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    Breaking News

    Brick-and-Mortar Retailing Reinvented

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    09.01.17
    With hundreds of new doors opening in various formats, expanding cosmetics specialty and vertically integrated stores that have grown at a compound annual growth rate of nearly 19% during the past five years—Ulta, Sephora, Bluemercury, NYX, Kiko Milano and e.l.f., for example—account for an estimated 20% of total beauty market sales, according to Kline’s new report, Beauty Retailing USA: Channel Analysis and Opportunities.


    “While traditional department stores experience declining traffic and store closures, brick-and-mortar is not a dying breed, but a rising phenomenon of specialty retailers and vertically integrated stores that set trends, provide open-sell environments, offer solution-based approaches in digital formats, and enhance the overall consumer experience,” commented Naira Aslanian, the study’s project manager.


    Bluemercury has made headlines in recent weeks, opening its digitally-enhanced flagship location in New York City, with plans to open 40 more stores by the end of the year (as reported by Happi). Further, Sephora this year opened its biggest and smallest stores in New York and Boston, respectively.


    This concept, according to Kline, is one step toward creating more curated and digital experiences for consumers in the real world. Alongside digital tools, increasingly demanding younger generations require one-on-one services, including 15-minute facials and 45-minute makeovers that drive consumers seeking a spa-like experience.


    Vertically-oriented boutique beauty stores, such as NYX, e.l.f., and Kiko Milano, are conquering local malls as these fast-growing newcomers offer unique concepts targeted to younger consumers at lower price points. These brands are increasingly offering digital enhancements, such as NYX’s iPads that help create different looks with beauty influencers/vloggers walking consumers through the process while in store, said Kline. Enhancing a customer’s experience with a brand is one of the key reasons for the incredible growth of these free-standing beauty stores, according to Kline’s report.


    Still, department stores are not giving up. Kline finds they are mimicking tactics of successful multi-brand specialty stores to draw more traction. For example, in early 2017, Bloomingdale’s launched the first Knockout Beauty boutique composed of prestige brands with a natural/organic slant. Nordstrom’s beauty area continues to evolve, bringing in brands with limited distribution and Neiman Marcus rolled out “Memory Mirrors” to help consumers remember the steps and products used during the in-store makeover.


    A different type of revival is evident in the direct sales channel, too. Previously characterized by powerhouses like Avon and Mary Kay, this segment has seen the rise of new stars that offer targeted, results-driven products have rely on social media platforms and millennial sales associates, such as Rodan + Fields, Younique, Beautycounter, Ever Skincare and Monat, according to Kline.


    More info: www.klinegroup.com
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