5/11/17

Is Sephora Killing The Department Store Beauty Counter?

While mall staples and department stores continue to close their doors this year, one subset within the retail industry is enjoying higher sales and decent foot traffic: beauty products. But it’s not the traditional makeup counter inside your local department store that’s become a hot spot for customers, it’s the tech-heavy, try-before-you-buy beauty-specific stores like Sephora and Ulta. 

The New York Times reports that while prestige beauty sales in the United States rose 6% in the last year, that doesn’t mean every company selling cosmetics is doing well.

Sephora and Ulta — as well as a wealth of online beauty tutorials — have helped cut into the department store beauty market by luring away shoppers who now seem to be living by a more-is-more mantra: more technology, more brands, more options.

And that’s what stores like Sephora, which is owned by French conglomerate LVMH, offer with rows of brands and colorful palettes, not to mention the technology that allows customers to virtually try on everything from eyelashes to lipsticks.

Analysts say new technology and the demise of brand loyalty has turned stores like Sephora into a makeup lover’s candy store.

“For the older consumer it can be confusing,” Karen Grant, the global beauty industry analyst at the NPD Group, tells the Times. “But for the younger consumer, it’s like, ‘Wheeeee! Look at that! Look at that!’ It’s all about play. And the more time you stay in the store or online, the more money you are likely to spend.”

It’s a shift that Sephora has enjoyed. The company operates more than 2,300 locations in 33 countries.

The company says it’s working to embrace customers changing expectations. With thousands of beauty tutorials appearing on sties like YouTube, there’s less need for makeup artists, but more space for product options.

Deborah Yeh, Sephora’s senior vice president for marketing and branding, tells the Times that the company is currently working to cut through the confusion created by so many voices in the beauty industry.

While Sephora’s closest competition is Ulta, which focuses on both high-end and drug store beauty products, as well as salon services, that doesn’t mean department store chains are giving up on their beauty offerings.

The Times reports that at Macy’s beauty sales people have begun shilling all brands not just one counter. Additionally, the company bought beauty boutique Bluemercury in 2015 and has begun incorporating those products at stores, while opening stand alone locations. 

Others are embracing the standalone beauty retailers. JCPenney, for instance, already operates dozens of store-within-a-store Sephora locations. Last month, the company announced it would expand that partnership adding more in-store locations, bringing the total Sephora presence in JCPenney stores to 650 locations.

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