligent methods resembling its ‘Tremendous Magnificence Kits’ to assist discovery and buy on-line. The kits encourage members to purchase a number of merchandise directly – every one is constructed round a particular product line or skincare want, such because the ’teenager equipment’ or the ‘dry and delicate’ skincare routine.
Social media additionally feeds into Magnificence Pie’s neighborhood, with the model encouraging customers to #postyourpie, and re-purposing this person generated content material for their very own social channels.
Founder Marcia Kilgore has beforehand insisted that Magnificence Pie gained’t go so far as the likes of Glossier when it comes to model extension, which has famously constructed on its standing as a cult model, occurring to promote a variety of merchandise starting from hoodies to water bottles. “We’re not going department out into denims, or yoga mats,” she mentioned. “Given the dimensions of the market, and the way a lot the typical lady spends, we predict there’s lots of room for natural growth on the PIE.”
Its current line of pyjamas present that Magnificence Pie is eager to push this ‘natural growth’ so far as attainable, nevertheless, utilizing the broad class of ‘wellness’ as a possibility to take action. Excessive demand from members – with preliminary launches shortly promoting out – is clearly exhausting to disregard.
Members are shopping for right into a ‘social contract’
What Magnificence Pie is providing prospects is one thing that we haven’t but seen from different manufacturers within the magnificence trade, which is a laser give attention to buyer expertise, and in consequence, a brand-consumer relationship that inherently drives loyalty.
Whereas there are different CX pioneers inside the magnificence trade, resembling Sephora, which makes use of expertise (and personalisation) to reinforce each the net and in-store expertise – once more, the huge quantity of manufacturers that it sells signifies that loyalty to the ‘Sephora’ model can naturally waver alongside magnificence traits.
In a December 2020 article, Index Ventures’ Danny Rimer described Magnificence Pie’s relationship with its prospects as a ‘new social contract’ – one thing that’s constructed on a basis of authenticity and belief, fairly than transactions. “They’re like a detailed and trusted buddy – one who’s open with you, understands your quirks, is aware of whenever you need firm but in addition understands when to present you house,” he defined.
Magnificence Pie’s social content material is an efficient reflection of this – it’s chatty, intimate, and affords the prospect to have a two-way dialog with the model, with customers usually leaving suggestions and product requests. This intimacy is enhanced with ‘behind the scenes’ parts too, with founder Marcia Kilgore usually that includes in content material to supply each magnificence recommendation in addition to ‘insider’ details about the corporate and its enterprise mannequin.
Can Magnificence Pie maintain its success amid subscription headwinds?
Magnificence Pie’s relationship with its on-line neighborhood is one motive behind its spectacular retention charges. Danny Rimer said that “after solely 48 months in operation, Magnificence Pie’s annual and month-to-month subscriber figures are unbelievable – at Index, we’ve by no means seen buyer retention like this earlier than.”
However whereas Magnificence Pie has achieved excessive retention, loyalty isn’t all the time set in stone. With inflationary pressures, customers are more and more reducing again as a result of excessive prices of dwelling – and naturally, subscriptions are among the many first to go. Even Netflix has reported its first fall in subscribers in additional than a decade, as the corporate has but once more elevated the price of its month-to-month charges. It’s essential to notice, too, that Magnificence Pie was among the many many manufacturers that discovered new prospects on the again of fixing shopper behaviour through the pandemic. Magnificence Pie, specifically, appeared to capitalise on the surge in demand for premium magnificence merchandise, which Kantar says elevated by 6%.
In mild of this, Magnificence Pie has not too long ago develop into extra centered on driving acquisition, by increasing its advertising into extra mainstream areas as on-line acquisition prices little doubt rose. One instance is its first-ever TV advert, which falls consistent with its wider ethos of transparency, aiming to focus on customers which might be involved in accessible luxurious fairly than the unattainable quest for magnificence.
Magnificence Pie has additionally created a pop-up bricks-and-mortar retailer in London’s Covent Backyard, which is open for a restricted interval till July tenth. The shop will undoubtedly entice current members, giving them the chance to find new merchandise and obtain recommendation from magnificence consultants. On the identical time, the pop-up is designed to draw new consumers, giving non-members the prospect to expertise Magnificence Pie merchandise in-person and instantly sign-up.
Many manufacturers proper now, together with Netflix, are serious about pricing. Nevertheless, by asking customers to ‘cease overpaying and begin saving a fortune in your complete magnificence routine’ – Magnificence Pie’s worth is a big a part of its hard-won authenticity. The mannequin a minimum of provides the model the choice of altering the pricing of its merchandise while preserving the subscription worth static. With its disruptive technique and rising customer-base, Magnificence Pie is definitely a terrific instance of what challengers to established luxurious manufacturers can do with ecommerce, reflecting the altering nature of the trade, pushed by new shopper calls for.