Los Gatos, Calif. — Masstige is getting its biggest beauty test yet.
Walgreens Co. is exporting Duane Reade’s Look Boutique from New York to its locations throughout the country. After vetting the two-year-old Duane Reade concept since acquiring the metro New York drugstore chain last year, Walgreens is confident Look’s recipe for injecting the drugstore environment with upscale brands will translate outside New York everywhere from suburban West Coast enclaves such as Los Gatos and San Carlos, Calif., to cities across the South and East Coast such as Houston and Miami.
Walgreens is second only to Wal-Mart in U.S. beauty sales with 7,760 stores and covers the country so densely that 80 percent of Americans live within five miles of one of its locations. Walgreens should have the geographic and marketing muscle to drive customers to prestige brands within its doors, but other retailers have achieved only mixed results in past attempts. The challenge is to convince customers accustomed to shopping for mass beauty brands to open up their wallets for pricier, often-unfamiliar labels. It also requires shoppers to begin recognizing the drugstore as a destination that rivals department stores for upscale beauty.
Despite having the power of convenience to propel customers of all stripes to visit drugstores, taming the masstige monster hasn’t been the easiest task, as CVS Pharmacy can attest. The Walgreens competitor introduced Beauty 360 in 2008 with much promise, but rollout plans that initially called for 100 units to open within the first year and 500 to 1,000 stores long term have apparently stalled, judging from the lack of openings this year. Canada’s Shoppers Drug Mart’s masstige format, Beauty Boutique, is often pointed to as a successful model and has spread to more than 270 locations, which have been embraced by department store brands like Clinique, Clarins and Lancôme since launching in 2003. Ulta has thrived too, with a combination of salon, prestige and mass brands on its shelves. But its repositioning took the better part of a decade.
Walgreens executives believe that the Look Boutique made the grade in New York and, if it is selective about future Look locations, the new units will work nationwide. “We know that customers are loyal to certain brands, and it is hard to switch them, but giving them an option to try something new and different is what this is all about,” said Shannon Petree, Walgreens’ vice president and general merchandise manager for beauty and personal care, during a tour of the beauty assortment at Walgreens’ Los Gatos store.
She also pointed out the boutiques are open seven days a week and no consultations are required with makeup artists or doctors. “That’s what this was created for,” she said.
Walgreens honed the layout and design of Look Boutiques for over nine months — looking beyond New York — and identified Walgreens stores amenable to the Look concept. At the 16,000-square-foot Los Gatos store, beauty constitutes a total of 3,000 square feet, about 1,500 square feet of which is dedicated to classic mass beauty brands with Revlon, Maybelline, L’Oréal and more. The remaining 1,500 square feet of the total is dedicated to the Look Boutique in a typical footprint. Based upon Duane Reade’s experience in New York, Petree said the boutique in Los Gatos would have a “significant impact to total front-end sales.” She continued, “the skin care would be your number-one sales growth in percentage and in dollars for this particular store. It won’t do more than pharmacy, but it is a good solid business.”
Los Gatos, which has a population of 31,000 and is perched on the edge of Silicon Valley, is one of the most affluent towns in the nation with an average household income topping $210,000. At their local Walgreens, Petree said, Los Gatos residents tend to be “high beauty spenders.” She added, “when we were looking across the U.S., we wanted to see areas that had very high opportunity with selling beauty products. This particular market stood out, along with Houston, for being unique in the way the customer patterns and sales patterns are within beauty,” she said.
Petree wouldn’t divulge the number of Walgreens destined for Look Boutiques, but indicated that the format wouldn’t be appropriate for most Walgreens doors. “This would be within a whole group of stores that customers can still drive to very easily within five, 10 miles from their home store…If it proves to be successful, we know the right pockets that this could expand to and how quickly we could get them up and running,” she said, noting it takes no longer than three months to outfit a store with a Look Boutique. In Manhattan, Duane Reade already has roughly 25 Look Boutique locations and could double that count next year. Of Look’s expansion beyond New York, one source said, “It is supposedly more aggressive than that.” Another said Walgreens could open 15 Look locations across the country within the next few months. There is also a report of a possible flagship project for the Trump International Hotel & Tower in Chicago, but Walgreens wouldn’t confirm it.
The Look Boutique in Los Gatos contains about 90 percent of the beauty selection found at Duane Reade’s boutiques in New York, according to Petree. The cosmetics brands include Pop Beauty, Becca, ‘Tini Beauty, Vera Moore and Pür Minerals, and the skin care brands include Kinerase, Klorane, Lierac, Vichy, Avène, La Roche-Posay, Osmotics, MyChelle Dermaceuticals, Nuxe and -417. Although there are Ramy brow services for $30, space constraints at the Look Boutique in Los Gatos prevent it from providing the broad array of services that Duane Reade offers at its 40 Wall Street flagship store in Manhattan that extend to scalp and hair analysis, blowouts and manicures.
Drugstores have been gradually building their beauty market share over the years — inching up from 13.3 percent in 2005 to 14.1 percent last year, compared to department stores’ dip to 14.3 percent from 16.3 percent during the same period, according to research firm Euromonitor International. Petree thinks Look Boutique will siphon off department store beauty shoppers. Corinne Mitcham, a beauty adviser who started in the original boutique in Duane Reade’s Herald Square store and was on hand in Los Gatos to train her counterparts, said, “I notice that we do get quite a few of Macy’s customers coming over and most of them come because they like the European brands, so they are excited about it, and they like our personalized service.”
Petree isn’t shy about wanting department store beauty brands to join Look. “We would love the opportunity to have those traditional department store brands be part of our portfolio some day when they are ready,” she said. “We understand their position, and we are giving them a chance to see the type of environment that we are creating.”
Executives from beauty brands are enthusiastic about the boutique’s prospects outside of New York. In Los Gatos, Moty Fridman, founder of -417, an Israeli skin care brand, said, “Here they are so happy to buy the skin care in the same shop that they buy all their other things, but still have a unique atmosphere where they can buy unique brands.” So far, he mentioned he didn’t detect resistance to -417’s priciest products, notably the $92 Miracle Immediate Wrinkle Filler.
Andrew Knox, president and chief operating officer of Pop Beauty, said that Look customers have been shopping his products, even when mass brands have lower-priced equivalents. He singled out the performance of Pop Beauty’s $18.50 mascara, which is its fifth bestselling product at Look.
“They are slowly rolling it out, building momentum and hitting affluent communities first. I think they are doing it right,” said Michelle Toma Olson, founder of ‘Tini Beauty. “I think the whole hybrid masstige platform is gaining a lot of traction and credibility. Having a retailer as powerful as Walgreens [that is] so recognizable and with such marketing strength, I think it is going to really bring us to the European model of pharmacies, where you have everything you need under one roof.”
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye