Can Revamped Magnificence Flooring Save Division Shops?

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NEW YORK, United States — For a short window, prospects at Saks Fifth Avenue can see magnificence’s previous and — the division retailer chain hopes — its future.

Beginning Tuesday, buyers coming into the chain’s Manhattan flagship will stroll via the unique magnificence flooring, a darkish enclave of branded counters that’s within the means of being shut down, to take an elevator one flooring as much as “Beauty 2.0.” They’ll emerge right into a brightly lit, white marble-clad house, with merchandise scattered throughout a maze of cabinets and shows, in addition to therapy centres providing facials and body-slimming massages. Mini-storefronts dedicated to manufacturers like Gucci and Kiehl’s line the periphery.

Saks is the newest division retailer chain to place the sweetness counter on the centre of its survival technique. US magnificence gross sales rose 6 p.c final 12 months to $17.7 billion, based on NPD Group, and cosmetics shows nonetheless attract crowds at a time when foot site visitors in malls and purchasing districts is falling. Saks and friends like Bloomingdale’s and Barneys New York rely on busy magnificence counters to drive gross sales at the same time as income from classes like footwear declines as a result of intense on-line competitors. Hudson’s Bay Co., which owns Saks, reported declining same-store gross sales for the chain in 2016 and 2017, although it partially rebounded within the first quarter of this 12 months.

At Saks, high-end skincare has been an “explosive” market lately, stated Kate Oldham, the corporate’s senior vice chairman and common merchandise supervisor of magnificence, jewelry and residential. However division retailer magnificence counters are shedding traction with shoppers, lots of whom discover the maze of show circumstances and polished attendants inaccessible and overwhelming. Based on NPD, 37 p.c of make-up shoppers in the present day store in specialty shops like Sephora and Ulta, in comparison with 28 p.c who depend on shops.

“The world of beauty has changed — everybody is getting into the business and there are a lot of new players coming in,” Oldham stated.

The brand new division retailer template is to entice shoppers with unique companies, merchandise and occasions. Nordstrom and Barneys New York, have launched pure and wellness classes to their line-up to courtroom health-conscious shoppers. Bloomingdale’s targets extra area of interest and unbiased manufacturers in its millennial-focused Glowhaus part, as does Neiman Marcus with its Trending Magnificence Store.

Shops are additionally creating new sights past the standard samples and makeovers. Final 12 months, Harrods debuted its Wellness Clinic, which supplies therapies starting from cryotherapy to bespoke DNA-driven skincare. Nordstrom collaborated with the sweetness web site Byrdie on a standalone pop-up store and occasion house that includes talks and masterclasses with buzzy trade figures like Jen Atkin and Joanna Vargas. In February, Barneys launched the same occasion collection hosted by model founders like WelleCo’s Elle Macpherson and a Sally Hershberger salon at its Madison Avenue flagship.

The objective is to offer prospects a “sense of discovery” and a cause to repeatedly return to the shop, stated Gemma Lionello the manager vice chairman and common merchandising supervisor of equipment, magnificence and residential at Nordstrom.

At Barneys, novel product classes like aware magnificence and masks are “attracting a new customer that might not have shopped with us before,” stated Jennifer Miles, the corporate’s senior vice chairman of cosmetics.

With a lot competitors swirling, the Saks workforce determined a complete revamp of its magnificence counter was wanted. That included shifting the part as much as the second flooring, a break with the division retailer custom to maintain magnificence entrance of home, however the house was larger (32,000 sq. ft) and had extra pure gentle. New white fixtures and installations highlight a wider choice of manufacturers — 122 in complete, together with 61 that hadn’t been beforehand bought at Saks, like Aesop, Care/of and Givenchy. Whereas, some, like Aesop, have been given their very own boutiques, most of the new manufacturers are relegated to a separate “Apothecary” part in the course of the shop, an idea already in place at different Saks areas.

The ground consists of house for occasions, together with perfume mixing and grasp lessons, in addition to 15 spa therapy rooms. A handful of these rooms are devoted to unique branded therapies by the likes of Dior and La Mer. Different highlights embrace pure face lifting from London-based FaceGym, a flower store from EB Florals and natural manicures from Sundays Nail Studio. A magnificence concierge is on the market to assist find merchandise and schedule service appointments, and an advisor is available to dole out personalised skincare recommendation.

Not all of those ideas are new: Nordstrom, for instance, additionally employs magnificence concierges and stylists, whereas Goal has had brand-agnostic magnificence specialists working its flooring since 2013. The brand new structure is blatantly harking back to a Sephora, although the boutique facet affords a degree of distinction.

The objective was to make the house extra “fluid,” stated Oldham, in order that prospects might simply store between classes. The partitions are at a low peak, so prospects can see throughout the ground, and there’s much less counter house so prospects can higher view the merchandise.

“We felt that if we were going to do something it had to really be a destination,” Oldham stated. “We really wanted to have a Saks point of view, so that it’s not just a box of brands.”

Attracting youthful prospects can also be a precedence. Along with a conventional advertising blitz that features advertisements on high of taxis and displayed on digital screens throughout the town, Saks employed digital influencers, together with YouTube star Kelsey Simone, to advertise Magnificence 2.zero.

Whereas Saks doesn’t escape gross sales by product class, analysts estimate the brand new flooring’s first-year gross sales might attain $90 million. That’s a fraction of Hudson’s Bay Co.’s $14.three billion in gross sales final 12 months. However the firm, which stated final 12 months it might minimize 2,000 jobs, is relying on Saks to drive development, investing $250 million in remodelling the fifth Avenue flagship retailer.

At Nordstrom, magnificence has been a “top-performing category” for a number of years, Lionello stated. However same-store gross sales grew by lower than analysts had anticipated within the first quarter, the corporate stated final week.

“It’s better late than never,” stated Larissa Jensen, the manager director and sweetness trade analyst at NPD. “[Saks] seems to be elevating it and making it more of a destination and less of a department, which is key.”

Nonetheless, these retailers have their work minimize out for them to claw again enterprise. Ulta’s gross sales shot up 21 p.c to $5.9 billion within the fiscal 12 months ending in February, and LVMH, which owns Sephora, stated the chain gained market share, with notably robust development in North America.

Perfume, nonetheless, remains to be a stronghold for shops. Fourty-six p.c of shoppers nonetheless store for perfume at shops, in comparison with solely 30 p.c at specialty shops, NPD stated. This might clarify why Saks doubled the house of its perfume part on the brand new flooring, and why Harrods expanded its Salon de Parfums with seven unique new boutiques final 12 months.

It might take greater than sprucing up the purchasing setting to push back competitors, particularly as on-line juggernauts like Amazon put money into magnificence. One downside: the division retailer idea as a complete falls flat with some shoppers.

“[These stores] are set up incorrectly, down to how they’re named,” stated Christopher Skinner, the founding father of College Home, a artistic branding and retail design company that works with purchasers like LVMH. “Shopping by department is just not how people work anymore, we’re all about breaking down barriers now.”

NPD’s Jensen stated shops might organise merchandise into sections that attraction to completely different classes of shopper, like those that worth environmentally pleasant merchandise.

“A consumer who cares about health and wellness, and the environment, shouldn’t have to go to the shoe department to get a sustainably-made shoe or the bag department to buy an ethically-made purse,” stated Jensen. “Wouldn’t it be great if it was just all one section?”

Malls are additionally giving their web sites’ magnificence sections a refresh, at the same time as they put money into their in-store experiences. Whereas in-store gross sales have been flat or declining at many of those chains, together with Hudson’s Bay, their on-line gross sales are for essentially the most half rising.

Though many of those retailers now supply the Amazon-era necessities of speedy transport and free returns, their on-line magnificence presence usually lags specialty retailer opponents. Sephora, for instance, has its Magnificence Insider Group, the place prospects share ideas and tips on message boards and rack up factors for purchasing. Its Sephora app affords unique previews and promotions, in addition to digital product try-on.

Saks launched its SaksFirst BeautyRewards programme in August, and the corporate, in addition to opponents like Neiman Marcus, is deploying new expertise like digital try-on mirrors in shops. Nonetheless, not like at Sephora, prospects should spend $250 to hitch, and this system lacks the neighborhood facet that has helped to popularise Magnificence Insider.

The Canadian division retailer Holt Renfrew has gone a step additional, giving associates the flexibility to trace shoppers who store each on-line and in particular person, and commonly incentivises them to cease by a retailer. It additionally equips associates with iPads to offer prospects further details about merchandise and make checkout simpler.

Malls might want to guarantee each their on-line and in-store magnificence counters preserve tempo with altering purchasing patterns, stated Karen Moon, the founding father of retail forecaster Trendalytics.

“[Even if changes like Saks’] bring higher volumes of foot traffic through the door today, retailers should ensure that their in-store and digital presences are prepared to take on the emerging trends of tomorrow,” she stated.

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