Beauty Retailing Keeps the Market Alive with Alternate Channels and New Chains

Beauty Retailing Keeps the Market Alive with Alternate Channels and New Chains

The retail landscape for personal care products in the United States is constantly evolving with many consumers no longer finding themselves tied to one particular channel. This puts pressure on retailers to create a fun, seamless shopping experience whether a consumer is purchasing in a store, online, or using a smartphone or tablet. In today’s post, Donna Barson, Kline’s Senior Associate for Consumer Products Practice, reveals some of the newest and hottest trends from the U.S. beauty retailing scene.

Donna, what are the most exciting trends you’ve discovered this year?

Among the most exciting findings that we’ve discovered in our soon-to-be-published Beauty Retailing USA: Channel Analysis and Opportunities is that online sales continue to move upwards, showing double-digit growth in 2014. Alternate channels (which include online, home shopping, and specialty stores) show the strongest growth opportunity, and this is definitely a trend to watch, with the Internet/mobile segment showing the most growth. In addition, flash sites such as Haute Look and Gilt are still growing, subscription boxes such as Birchbox and Allure are also on the rise, and some of them are now specialized in a particular product category, such as fragrances or nails. There is also a growing trend for curated collections in both online and physical retailers.

Is there a channel that consumers prefer to purchase beauty products?

Consumers are channel agnostic and will purchase in any channel that is convenient for them at that moment. Consumers love samples, loyalty programs, and the feeling like they are rewarded, so consumers will be more inclined to follow a brand or distribution channel that adds value.

Are there any new beauty shopping destinations that you’ve discovered?

Yes. For example, Kohl’s is working to become a beauty destination, actively pursuing new brands as part of their approach to carry more national brands. The retailer presents about 30 brands in the past year and Bliss, Hydroxatone, H2O Plus, Lorac, Pur Minerals, and Cargo in 2015. Several new vertically-integrated specialty stores add the United States to their store roster during 2014, including Milano Kiko, Aesop, Rituals, and Tony Moly.

Two multi-brand beauty specialty stores are expected to start expanding during 2015. Beauty Brands, which has had the backing of an investment banking firm and several people from competitor Ulta at the helm since early 2014, is expected to open 50 new locations during 2015. In February 2015, Macy’s bought the Blue Mercury chain, with speculation that the number of Blue Mercury locations is expected to expand later in the year.

How are infomercial brands doing?

Infomercial brands continue to invest in infomercials, but a number of them continue to step over to retail outlets in a developing trend, such as Meaningful Beauty in Ulta, Wen in Sephora, and Christie Brinkley Authentic Skincare in Kohl’s. Several formerly infomercial-only brands continue to test out which physical retailers serves them best. Some examples of this are Meaningful Beauty, which was formerly in Sephora inside JC Penney locations before moving to Ulta, and Hydroxatone, which was formerly in Ulta, moves to Kohl’s in 2014.

Are there any other new direct shopping venues?

Yes, there are. Joyus is one of the most exciting new direct shopping venues to watch because it is a new format melding TV shopping and online shopping. Another direct shopping venue to watch is Evine Live, which is a rebranding of shop HQ, formerly shop NBC.

 

Stay ahead and learn more exciting facts about the complex and challenging retail landscape specific to beauty and personal care products in the United States from Kline’s soon-to-be-published Beauty Retailing USA: Channel Analysis and Opportunities.

An interview by Marcela Chifu, Marketing Coordinator ­- Kline’s Consumer Products Practice

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