Magnificence Pie raised $100m in funding final September to assist additional its enlargement plans, which it says will contain “extra warehouses, pop-up retailers and a brand new membership mannequin (for devotees).” This spherical of funding follows on from the large progress Magnificence Pie generated throughout the pandemic, with the model doubling its variety of members and turning a revenue within the fiscal yr 2021.
So, what’s behind Magnificence Pie’s success, and what does it imply within the context of at the moment’s magnificence trade? Moreover, in an more and more fractured client local weather – the place loyalty is a problem – how is Magnificence Pie aiming to fight subscriber headwinds, and drive acquisition?
Disrupting the sweetness trade by means of ‘sourcing as a service’
Magnificence subscription bins have been round for a while now, with the likes of Birchbox, Glossybox, and FeelUnique popularising the mannequin. These examples supply prospects a subscription for a month-to-month field of curated magnificence and skincare, which generally embrace a choice of merchandise from a spread of manufacturers and which can be tailor-made to swimsuit 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 ‘consumers membership’, as prospects pay a month-to-month or annual subscription price with the intention to get entry to Magnificence Pie’s personal high-end magnificence merchandise, which might then be purchased with out luxurious mark-ups (that always accounts for spend on advertising and marketing, middlemen, or costly packaging). Prospects should buy from the web site with out membership however will likely be charged common retail costs. For instance, members should buy the Magnificence Pie triple hyaluronic serum for simply £19, whereas non-members are in a position to buy it for its retail value of £44.
Magnificence Pie successfully entices prospects to join membership by means of its 60-day free trial, which provides prospects a big period of time to check out merchandise at a cheaper price level earlier than they resolve 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. Basically, which means that the corporate buys direct from labs. It’s solely clear about what merchandise price to make, which is then mirrored in its reductions for members.
Prospects that ultimately grow to be model loyalists
The massive profit for patrons, together with this entry to lower-price luxurious merchandise, is that they’re given higher management over their expertise, with the flexibility to purchase as and when they need reasonably than being locked right into a month-to-month field of merchandise (that they may not like or find yourself utilizing). This stays a giant problem for different magnificence subscription field manufacturers.
Magnificence Pie’s subscription mannequin intrinsically drives model loyalty. Naturally, there’s the sense that you could be getting sufficient out of it to justify a subscription price only for entry, nevertheless it additionally implies that prospects are basically 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 at all times 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 response to Shiny, nevertheless, a Magnificence Pie survey despatched to three,000 prospects in 2021 found that prospects didn’t like limits on purchasing and wished to purchase extra merchandise without delay. Because of this, Magnificence Pie simplified its membership to only one possibility – £59 per yr with a spending restrict of £3,600.
Curated kits and natural enlargement outdoors of core classes
With a contemporary spherical of funding, Magnificence Pie is planning to additional broaden on its core classes of make-up and skincare. It has already achieved this to a sure extent, launching diffusers and candles, in addition to dietary supplements and a latest 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 can be aiming to disrupt the pricing construction of the sweetness and cosmetics trade. Skincare model The Atypical, for instance, sells high-quality skincare at reasonably priced costs, debunking the parable that luxurious merchandise have to be costly. It does this by utilizing easy however excessive focus formulation (with energetic substances) that are available easy packaging – once more, no frills or pointless advertising and marketing. Nevertheless, The Atypical is intentionally minimal and nearly medical, concentrating on customers which can be additionally on the lookout for its simple and no-frills strategy. In distinction, Magnificence Pie appeals to the ’magnificence junkie’ – a demographic that buys into its model as a way of life or secret membership of types.
Magnificence Pie can be strategic in the way it aligns with this viewers, utilizing intelligent methods equivalent to its ‘Tremendous Magnificence Kits’ to assist discovery and buy on-line. The kits encourage members to purchase a number of merchandise without delay – every one is constructed round a particular product line or skincare want, such because the ’teenager package’ or the ‘dry and delicate’ skincare routine.
Social media additionally feeds into Magnificence Pie’s group, 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 received’t go so far as the likes of Glossier by way of model extension, which has famously constructed on its standing as a cult model, occurring to promote a spread 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 quite a lot of room for natural enlargement on the PIE.”
Its latest line of pyjamas present that Magnificence Pie is eager to push this ‘natural enlargement’ so far as doable, 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 arduous 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 deal with buyer expertise, and because of this, a brand-consumer relationship that inherently drives loyalty.
Whereas there are different CX pioneers inside the magnificence trade, equivalent to 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 implies that loyalty to the ‘Sephora’ model can naturally waver alongside magnificence developments.
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, reasonably than transactions. “They’re like a detailed and trusted good friend – one who’s open with you, understands your quirks, is aware of while you need firm but in addition understands when to offer 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’ components 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 group is one purpose behind its spectacular retention charges. Danny Rimer acknowledged 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 will not be at all times set in stone. With inflationary pressures, customers are more and more slicing again because of the excessive prices of residing – 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 necessary to notice, too, that Magnificence Pie was among the many many manufacturers that discovered new prospects on the again of fixing client behaviour throughout the pandemic. Magnificence Pie, particularly, appeared to capitalise on the surge in demand for premium magnificence merchandise, which Kantar says elevated by 6%.
In gentle of this, Magnificence Pie has lately grow to be extra centered on driving acquisition, by increasing its advertising and marketing into extra mainstream areas as on-line acquisition prices little question rose. One instance is its first-ever TV advert, which falls consistent with its wider ethos of transparency, aiming to focus on customers which can be thinking about accessible luxurious reasonably 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 present members, giving them the chance to find new merchandise and obtain recommendation from magnificence specialists. On the identical time, the pop-up is designed to draw new buyers, giving non-members the prospect to expertise Magnificence Pie merchandise in-person and instantly sign-up.
Many manufacturers proper now, together with Netflix, are excited about pricing. Nevertheless, by asking customers to ‘cease overpaying and begin saving a fortune in your total 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 maintaining the subscription value static. With its disruptive technique and rising customer-base, Magnificence Pie is actually a terrific instance of what challengers to established luxurious manufacturers can do with ecommerce, reflecting the altering nature of the trade, pushed by new client calls for.