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wslstrategic · 7 years ago

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“...The struggle that department stores have had is not where beauty is [located], but where the shopper is. The assumption they’re making is that the shopper is in the store, and I’m not convinced of this.” - Wendy Liebman, CEO of WSL

By Ellen Thomas on August 17, 2017 | WWD

Eight-hundred products from 30 brands are going into a Millennial-targeted beauty department, located on the retailer’s contemporary floor.

Does Bloomingdale’s hold the master plan to bring Millennials back to department store beauty counters?

Not quite — instead, the retailer is bringing beauty to the selfie generation on their own turf.

On Aug. 30, Bloomingdale’s will unveil Glowhaus, a beauty department loaded with hot niche brands, on the contemporary floor of five of its locations. Aimed squarely at Millennials, Glowhaus is an open-sell concept featuring a vast array of 800 products, all priced at under $100, from some 30 brands sooner seen on social media than in a conventional department store. Some, like The Vamp Stamp — an influencer-endorsed tool for creating intricate winged eyeliner looks, that was until now sold only direct-to-consumer — have never even seen the inside of one.

Outposts are set for SoHo and Roosevelt Field in New York, and San Francisco, South Coast Plaza and Sherman Oaks in California. In each location, the bright poppy-red-and-white-fixtured Glowhaus will live on the contemporary floor, adjacent to denim and clothing brands such as Maje and The Kooples. The 400-square-foot spaces, designed with the Bloomingdale’s store design team in conjunction with New York-based firm RPG, are equipped with iPads to demonstrate trends and get-the-look content using products sold within Glowhaus. Long tables serve as testing stations with room for shoppers to spread out and play with the assortment before buying.

Glowhaus isn’t just an in-store play — a digital hub will be home to exclusive content and imagery meant to serve up Instagram-style visual inspiration.

“We have an opportunity to attract not only our current [beauty] customer, but a [beauty] customer who is not shopping with us today,” said Stacie Borteck, vice president and divisional merchandise manager of cosmetics at Bloomingdale’s. “With the rise of niche, socially born brands, it became clear to us that we needed to carve out a new space and think differently — to create a sort of incubator.”

Bloomingdale’s is launching Glowhaus at a time of increasingly intense competition from specialty beauty retail — Ulta Beauty is homing in on 1,000 doors, with its first Manhattan location set to open on East 86th Street this fall. Sephora is ramping up its experiential offerings, and just opened an 11, 300-square-foot store on 34th Street that serves as an interactive hub and holds the retailer’s largest in-store product assortment to date.

“There’s a logic to combining the whole offer [beauty and fashion], but this is assuming she [the Millennial shopper] is on the contemporary floor. The struggle that department stores have had is not where beauty is [located], but where the shopper is. The assumption they’re making is that the shopper is in the store, and I’m not convinced of this.” - Wendy Liebmann, CEO of WSL

The concept of beauty shops-in-shop is not new — since plunking down $210 million in cash to acquire Bluemercury in 2015, Macy’s has been rolling out locations of the upscale specialty retailer inside its own stores. And Bloomingdale’s itself has housed Space NK shops-in-shop on its first floor beauty departments since 2008. Saks Fifth Avenue earlier this year opened The Wellery pop-up in its Manhattan flagship, a 16,000-square foot wellness-focused experiential concept space housing 22 individual brands. But Glowhaus is the first beauty-specific Millennial play that is both brick-and-mortar, digital and outside the beauty department.

Is it enough to revive the department store beauty business?

“There is a bigger story here,” said Wendy Liebmann, chief executive officer of WSL Strategic Retail. “There’s a logic to combining the whole offer [beauty and fashion], but this is assuming she [the Millennial shopper] is on the contemporary floor. The struggle that department stores have had is not where beauty is [located], but where the shopper is. The assumption they’re making is that the shopper is in the store, and I’m not convinced of this.”

Liebmann stressed that the right assortment of brands coupled with a strong digital component will be necessary to make a concept like Glowhaus work. “Are these brands so compelling that someone who isn’t on this floor buying fashion is going to come to Glowhaus instead of Sephora to buy them?” she questioned. “[Digital] is essential in brand and relationship building…specialty beauty is easy because it’s on the first floor, the main street…to think [an in-store experience only] is going to be the solution for building this level of Millennial beauty enthusiasm would be a false assumption.”

To merchandise Glowhaus, Bloomingdale’s flipped the switch on its traditional buying methods — for the most part, bypassing the beauty behemoths in favor of sweeping Instagram for the latest buzz-inducing Indie labels.

“Our buyers scoured the market and social media, a new aspect [for us],” Borteck said. “We wanted to make sure we had a mix of product and brands and a combination of trends we’re seeing in the market.”

The approximately 30 makeup and skin-care brands sold at Glowhaus fall mainly into three key trend categories — clean beauty, the no-makeup makeup look and the glitter and metallic-heavy Instagram makeup trend.

Bloomingdale’s worked with a sizable online focus group consisting solely of Millennial-age consumers already shopping with the retailer to whittle the product focus down to these three key trends.

