The secrets of makeup in a box of surprises
Ipsy started a subscription revolution in the cosmetic industry. Its success is based on its closely-knit community – the Ipsters.
The six-minute video in which Michelle Phan is helpfully demonstrating how to apply makeup so your face will glow with freshness, creating a natural look while seeming like an actual piece of art, is easy to find on YouTube. In two years, it got almost four million views.
The paragraph above reveals the building blocks of a success formula that Ipsy has been using for the past seven years. First, several components need to be entered into the equation. They’re most easily summarised like this: Michelle Phan (and co-founders) + YouTube + 10,000 vloggers + a new makeup bag each month + a cosmetic industry that's ready for marketing innovations + 3 million subscribers = the currently largest online project concerning the transformation of the cosmetic industry, following the principles of the subscription economy.
Ipsy users feel strongly connected with their community, which strives to inspire others.
Michelle started by building her online influence by buying cosmetic products and rating them in short, themed posts, while at the same time sharing the secrets of makeup with her viewers. YouTube was her springboard. It worked for her and for Ipsy, a company she founded with her colleagues in 2011 and into which she single-handedly transferred a great chunk of her online followers (mostly women), turning them into subscribers. But the subscribers are not just subscribers, they’re Ipsters, community members who are changing the face of the cosmetic industry for 10 dollars a month.
On Ipsy’s website they’re first taken through a quiz, where they pick their preferences. Then they pay a monthly fee of 10 dollars for a cosmetic surprise package, the Glam Bag, in which they receive gifts up to the value of about 50 dollars from month to month in the true spirit of life per month.
Each gift box is packed in a specially-designed cosmetic bag. It comes with a video instruction on how to use the products, as well as an invitation to check out the reviews on YouTube and have a look at one of the 10,000 vloggers who collaborate with Ipsy »for free«, in exchange for the packages.
They’ve just introduced the new and somewhat pricier Glam Bag Plus. Girls, paying 25 euros per month, receive mainly skin and hair care products worth 120 dollars, which at full sizes will serve those who want to pamper themselves with more than the sample-sized products that come in the regular bags.
By the way, the cosmetic companies, both globally renowned and completely unknown, give Ipsy their products for free, since they realised that this way of reaching new customers is as successful, if not more, than with television ads.
Because of how closely-knit their community is, Ipsy until recently, did not have to spend a penny on advertising. Instead, the company organises beauty seminars and gatherings where company representatives, vloggers, and other community members can meet. The Ipster community takes care of promoting Ipsy, through word of mouth.
Even though Michelle Phan left Ipsy in 2017, this did not seem to affect the operations and business of the company. They’re still way ahead of similar cosmetic box providers, such as Birchbox. They’ve also expanded to e-commerce, with the reward-based application, Shopper, which allows users to earn cash back on bought products.
Ipsy users are young, they’re fans of Justin Bieber, Miley Cyrus, they use Snapchat – but they also feel closely connected to their community, which strives to inspire others who want to express their extraordinary beauty. Makeup doesn't hide it, it only brings it out.