Digital disruption has brought huge changes to retail and the beauty industry, yet beauty brands are continuing to invest in their physical retail. Marketing and New Business Director, David Wright, explores why.
At D&P, we work with brands across a range of sectors to help them navigate the shifting consumer landscape. A lot of this change has been caused by digital disruption, bringing challenges and opportunities to every industry. Digital has been huge for the beauty sector in particular. It’s meant brands can talk directly to their customers, both individually and en masse. It’s become home to a number of mighty influencers who’ve amassed immense followings. It’s also launched a number of DNVBs (digitally native vector brands), selling through online channels to avid fans. Yet, despite all the change, many consumers still prefer to buy their beauty products offline through physical experiences.
According to an Opinium Retail Tracker survey, 50% of British consumers would rather buy their beauty/grooming products in store while only 16% mainly shop for them online. Over in the U.S., the trend continues and the preference is even stronger amongst Gen Z, a group of consumers used to buying everything online. A survey found 90% of them would rather shop for beauty products in-store. At a time when physical retail is undergoing huge change and challenges, beauty remains a brick-and-mortar stronghold. So why is this the case?
Despite the convenience of online shopping, testing out products in person is still extremely important to beauty customers. Sephora introduced the try-before-you-buy concept to beauty retail decades ago and today, shoppers will still happily make the trip to a store to get the perfect shade match. While tech that allows customers to virtually try on makeup is improving, such as Sephora’s Virtual Artist app or L’Oreal’s Virtual Try On function on their website, testing out products in real life is still considered more trustworthy. Shoppers also get to feel a product’s texture, find out its scent, and do a quick stress test. They also avoid the risk of buying a product online, finding out it’s not quite right when it arrives, and being unable to send it back due to beauty’s understandably strict return policies.
There’s also the fact that shopping for beauty products is also a vastly different experience than shopping for something like toilet roll. It’s a leisure activity for many, especially for those who like to visit beauty stores with friends. A beauty counter is a playground for makeup enthusiasts, offering a creative outlet with the opportunity to experiment with new products and try new looks. Knowledgeable sales assistants are also on hand to offer expert recommendations, advice, and IRL tutorials to each customer. In response to this, we worked with Boots to revamp its beauty offering, creating destinations that cater to shopper discovery and enjoyment. The Discovery Area in the entrance of the stores showcase new products and trends. Shoppers can get advice and guidance from staff in the Beauty Studios area.
Unlike other sectors, the beauty industry has long understood the importance of experiential retail and they’re still leading the way. Lush’s Liverpool store, the brand’s largest in the world, houses a hair salon, a spa, a florist, a tea and coffee bar, and even a music collection. Chanel’s Atelier Beauté in New York is also a well-thought-out store, with lockers to stash belongings in so visitors can shop unencumbered. Sinks with cleansing products sit near the entrance of the store so shoppers can wash their faces before exploring the space and applying Chanel products to their heart’s content. In Australia, Mecca Brands, which currently represents 10% of the country’s beauty market, has found success both with e-commerce and its brick-and-mortar stores where shoppers can attend make up classes and tutorials. The brand also hosts Meccaland, the country’s largest annual beauty festival, which features limited-edition exclusives, celebrity and influencer guests, and various experiences for attendees.
Many brands are also embracing technology to enhance their spaces and bring customers new experiences. Sephora opened a concept store in Shanghai filled with immersive technologies. A ‘cloud shelf’ allows customers to browse and purchase products online via touchscreen or voice and shoppers can virtually try on different makeup looks with AR-powered mirrors. Other brands are also implementing similar mirrors in their own stores, from Innisfree in Hangzhou to Charlotte Tilbury in London. Some may argue this tech negates the need to go to a store if it allows users to test products virtually, however retail spaces are the perfect setting for it. Shoppers can experiment quickly and easily without the hassle of applying and removing makeup and then immediately test out the product in person if they feel the need to before making a purchase.
Beauty brands, from the established to the startups, recognise there’s value for brands in meeting customers in real life (which is true for every sector). It’s why we’re seeing pop-ups from the likes of both Clinique and Birchbox and new flagships and spaces from Chanel, L’Oreal, and COTY. Even digital-fist wunderkind Glossier, which found success selling direct to consumers, has made a foray into physical retail. The brand understands the benefits it brings customers, such as giving them a chance to try out products. It also knows it goes beyond testing and even transactions. From the start, Glossier has understood the importance of community and wants their flagships to be spaces people can enjoy. Their stores also serve as a space to create content given their highly Instagrammable design. When customers spend time with a brand, their affinity for it grows, and creating shareable experiences means more people are likely to visit.
When it comes to buying beauty products, online shopping is especially useful for repeat purchases and will no doubt grow more popular as virtual testing technology advances and becomes more widespread. In the meantime, customers are happy to go to the store to try before they buy. To future-proof beauty stores, retailers need to make sure its spaces are considered and compelling, filled with exclusives, spaces to experiment, and plenty of relevant experiences to bring shoppers the sense of discovery and excitement they’re after.