When Dr. Barbara Sturm launched her eponymous luxury skin-care brand in 2014, she decided her first retail partner would not be a physical store, but instead Net-a-Porter. It was a novel concept at the time.
“People would tell me, ‘You cannot sell beauty online. Nobody buys beauty online,’” said Dr. Sturm. But Net-a-Porter proved to be a successful partner. “It was great because lots of other retailers learned about my brand through the Net-a-Porter partnership. I got into all these other retailers through Net-a-Porter,” she said.
When it was reported in August that Farfetch would be shuttering its beauty division, the move caused speculation about the viability of beauty in the luxury fashion e-tailer business model. For indie luxury beauty brands, these e-tailers have been among the retail partner options offering startups a platform for driving brand awareness with high-end positioning.
“Brands are in this gray area and wondering where they go now, in terms of selling at a luxury price point,” said April Uchitel, former CEO of Violet Grey and current CEO of The Board, an agency and community she founded for fractional executives. She led Violet Grey until 2020 and consulted with Farfetch when it acquired the company in 2022 as part of its beauty launch. “There’s definitely no standout [retailer], in that same way that there used to be, where you knew, ‘I start here and build my brand,” she said. “It’s become hard for early-stage companies.”
Entering a big department store is harder for the smaller emerging brands, said Uchitel. One exception to this was Barneys, she said, which closed in 2020.
“Everybody’s still reeling from the Barneys loss,” said Uchitel. “I do continue to hear that Barneys was never replaced, on the beauty side, where that luxury consumer could really discover. Barneys built brands. What you hear the most from brands is that there’s a black hole there.”
“Barneys always did an excellent job with beauty because they actually fostered brand-building,” said Kelly Atterton, a beauty editor and consultant who also consulted with Farfetch on its beauty launch. “They brought on small brands and made them into important brands. They really tackled it.”
Despite Farfetch’s closure, many indie luxury beauty brands still see luxury fashion e-tailers as solid choices for early retail partners.
Figaro Apothecary, a luxury skin-care brand founded this year by artist Jennifer de Klaver and former J.Crew creative director Scott Formby, launched with hip fashion e-tailer Ssense as its first retail partner in May this year.
“Ssense was a strategic choice for Figaro Apothecary,” said Formby, who cited its “trendsetting approach and global reach” as appealing reasons for the choice.
For luxury e-tailers, global distribution is important to brands.
“This partnership not only aligned with our brand’s luxury positioning, but it also provided a global platform that pushed us to ensure compliance for international distribution. While the development process took longer due to global compliance, this step has been crucial in setting us up for successful global expansion from the start,” said de Klaver.
But luxury fashion e-tailers need to realize that beauty is “a different beast” from fashion, said Uchitel.
“Retailers think that getting into beauty is going to be a little bit easier than it is. Beauty now is a really different playing field,” said Atterton. “You need to build out the beauty arm of your business as something to be trusted and looked to for trend direction.”
According to Uchitel, specialty e-tailers that are focused on beauty, like Goop and Violet Grey, have a built-in advantage of beauty expertise despite a smaller scale than the top luxury fashion e-tailers.
But in addition to prestige, luxury beauty brands are simultaneously looking for scale and access to younger shoppers in a retail partner. As a result, more beauty brands with products at a luxury price point are making their way into retailers like Ulta Beauty and Amazon.
“I see brands just shifting [consideration] around some partnerships that maybe would have been a hard no a couple years ago,” said Uchitel.
Ulta Beauty was announced as the retail partner for Rabanne’s expansion into makeup in August, which came after Chanel launched with the retailer in 2022. Luxury brands are still steering clear of big box, however, as Chanel and Dior Beauty are both available through Ulta Beauty but not via Ulta Beauty’s Target partnership. Dr. Barbara Sturm, meanwhile, is available through Sephora but not Sephora at Kohl’s.
“They’re just trying to go where their customer is. At a certain point in your growth cycle, you’re kind of tapped out and you have to look at other points of distribution,” said Uchitel.
As the customer acquisition cost has become more costly due to the iOS changes on social media, retail partnerships are more important than ever for both brand awareness and customer loyalty.
After “what happened with the iOS changes and the ‘crack cocaine’ of paid marketing, brands are now like, ‘OK, who do I already have [as customers], and how can I make sure they’re coming back and shopping more?'” said Uchitel,
Dr. Barbara Sturm joined Amazon’s growing luxury beauty section in August 2022 due to its value for replenishment and fast shipping, said Dr. Sturm.
Luxury has become more accepted in mass channels, said Uchitel.
“Back in the day, we at Violet Grey were in conversation with Amazon to do a partnership. Luxury beauty was terrified of Amazon,” said Uchitel. “When the news leaked that we were talking to Amazon, a lot of the brands that we carried kind of freaked out.” Now, “you see a lot more luxury brands that have gone on Amazon.”
Amazon has offered elevated positioning for luxury beauty brands with a standalone section, and brands have invested in putting a luxury twist on Amazon-related marketing. Dr. Barbara Sturm’s brand, for example, celebrated its Amazon launch with a star-studded Hamptons dinner.
“You still have to find the channels where your customer shops,” said Sturm. “It needs to really represent your customer.”