In August, Nordstrom shuffled the handbag and jewelry departments away from the main entrance of its New York City flagship to make way for a renovated beauty floor. Three months later and roughly twenty blocks south, a similar makeover is taking place at Macy’s.
“We believe the future of beauty is now, and we are bringing it to our consumers at this point in our flagship,” said Nicolette Bosco, vp and dmm of beauty at Macy’s. “We really started with [CEO Tony Spring’s] Bold New Chapter vision, and what he set out was really elevating the customer experience.”
At its storied Herald Square location, Macy’s, too, moved the handbags from the front entrance to unveil a renovated beauty floor. The first half of the two-part renovation, completed in time for the 2025 holiday shopping season, welcomed new in-store displays from designer brands like Dior and Chanel and inaugurated new brands to the portfolio, including the luxury skin-care line Augustinus Bader and niche fragrance pioneer Byredo. Upon completion in 2026, Bosco said the store will dedicate 54,000 square feet to beauty.
Those investments speak not just to beauty’s power to drive sales at a time when luxury apparel brands face declining sales, but to the increased importance of experiential retail amid a competitive environment. Retailers like Sephora and Ulta have expanded to give consumers a more immediate way to shop beauty without the intermediary of a department store counter. And in more recent months, retailers like Amazon have curated an expanded beauty offering with the convenience of online delivery.
“Beauty as a category drives very strong foot traffic. If you think back historically, beauty has generally been merchandised on the ground, because it captures the consumer and then it’s an encouragement to shop the rest of the department store,” said Fei-Fei Zhang, head of beauty investment banking for North America at J.P. Morgan. “And what transpired was just the competitiveness of specialty retail and open-cell formats. That made the convenience of prestige beauty a lot more accessible. And I think department stores resisted that, and so you saw this shift, which really led to the rise of Sephora, Ulta and others.”
Standing out in such an environment means offering not just a curated brand selection, but also high-touch in-person services.
Both Nordstrom’s and Macy’s beauty renovations not only include dedicating square footage front and center at the entrance, but also offering expanded services. Nordstrom’s Columbus Circle store now offers more than 250 complimentary and paid beauty services, such as manicures and brow treatments. At Macy’s, the second phase of its renovation, slated to open in 2026, will include “relaxation rooms” offering complimentary beauty services to its clientele.
“We are making it so there will be a really serene environment as you go into these spa locations,” said Bosco.
Dedicated beauty retailers have also upped their offerings when it comes to eventing and services. Ulta Beauty expanded its events calendar in 2025 to include some 70,000 events across its stores and raised the profile of its in-store salon services through brand partnerships with the likes of Cécred. The trend has expanded globally, as well: In August, beauty chain Mecca unveiled a 40,000-square-foot flagship in Melbourne with features including an on-site skin studio and hair salon.
“The consumer values experience. They value a more service-oriented experience,” said Zhang. “We live in such a digital world. Product discovery and education are much more accessible through social media and the internet, but there’s still fundamentally this experiential element to beauty.”
Both department store giants have also devoted more floor space to beauty’s hottest category: fragrance.
“At Macy’s, we’re the fragrance destination,” said Bosco. “We really want to make sure, for our beauty and fragrance consumers that have come to know and love us for certain fragrance brands, that we’re really expanding and giving them the full beauty opportunity.”
Macy’s renovated Herald Square store has made way for new additions to its fragrance portfolio, including luxury brands like Creed and Parfums de Marly. Gift-wrapping and engraving services are also available for fragrances from brands like Valentino and Prada. At Nordstrom, meanwhile, the Columbus Circle flagship has welcomed newer fragrance brands like Troye Sivan’s Tsu Lange Yor and Courrèges.
Both retailers have also emphasized tech in their fragrance offerings: Macy’s Parfums de Marly display includes a VR headset designed to immerse consumers in the brand’s storytelling. while Nordstrom is home to Puig’s AirParfum virtual display, allowing consumers to search for and try perfumes from Nordstrom’s catalog.
“The pace of growth for the fragrance category has been really exceptional; it’s been outpacing the category more broadly,” said Zhang. “It is naturally a product that people want to be able to engage and interact with; historically, fragrance has been one of the strongest drivers for the category in department stores. And I think that has maybe amplified just because of the pace of growth for that category.”
Department stores across the U.S. have undergone upheaval in recent years, with many reducing their footprints nationwide. In 2024, Macy’s announced plans to close 150 stores by the end of 2026. In May, the Nordstrom family took the Seattle-based department store private in a $6.25 billion buyout deal.
But reducing reach to focus on high-performing stores has led to signs of a turnaround at Macy’s. In its second quarter 2025 results published in September, Macy’s Inc., which owns Bloomingdale’s and Bluemercury along with the nameplate business, posted a comparable sales growth of 1.1% at its 125 modernized, “Reimagine” fleet of stores.
But the American department store landscape remains in flux. Saks Global, which owns Saks Fifth Avenue, has seen numerous executive shakeups as it approaches the one-year anniversary of its takeover of Neiman Marcus. But even in a shifting retail environment, beauty remains a strong bet.
“Overall beauty as a category has historically always shown really strong resiliency. And that’s because it’s a highly replenishable category across the board,” said Zhang. “Your consumers are going to continue to wash their face, use moisturizer, put on makeup and put fragrance on. Those aren’t things that generally people stop doing, even in a weaker economic cycle.”
