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    Online Exclusives

    In the Neighborhood

    While most brick and mortar retailers are closing doors, Bluemercury keeps opening new ones.

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    Christine Esposito, Associate Editor05.30.17
    Bluemercury founder Barry Beck didn’t know much about the beauty business in the late 1990s when he came upon a small cosmetics shop in Washington, DC. But that hasn’t stopped him from building one of the largest and fastest growing luxury beauty store and spa chains in the US.
     
     
    Beck co-founded Bluemercury Inc. in 1999 with his wife (Marla Malcolm Beck). He is COO, overseeing all aspects of Bluemercury’s operations and leading the company's strategic growth initiatives. And that makes him a busy man.
     
     
    That’s because Bluemercury is thriving. At a time when brick and mortar retail is struggling, the company is set to open nearly 40 doors this year alone.
     
     
    The secret to Bluemercury’s success can be attributed to Beck’s laser focus on understanding who his customers are and finding out where they live.
     
     
    “Our core clients are educated, affluent and comfortable in their own skin,” Beck told Happi. And while his customers range from college grads to new moms to empty nesters, Beck contends they all have something in common that draws them into his stores: “They want solutions to their beauty issues,” he said.
     
     
    But Beck admits he was far from a beauty expert when came across a boutique in the Georgetown neighborhood of Washington, DC that was selling two interesting cosmetic brands that weren’t widely distributed—NARS and Kiehls.
     
     
    “Fireworks went off in my head,” Beck said, thinking back to when he saw what at the time were obscure brands not found were people were buying higher-end makeup. “Back then you could only buy cosmetics at department stores.”
     
     
    In September, 1999, he bought that Georgetown boutique and renamed it Bluemercury.
     
     
    But he soon faced a challenge; Sephora opened up a store two doors down from his shop.
     
     
    “I had to quickly learn who we were,” he said.
     
     
    Beck’s real estate acumen has helped Bluemercury carve out its unique position in the beauty retail scene.
     
     
    “Location is still everything. Finding real estate is science and art,” said Beck, whose strategy centers on opening stores in busy, high density neighborhoods.
     
     
    And he doesn’t shy away from putting stores close together—if the numbers are right. For example, he decided to open store No. 96 just one mile away from that very first Bluemercury location in DC. Both doors remain open today, and Beck insists that there’s been no cannibalization.
     
     
    When Happi connected with Beck in late April just after the Global Retailing Conference 2017, Bluemercury had 131 stores up and running, and he was slated to open three more doors that week alone.
     
     
    Another secret to the company’s success, according to Beck, has been its ability to curate a collection of great brands and the development of its own brand too—the M61 line—which give customers what they need.
     
     
    To find out what Bluemercury customers want, Beck told Happi he spends “an enormous amount of time mining data about my customers.”
     
     
    And customers of the future too. Beck pointed to the 70 million people under the age of 18 in the US. These digital natives, he insists, will have a profound effect on retail, and the challenge is to figure out how these customers are going to behave in the future.
     
     
    “The biggest worry for any executive is having your business ‘Uber’ed—disrupted by customer behavior trends that you weren’t even aware of,” Beck said, referring to the "transportation network" company.
     
     
    As for what Beck is paying close attention to these days, population growth is high on the list.
     
     
    Citing rising population figures and increased traffic in major cities like New York and Miami, Beck said, “Densification will lead to localization. People will shop where they live their lives.”
     
     
    As recently as 15 years ago, 90% of all prestige cosmetics were sold in department stores; by 2014, it was down to 60% and it is still sinking, according to Beck.
     
     
    No wonder, then, why Macy’s bought Bluemercury in 2015 for $210 million. The deal marked Macy’s first acquisition in more than a decade.
     
     
    “The structure of the industry has changed,” Beck said. “Clients are shopping in their neighborhood.”
     
     
    And Beck’s plan is to make sure there’s a Bluemercury just around the corner.
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