Friday, February 19, 2016
Content, Commerce, and Cosmetics: A Look At IPSY's Subscription Business
Los Angeles—as the center of the entertainment industry—has begun to adopt a new role as the center of online video in recent years—and has also with the e-commerce industry and expertise here from the technology industry. One of the companies at that intersection of video and e-commerce is IPSY (www.ipsy.com), a subscription beauty products company which uses video as a core piece of its monthly beauty products business. The company operates the Ipsy Open Studios based in Los Angeles, which specifically caters to content creators in the beauty area. Corey Weiss, IPSY's Head of Business Development, is based in Santa Monica, and helps to run that effort. We caught up with him to learn more about IPSY and its subscription business. socaltech is a sponsor of next week's Recurring Revenue Conference on Tuesday at the Skirball Center, where Weiss will be speaking on a panel.
What is IPSY?
Corey Weiss: IPSY is the largest, most passionate, and engage beauty community in the world. It was cofounded by Michele Phan in November of 2011. Our mis sion is to inspire women around the world, to express their unique beauty. IPSY comes from the Latin, ipsa, which means self. It's all about self expression. Our core business is around a glam bag program, a monthly subscription which costs $10 a month, which delivers a themed,curatated makeup bag containing five full size or deluxe samples from top beauty brands. The brands range from masstige to prestige brands, maybe something from NYX Cosmetics to Urban Decay. The average retail value of a glam bag is $40.
Explain a little bit about Michelle's videos and how they created the business?
Corey Weiss: Michelle started her career eight years ago as a beauty creator. Michelle believes that women learn from other women. Historically, women would go to a department store's makeup counter, and they were given samples and people they didn't know would recommend products to them. Or, maybe they'd learn from a magazine. Michelle believes that women should learn from other women. Social media allows women to seek out other, like minded women, and learn from them. Naturally, with Michelle's career, she would be recommending things like lipstick, eyeliner, and mascara, and realized there was an opportunity to build a business around that. We have always been a creator centric company, putting the creator first, and letting those creators share their knowledge with the community. IPSY has its own community of over 7 million members, and we have over 1.7M subscribers to our monthly Glam Bag subscription service.
How did you get involved in IPSY?
Corey Weiss: I got involved with IPSY, because early on in Michelle's career I had connected with her manager, and helped her with early deals. I made introductions for her to both brands and agencies, and brokered one of her early deals, with Colgate. Before that, I was heading up global consumer marketing for entertainment, sports, and video at Yahoo. Just as I was leaving Yahoo, Michelle was in the process of starting up IPSY, and I even made the introduction to our CEO, Marcelo Camberos. I've been involved since the launch.
We understand you're backed by $100M in funding?
Corey Weiss: Yes, that's correct.
As someone who's been building this business now for awhile, what have you found is the biggest challenge in the subscription business?
Corey Weiss: It is critical that you surprise and delight your customers, month over month, by delivering value. Like I said, for $10 a month, they receive a makeup bag with five, full size products. The equivalent value is approximately $40. The other, is to surround that experience with both community and content, which we push out through various social media channels, including Facebook, Instagram, Youtube, and Snapchat. We continue to engage with them around the products we feature each month. So it's all about content and community. We want to foster that community, and allow women to engage and learn from other women.
One way we continue to really deliver a great experience to our subscribers on a monthly basis, is personalization. Subscribers take a beauty quiz, which helps us learn about their interests and needs, and the more they participate and engage with IPSY, the more we learn, and the better we can personalize their glam bag on a monthly basis. We can have up to 200 different configurations of the glam bag each month. The bag you receive would not be the same one I would receive, because presumably we would have different needs in healthcare, skin care, and color cosmetics.
Can you talk about the content side of our business, and how that ties all together to the glam bags?
Corey Weiss: The way we integrate the content, and the way we work with creators, is we have the IPSY stylists who create monthly videos with products found in the glam bag. When subscribers receive the glam bag, they can watch the videos and get educated on how to properly apply the product they received.
Finally, what's the biggest lesson you've learned so far in this business?
Corey Weiss: Two things, from the customer perspective, is to really ensure you are delivering value, and listening to your customer about what they want. From the creator's perspective, we truly understand the influence those creators have on their audiences. Their audience wants to learn from them, and engage with them on the latest and greatest beauty products.
Thanks!