The Future of Beauty Retailing Is Here Now!

Our Thoughts

03/03/2017 by The Red Tree

Stirling Murray, Founder, The Red Tree Consultancy Ltd, gives an alternative view on beauty retail, its challenges and where he sees future opportunities.

Unprecedented change

We are going through unprecedented change within the beauty bricks ‘n’ mortar landscape. Is this making it harder for new and niche brands to build their business or is it easier?

The major retailers have tried for years to build areas in store where niche brands can be nurtured and developed. Boots had Beauty Discovery, and House of Fraser The Apothecary.

For many reasons – among them the gap between the vision and the practicality of its store implementation – neither worked.

Selfridges has Beauty Workshop and Harvey Nichols Spirit but both require considerable effort to establish and build a business and often more effort than a new brand can manage.

But the opportunities outside of the traditional bricks ‘n’ mortar routes to market are expanding rapidly giving new brands more opportunity than ever before.

Opportunity exists outside traditional bricks ‘n’ mortar

Every new brand has its own ecommerce website (if it doesn’t it’s crazy), where every sale can generate as much gross margin as selling 3 products through a retailer. That’s great but it means that awareness has to be driven by ways other than in-store visibility – the old way of building awareness.

But there is another fast moving development that, if successful, will change the bricks ‘n’ mortar retail landscape yet again.

We are seeing the launch of small (by department store comparison) units that sell carefully curated offers both from major and niche beauty brands.

Fabled, the Marie Claire beauty store, has recently opened in Central London. It’s like a pared down Sephora with plenty of opportunities for consumers to interact with products and advice on how to work different looks using products from different ranges. Niche brands have their own area with space to to try and test. The atmosphere feels more inviting and less frenetic than a department store.

“Indulge in Beauty”, the Manchester fine fragrance concept backed by The Fragrance Shop is expanding with its “small” first beauty store in June – again with an edited mix of major brands and new and niche brands across the beauty spectrum. With its ambitious expansion plans Indulge is likely to set a template for others to follow.

And of course if the rumours are true, Sephora – considered by many to be the best in class for premium beauty retailing – will attempt to get back into the UK – only this time they will do it right.

Getting it right

The perfect example of a smaller scale retailer offering beauty as an integral part of its product mix is Oliver Bonas.

Like a department store in miniature it sells clothing, books, pictures, furniture, home accessories and beauty. It feels right, provides a pleasurable browsing experience and is always changing with constant subtle shifts in its product mix.

A fraction of the size of a department store, its atmosphere and product is perfectly suited to its target market – female, young, affluent, smart consumers who are very unlikely to enter the doors of a traditional department store to buy beauty.

Oliver Bonas is not alone – Anthropologie and Urban Outfitters both have a quirky mix of products from vinyl to china and are determined to build strong and diligently targeted beauty offers.

What we are seeing is an extension of what the big brands have been doing for some time – stand alone small scale retail units dedicated to one brand and offering a very different, more personal shopping experience.

So is it easier for niche brands to launch and build?

If you intimately know your target market and their habits, and know where they shop, it is.

And we haven’t even touched on how ecommerce players are changing the rules.

This article first appeared as a guest blog on ImogenMatthews.co.uk.

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.