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Are department stores fit for purpose?

Imogen Matthews Associates delivers valuable insights and opinion on the trends that are having the greatest impact on the Premium Beauty Industry. Here, Imogen reveals some surprising research on the role of the department store in light of the rise of the online beauty market.

With their hallowed perfumery halls, lavishly appointed counters and sales staff in white coats, the department store lies at the heart of premium beauty distribution. At least that’s the impression they want to give. However, it’s an idea that many women may no longer agree with.

A startling statistic from this year’s Premium Market Report 2013 (out next month) reveals that women are turning their backs on retail when shopping for premium beauty products. Just 17% of women surveyed* say they only buy premium beauty and fragrances from retail shops. The implications are stark: the Internet is taking on beauty retail and winning.

Susan Taylor, former managing director of Elizabeth Arden, and current chairman of Look Good…Feel Better, questions whether department stores are still “fit for purpose”.

Resource and capex heavy, department stores are failing to keep pace with online, which is becoming more efficient and sophisticated.

The Role of the Department Store

First and foremost, department stores {and indeed the High Street} are there to enhance the retail experience, providing:

*A showcase for their goods
*An environment to meet the needs of the consumer
*A desirable interlude, not only to purchase, but to browse, linger and observe other shoppers
*The emotional experience – the part that online can never quite reach

“Stepping through the doors of a department store immediately provides an atmosphere of life and luxury. At the top end of this experience is a richness that becomes entertainment. Take Harrods current world of Dior, or Selfridges Festival of Fragrances. These are experiences that go beyond shopping. They enlighten and enrich our knowledge into our favourite products. Inspired ideas such as these provide a reason to extend the shopping time and explore what else is available.”

According to Susan, department stores need to focus on the areas they do best.

“Even on a more basic level, the old Estée Lauder formula of GWP {gift with purchase} continues to be successful. Many brands have tried to break with the tradition only to return. Why? Because despite reduced profitability for a brand, it drives volume and provides an opportunity to create its own particular theatre and enhance its identity in store.

The GWP experience is still key to most department store chains. There is no alternative that’s as effective at driving the shopping peaks.”

“Service” is a word associated with department stores that is often preached, but not practiced often enough.”

Susan points out that retailers and brands spend considerable time and money educating their staff, but don’t get the right recruits. Many love the products they sell, but not necessarily the people they are serving.

“A successful consultant/sales assistant is one who wants to ensure that her customer is truly satisfied and will return. The right sales person is an invaluable asset who exemplifies a brand through the quality of service she provides.”

Susan adds: “No online experience can compete with stepping out of a store, feeling great about the way you look and what you’ve just purchased.”

Department stores should also look around at what other new retailers are doing. H&M’s & Other Stories shop in Regent Street, London, merchandises fashion, accessories and beauty in a way that reflects the way women shop – individual looks are colour coordinated with suitable eye shadows, belts and jewellery.

“Department stores could do things in a similar way, by placing items of beauty next to other products,” says Susan. “They cannot exist just to be beautiful showcases. They have to monetise their investment and keep their offer looking fresh.”

* Based on a YouGov/Premium Market Report survey of 1,082 women aged 18+, February 2013

Contact IMA on:

t : +44 (0)1865 764 918

e :

The Red Tree is the UK’s leading international beauty brand consultancy and a powerhouse of ideas, insight and inspiration. For an informal discussion on how we might help you, please contact us.

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