Luxury beauty has always been about service, exclusivity and personalization, but as the beauty industry has grown to include clean ingredients, wellness trends and game-changing indie brands, retailers have had to change their definition of luxury to accommodate changing consumer values.
Over the past year, the luxury department store’s beauty counters have undergone transformations. Saks Fifth Avenue moved its beauty department at its New York City flagship to the second floor to make space for more services and brands, Barneys New York added a wellness category, and Neiman Marcus began using its millennial employees to find new brands. The luxury beauty industry reached nearly $18 billion in 2017, a 6 percent increase over 2016, according to research company The NPD Group.
Here’s how these department stores are tackling the changing concept of luxury.
This year, Neiman Marcus re-positioned its internal buying team and beauty department floor layout to cater to the indie beauty market and entice millennial buyers.
Starting in January 2018, the retailer assembled a task force comprised of 25 assistant buyers, merchandise planners and coordinators for the beauty merchant division. The internal team finds new brands that fit within Neiman Marcus’s three interest groups, focusing on wellness, trendy beauty categories like CBD and its events partnership with the Indie Beauty Expo. The force operates by searching for innovative indie brands by browsing social media and reading editorial content, in addition to pulling from their own real-life shopping experiences. The task force has identified and brought in over 75 brands this year, including Hero Cosmetics, Cannuka and Sunday Riley — Neiman Marcus added another 75 new brands to its beauty department through its traditional merchandising team.
“The beauty space is changing constantly,” said Kim D’Angelo, a beauty buyer for Neiman Marcus. “Our customers are savvy. They read, and they’re on social media. We decide [on new brands] based on their efficacy and social engagement, and if they represent a new product offering we don’t have yet.”
Neiman Marcus is also in the process of redesigning the store layout of its trending beauty section to be more in-step with the self-directed buying that is popular with Ulta and Sephora, D’Angelo said. (Neiman Marcus typically has its beauty products under glass, and each counter has a dedicated beauty adviser.) Trending beauty is available at 22 locations, including Beverly Hills, Fashion Island, San Francisco, Boston and Denver. Neiman Marcus will also open a new store in March at Hudson Yards in New York City, which will include the trending beauty category.
“A lot of the direction and guidance came from an [understanding] that younger customers are very self-directed, typically doing most of their research online,” she said. “There is nothing intimidating about the space at all, and it gives the customer the ability to walk in and see products [in person].”
Saks Fifth Avenue
At the heart of Saks Fifth Avenue’s beauty department strategy is a focus on services and luxury heritage brands, but the company is also trying to diversify its offerings through its apothecary wellness section, which launched in 2015 and is available in 24 locations. This newer section houses products like jade rollers and silk pillowcases at various price points. The apothecary allows Saks, which carries 193 brands, the ability to experiment with brands and beauty trends without diluting the luxury of its long-term brands like La Mer, Estée Lauder and Diptyque.
“The apothecary gives us the ability to move quickly on new things,” said Kate Oldham, svp and general merchandising manager for beauty, home and jewelry at Saks Fifth Avenue. So does Saks.com, which is now being used as a testing ground for new categories like hair care and possibly CBD, she said.
Saks is particularly bullish on hair care, and plans to roll out dedicated hair-care sections in five stores with Dyson and four other brands. The locations have yet to be determined, but they will be in stores where the apothecary offerings are not available, Oldham said, because the apothecary already offers some hair-care brands like R+Co.
“[Hair] is going to be a very big category for us going forward, and it’s going to be a category where people are willing to spend money.”
These movements are in step with when Saks Fifth Avenue’s New York City flagship store renovation. In May, Saks opened a new beauty department on the second floor of its flagship as part of a larger $250 million renovation. The beauty department was moved from the coveted first-floor space to the second floor, in order to add 50 brands, treatment rooms and spa services.
“We knew [moving to the second floor] could change the direction of our business, and we feel the service element was a very important differentiator in the wide range of the beauty world today,” Oldham said. Oldham declined to state sales of either its flagship beauty department or the beauty department for the entire company. “We have a great strategy, and we are doing well, so we don’t need to chase other people’s strategies,” she said.
Barneys New York
For Barneys, the idea of luxury remains embodied in its exclusive offerings, like Italian perfumer Tiziana Terenzi and lipstick brand La Bouche Rouge. However, earlier this year, the retailer opened up its beauty department as an events space and added a dedicated wellness category in March for brands like WelleCo and Moon Juice, in order to welcome more people and indie brands.
Barneys has already been dabbling in clean beauty over the past few years, according to Jennifer Miles, vp and divisional merchandise manager at Barneys New York, but 10 new clean brands were added in March to bring together a more cohesive wellness category.
“We are really going after this category of inner and outer beauty, and we haven’t even begun to scratch the surface of wellness,” Miles said.
The retailer also launched an initiative in March 2018 consisting of indie beauty pop-ups with brands that aren’t carried at Barneys, such as blend-it-yourself face mask brand Loli Beauty and wrinkle smoothing brand Sio. Events this year included curating supplement kits and custom blending skin care. The number of events will increase in 2019, although each store location has the freedom to determine how many and with what brands, Miles said.
“We are going to do more events [and make sure] they are more meaningful and different. You won’t just find a makeup artist on the floor,” she said. “It’s been very successful for us, in terms of exciting customers [and] also sales associates.”