The 5 Coolest Things Happening in Beauty Retail

For brick and mortar beauty retailers, online beauty shopping trends are frightening.

At a recent CEW event with speakers from Mintel, Nielsen and The NPD Group, our team learned that social media influences 66 percent of beauty purchases. Does that mean brick and mortar beauty is dead?

An adamant “no,” came from Larissa Jensen, beauty industry analyst at NPD. In fact, she shared that 37 percent of makeup consumers still shop in beauty specialty stores. Sales at independent makeup stores (like e.l.f., Bluemercury, Ulta and Sephora) skyrocketed by 42.7 percent in 2016 alone and now account for 20 percent of total beauty market sales. That’s in addition to the fact that 85 percent of overall retail sales are still produced in brick and mortar stores

In order for beauty retailers to keep up, though, they need to stay relevant and focus on upgraded experiences. But they can’t do that without personal care brands as their vendor partners. Here are few themes we’re seeing in beauty retail that retailers and personal care brands should take note of:

• Facial Recognition: New technology in retail stores and online monitor customer eye habits and body language, which can help inform store layouts. The facial monitoring determines customers’ feelings or thoughts on products. 

READ: In store, stand-out packaging is more important than ever, as is shelf placement and customer education. Outside the store, virtual reality beauty application is the new normal.

• Physical Customization: Angus.ai is testing out technology based in consumer insights that will aid store associates in identifying the shoppers who are exploring, need more information or are expressing frustration during their in-store experience. (Mintel)

READ: Although it sounds counterintuitive, this technology underscores the need for fueling personalized, helpful touchpoints with store associates.

• Emotional Customization:  Technologies now focus on how beauty products make you feel over how they make you look. For example, Sephora launched a makeup test based on personality rather than looks.

READ: Color matching and skincare customization are so last year. Consider the impact of emotional connections that brands, products and store experiences have on the customer.

• Private Label: Retailers’ store brands have grown cosmetic sales nearly 3x faster than the entire cosmetics category, demonstrating that anyone can have a relevant beauty brand. This is also evidenced by Walmart’s announcement last week to launch a digital cosmetic brand with model Coco Rocha fronting the line. (Nielsen)

READ: Private label is here to stay. In fact, 70 percent of consumers said drugstore and specialty shop makeup was just as good as designer department store cosmetics. To overcome private label competition, brands will need to approach their business from a loyalty-building perspective, focused on getting consumers to upgrade.

• Bigger Than Themselves: Beauty retailers are getting more involved in the inclusion movement. For instance, Sephora used their own employees in their latest ad campaign and CVS went as far as eliminating air brushing for its own product content and have asked their vendors to do the same.

READ: Beauty retailers can play the societal values game too. Expect this to continue, as they (like grocery stores) are often the customer’s last touchpoint before purchase and deserve to drive the values system forward.

Curious how you can evolve your strategies to impact in-store or online sales? Connect with us.

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