Boxycharm — as much a buzz machine as it as a subscription beauty box — has secured a majority investment meant to take the business into its next phase of growth.
Private equity firm KarpReilly has taken a stake in the firm, which operates a $21-per-month subscription beauty box and was founded by Joe Martin. Industry sources estimated the KarpReilly investment was valued at under $20 million.
The business’ point of differentiation lies with its influencer strategy. Boxycharm has a network of influencers who post on social media about the products in the boxes before, during and after the boxes go out, according to Martin. It’s a strategy that helps to generate buzz.
“Our objective [is] to be able to trend a product or a brand,” Martin said. The idea is that between Boxycharm’s influencer network and almost 200,000 subscribers, between 50 million and 100 million impressions can be generated, which for big companies can lead to more product consideration when members shop in retail settings, and for smaller brands, can help with awareness, according to Martin. Boxycharm should have about 300,000 subscribers by the end of the year, Martin predicted.
“We formulated a monthly process [to] help brands get the cool factor,” he said. “When one of our members walks into a store to buy makeup, how can we have product under consideration? If it’s a small brand, how can we help the brand trend?”
With fresh capital in the business, Martin plans to invest further in Boxycharm’s influencer network — particularly in terms of events. Now, brands frequently gather groups of influencers together for events in order to spur content generation, but Martin envisions that strategy being taken to the next level.
“What we are asking ourselves is: ‘How can we actually turn it into organic content?'” he said. “Can I have an influencer post something that looks organic instead of sponsored?”
Using influencers to hype products in Boxycharm’s box before it hits the mail is one the company’s key strategies — then when subscribers receive the box, they’re getting products that are trendy and continue creating content about them, according to Martin. “This is one of the tactics we’re using to really elevate the brands and turn them into popular brands among Millennials,” he said.
The goal is for the buzz to drive consumers to buy from the brands featured the box in the store (or online). More than 80 percent of Boxycharm’s subscribers shop in Sephora, Ulta Beauty and department stores, Martin said, not just drugstores.
Boxycharm will use part of the money from the deal to build out artificial intelligence tools with the goal of learning how to further optimize engagement on social media, Martin said, as well as make key hires. The company has about 50 employees now in the U.S., Canada and the Philippines, and is looking to add more people. “We’re looking for c-level, high-level management, all the way to clerical positions,” Martin said.
The brands that Boxycharm has featured include Smashbox, Clark’s Botanicals, Ofra Cosmetics, Blinc, Makeup Geek, Japonesque, Dr. Brandt, Doucce and others. Boxycharm covers the manufacturing process and includes full-size products from the makeup, skin-care and hair-care categories in its boxes.
The company also works with companies on product development, Martin noted. “We go to certain brands and say, ‘Look, this is what we need, we know this is going to trend,'” Martin said, adding that the strategy works better for highlighter-type products than things like hair color.