“We wanted to co-brand the space with our customers, and the decisions we made were [based on] everything we heard,” Borteck said.

Makeup brands include Cover FX, Lash Star, Lime Crime, Winky Lux, Suva Beauty, Nudestix, Kosas, The BrowGal, Context Skin and RMS Beauty — of that list, the last four also cross over into the natural beauty category.

In skin care, the assortment includes Frank Body, Grown Alchemist, Supergoop and Mario Badescu — the latter, a heritage brand, is gaining a renewed cult following amongst skin-care bloggers for its affordability factor and availability in younger-skewing retailers such as Urban Outfitters.

Brands from the big beauty giants one would expect to find downstairs at the counters have minimal representation at Glowhaus — from The Esteé Lauder Cos. Inc, only Glamglow and Flirt are represented.

Tools are another category Glowhaus hits on, with offerings from Beautyblender and Sigma Beauty, an Indie brush company with an often sold-out silicone glove made for brush-cleaning.

“There are certain categories [that will stand out],” said Borteck of potential bestsellers. “Customizable complexion [products] will be really good, natural from color brands — which is being perfected on the market [now] — will be a standout, as well as hybrid makeup-skin products and certainly masks.”

By placing Glowhaus on the contemporary floor, side-by-side with Millennial-targeted clothing lines, Bloomindale’s is aiming to capture a shopper who may be zipping up the escalator straight past first-floor beauty counters. “We have a large number of Millennial customers who do shop with us, but we see an opportunity to sell to customers shopping in ready-to-wear zones and aren’t spending as much time in beauty as we’d hope,” Borteck said.

“It’s going to be a fresh approach to shopping in a department store and it’s targeting the right consumer…it’s really offering the consumer your product where she’s shopping, [because] Bloomingdale’s has a very strong ready-to-wear contemporary base,” said Sharon Collier, ceo of Cover FX. Collier admitted that she hasn’t been focused on department store distribution in the U.S. — Cover FX was exclusive at Sephora until earlier this year when it entered Ulta Beauty.

Bloomingdale’s doesn’t necessarily have a Millennial shopper problem, said retail analyst Jane Hali. But like other American department stores, those Millennials are bypassing the beauty counters. Even as multibrand shop-in-shop concepts such as Bluemercury in Macy’s — and even the Space NK shops situated in Bloomingdale’s beauty departments — aim to lure specialty beauty shoppers, the fact that Millennials are dodging big-box beauty departments altogether is still an issue that must be addressed.

“The Millennial customer is separate from the Chanel customer, and you immediately feel that in the beauty department — the Millennial customer is passing over the cosmetics floor and shopping the denim brands and the new French and British brands [on the contemporary floor],” said Hali, ceo of Jane Hali and Associates. “All those counters immediately separate [the customer], they say ‘Don’t touch’ and you get pressured selling.”

The traditional heritage brands that operate via the counter format are also part of the problem.

“These are brands younger people can relate to,” said Rose-Marie Swift, ceo and founder of RMS Beauty, of the Glowhaus assortment. “These young Millennials want their own thing — they can’t relate to these big brands.”

For niche brands like Swift’s model-endorsed, clean beauty line, the counter format has been a deterrent in signing on for department store distribution. But Glowhaus is already proving to be a compelling test for brands looking to try out the traditional model in a Millennial-friendly format — and away from the traditional brands.

“The customer is just different now,” said Natalie Mackey, ceo of Glow Concept, which makes Winky Lux, a brand whose customer indexes heavily Gen Z. “She’s still shopping in stores…she might be discovering in a different way, but she’s still desiring a bit of touch and feel…[but] she wants more of a high-low [assortment], and an experience as opposed to just seeing the same 15 brands and they’re all super-expensive,” Mackey said.

Going into Glowhaus is Winky Lux’s best-selling Flower Balm, a lip balm that contains a tiny dried flower inside of it.

Flower Balm will be stocked in the “Grab-and-Glow” section along with other items Borteck described as “novelty” — fun, visually driven products that are trending on social media. The Grab-and-Glow section, Borteck said, is another way for Glowhaus to rotate in and out products that are trending.

A common theme between brands and analysts was the need for Bloomingdale’s to make a substantial marketing push in order to get Glowhaus off the ground.

“They’re the big guys,” Swift said. “I’m not Lady Gaga, where I get my products into the store and I get a huge following.”

To kick off Glowhaus, Bloomingdale’s is taking an activational cue from interactive experiences like music festivals and Beautycon. Glowhaus will offer up influencer meet-ups and in-store events. (Its first, slated for September, will offer a series of treatments from different brands.)

These types of events could lead to a whole new subset of customers for Bloomingdale’s. “If they do in-person influencer meet-ups with people Millennials actually care about…they’ll get lots of new customers who might be shopping there for the very first time,” said Mackey, whose own brand routinely holds sizable influencer meet-ups in New York — the next one, called the Unicorn Carnival, will take place on Coney Island, N.Y., in September.

Borteck would not speak to concrete expansion plans for Glowhaus, but did hint at more plans for future outposts. “We certainly feel that this opportunity exists in many of our stores — there’s opportunity for it to grow.”

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