Beauty Retailing USA Sub-channels

Understanding The Ebb and Flow of Beauty Retail

With increased vaccinations, the lifting of mandates that required mask-wearing and social distancing, and a return to offices and travel, consumers are once again visiting stores to play catchup on the months they were stuck at home. So what does this mean for beauty in brick-and-mortar?  

While consumers are eager to resume their pre-pandemic routines and experience in-store shopping again, Kline anticipates a slow revival of brick-and-mortar beauty sales. Our soon-to-be-published Beauty Retailing USA report reveals that retail sales for physical locations will be essentially flat in 2021 compared to 2020, while the all-channel forecasted growth will be 3.7%, led by e-commerce.  

A significant reason for the gradual rebound of beauty store sales is that consumers are not visiting stores as regularly as they once were. Kline’s analysis of foot-traffic data, specifically for beauty boutique retailers, from SafeGraph tells us that foot traffic has yet to return to pre-pandemic levels. In fact, foot traffic from January 2021 to April 2021 was only about 66% of what it was during the same period in 2019.   

One of the keys to recovery for brick-and-mortar retailers and bringing consumers back to stores will be adapting to the new shopping habits of consumers. The continual decline in consumer visits to malls is forcing retailers to look elsewhere, with off-price and off-mall retailers on the rise in recent years (such activity was boosted further by the pandemic).  

Notable department stores, such as Nordstrom Local and Nordstrom Rack, Markey by Macy’s and Macy’s Backstage, and Bloomies by Bloomingdale’s, have looked to open new concepts. These will offer a more curated assortment of products from a variety of categories but also seek to better serve the price-conscious consumer. Their efforts are anticipated to support the low-end department store sub-channel, which will most likely see growth by 2025 with a CAGR of 3.1%, as per data from the Beauty Retailing USA report. Meanwhile, department stores aren’t the only type of retailer looking to revamp their strategy, as Sephora and Bath & Body Works are also looking to off-mall locations and open free-standing stores.  

To learn more about the COVID and post-COVID beauty retail environment from a channel and sub-channel lens and understand the shifts in performance in the beauty boutique channel on a month-to-month basis, follow our Beauty Retailing USA and Retailer Tracking: Monthly Monitor of U.S. Boutique Beauty Retailers reports.

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