The Beauty of Retail

The Theory House summer interns recently completed a thorough vetting of beauty retailers. After exploring multiple types of stores, including Nordstrom, Dillard’s, Sephora, Ulta, Lush, Urban Outfitters, L’Occitane en Provence, Victoria’s Secret, and Target, here are the top beauty trends identified.

Going Natural: One of the most prominent trends in beauty is the focus on natural and how brands are communicating their commitment to the concept. Lush is paving the way for other retailers in the natural field. Their brand is built around the promise of natural ingredients, which they communicate in multiple ways. Lush’s slogan is “fresh, handmade cosmetics,” and they have achieved notoriety in the industry for their dedication to reducing their environmental impact. From the packaging (or lack thereof) of their products, to the natural ingredients, Lush is changing the game. Many of their products are merchandised with the fresh ingredients to further drive home the freshness of the product. Many other brands are following the natural trend as well, from Sephora’s “Clean at Sephora” seal, to Nordstrom’s dedicated natural beauty section in stores and online.

Experience Beauty: Technology is a trend throughout retail, but the experiential aspect of beauty lends itself particularly well to emerging technologies. Sephora stood out from other retailers for their thoughtful integration. Sephora’s brand reputation as innovators and disruptors in the industry brings with it the expectation of new experiences. Using AR, the brand is able to match their customer’s skin to the perfect foundation through their Color IQ tool, and AR allows the customer to virtually try on products through the Sephora Visual Artist tool. During beauty consultations, associates can recommend products to their customers and measure their Color IQ number, and attach this information to the customer’s profile for future purchases. Additionally, Sephora is using in-store tablets to interact with customers. One of these tablets is dedicated to the company’s “Fragrance Personality Quiz,” matching customers’ preferences to fragrances.

Try Me: Beauty is also extremely trial-based and, given the overwhelming number of options of products, consumers flock to physical stores to try before they buy. At all of the retailers visited, there was a strong emphasis on trials and samples. L’Occitane adds samples of products to your bag when you checkout. Many retailers, Lush, Ulta, and Urban Outfitters included, offer testers in-store. Sephora and Nordstrom stand by the promise that you can ask for free samples of most anything in the beauty department.

Full-Service: Ulta and Sephora are pushing the typical boundaries of retail by offering added services, which helps to foster a community between their customers and the brand. Ulta offers a full-service salon at each of their stores, providing customers a one-stop shop for both products and services. Notably, salon customers spend almost three times as much as the regular Ulta customer (Mintel Beauty Retailing). Sephora, while not offering a salon, does offer the services of beauty consultations, workshops, and events. Their newest experience is Sephoria- an immersive two-day event to celebrate the company’s twentieth anniversary in the U.S.

Beautiful Brands: Finally, beauty offers the opportunity for more branded displays at retail than in other categories, which makes sense given much of beauty is brand driven. Ulta has some brands that have a dedicated, “pop-up” like space, like Benefit and MAC. In Nordstrom, brands like Jo Malone customized their displays, contrasting from lower-priced brands, such as Mario Badescu, who’s only branding was the name plate at the top of the shelf. Sephora, by contrast, allows brands to truly own their space. If it is just a shelf, they can put their own display on it. If they own a case, that case can be fully branded.

Theory House is always searching for the newest innovations and trends in retail. The beauty category is thriving, and we are excited to see what these retailers achieve next.

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