Nearly half of beauty purchases are now conducted online. Amazon is the biggest beauty retailer in the world. TikTok is the seventh-biggest online beauty retailer, according to market research firm NielsenIQ, and over 40% of beauty consumers buy products based on influencer recommendations.
Not very long ago, none of that was true. The fragmented beauty retail landscape is moving at hyper speed, and retailers born into a completely different environment are under extreme pressure to keep up. To help brainstorm how to stay competitive, Beauty Independent gathered retail leaders, including from Ulta Beauty, Nordstrom, CVS, Macy’s, Credo, QVC, TJ Maxx and Marshalls’ parent company TJX, Moda Operandi and The Detox Market, for an intimate, invite-only summit sponsored by Flix Media during the BITE trade show on Sept. 10 in New York City.
Below, we highlight five top takeaways from the event.
Consumer-Centric CLARITY
Faced with fickle shoppers who jump from one channel to another, retailers must understand who their core customer is and focus on delivering the right proposition for them across assortment, services and experience. Jill Granoff, senior advisor at private asset management group Eurazeo and a member of Macy’s Inc.’s board, pointed to Bluemercury as a shining example of how consumer-centric retailing yields positive results. The Macy’s-owned luxury beauty specialty retailer has registered 18 consecutive quarters of comparable-store growth.
“Having a curated assortment is what Bluemercury really excels at. It’s an intimate shopping environment where they have an experience that’s catered to their customer,” she said. “I think that Sephora has become young. People my age maybe don’t feel as comfortable shopping there anymore. I think that Ulta is certainly strong, but it’s mass, it’s class, it’s services, etc.”
Michelle Leblanc, VP of beauty and personal care and Hispanic strategy at CVS, underscored the importance of education and trust to the customer experience at CVS, the largest national drugstore chain in the United States. To keep its offering aligned with consumer expectations, the retailer brought on an in-house dermatologist to advise on content and evaluate its assortment.
CROSS-Channel Mastery
It’s no longer enough to just skate by on the strength of brick-and-mortar stores alone. Retailers that ignore digital channels will be quickly left behind as the next generation of shoppers turn to TikTok and artificial intelligence-driven platforms. Retailers that play in both physical and online channels must then seamlessly integrate them to unlock success.
“People are searching for convenience,” noted Granoff. “I think the integration of digital and physical is really important. I mean, Macy’s business today is probably a third digital.”
CVS has a customer base that often shops across channels in the same day. Leblanc explained that CVS shoppers who search for products on the chain’s website typically convert in one of its 9,000-plus store locations within 24 hours. She said, “How you show up and how you’re talking to your customer and how your channels interact with one another in a seamless way is also, I think, where we’re continuing to win.”
Distinct Authority
Leblanc said CVS previously lacked a clear strategy in beauty and personal care. Instead, it looked to the beauty specialty channel for inspiration. The approach didn’t work, so the drugstore chain shifted gears to focus on what it had equity in: the intersection of beauty and wellness.
“We’re the OG of that trend. We are one of the first health and wellness beauty retailers full stop,” she emphasized. “I’ve really brought that to the forefront of our strategy to say, I need to be who I am and really embrace that. I feel like we were, in a way, chasing specialty because that was the shiny object. There is so much value in the dull pennies left behind.”
Bigger Bets
After over 20 years at Saks Fifth Avenue where she last held the role of SVP, Kate Oldham has witnessed the digital transformation of the beauty retail industry in real time. In a mobile-first environment where speed is king and trend cycles are typically short, she believes retailers have to be ready to pounce on brands and trends with more agility than ever before.
“The speed in which you bring to the consumer is 15 times faster than it was when I started out,” said Oldham. “You have to go big as soon as it hits and it wins. You have to be everywhere.” She added, “You have to bring them something within a brand that makes it interesting. Whether it’s eventing, whether it’s a new product, whether it’s a launch, it’s very important for the consumer to have ‘new.’”
NICHe Specialization
With deep expertise in the spa and hospitality industries, Jeannie Jarnot has fostered a different kind of experience at Beauty Heroes, the clean beauty retail company she founded as an e-tail and subscription box service in 2014 before opening a brick-and-mortar store in Novato, Calif., in 2019. With a focus on values-based brands and spa-style beauty services, Beauty Heroes is leaning into what makes it unique instead of competing with larger retailers with more generalized assortments and less high-touch services.
“I think what Beauty Heroes now offers is maybe an alternative to the Amazon experience or to other experiences,” said Jarnot. “[We] need to stay really true to who we are as a beauty wellness and hospitality company. And that is…where we’re really succeeding and where we’re really thriving.”
