CVS is boldly breaking out of the traditional mass market drugstore beauty mold. The retailer offers a glimpse into the future of its beauty footprint in four pilot stores with a shop-in-shop format called BeautyIRL.
The new area — offering everything from express services in an exclusive retail partnership with Glamsquad to brand boutiques instead of the traditional cosmetics wall — will be tested and rolled out to more stores in 2019. There are also 30 brands not often found in mass market venues. There are two BeautyIRL’s in Florida, one in Connecticut and one in Massachusetts.
At a time when CVS is deepening its commitment to health care with its pending acquisition of Aetna, the retailer makes it clear beauty fits into its blueprint for growth.
“We are making investments in our front store to enhance the customer experience within health and beauty,” said Maly Bernstein, vice president, beauty and personal care for CVS Health. “As one of the largest beauty retailers in the country, we understand that consumers see beauty as part of their self-care routine, which is connected to their overall health and well-being.”
She describes the look as a playground developed for “guilt-free, stress-free me time,” especially since many customers are stopping into the store for prescriptions or to take care of others. Borrowing cues from pop-ups, the beauty department is fine-tuned to appeal to younger customers, many of whom have turned away from drugstores in favor of online or specialty stores. Nielsen data for the 52-week period ended Aug. 11 shows mass makeup and nail sales flat, with fragrance volume off 4 percent. The only growth areas were skin care at 5 percent and hair care climbing 1 percent.
Bernstein said efforts at CVS helped the retailer buck that trend. “This year our beauty business is growing faster than the market, gaining share across nearly all of our beauty categories.” Beauty is an avenue to connect to Millennials and Gen Z, she added. “The BeautyIRL format gives us an opportunity to interact and connect in a way that’s relevant and impactful for all beauty customers. We are also looking for ways to engage with new, emerging brands with a strong social community so that we can make them even more accessible to beauty enthusiasts nationwide.”
To accomplish that, CVS discarded the traditional notions of mass beauty retailing — lackluster rows of pegged items void of testers and service — with a reworked model.
Space in BeautyIRL is one-and-a-half times larger than traditional CVS beauty floors. The additional footage, culled from general and seasonal merchandise areas, allows for CVS to double down in beauty. Results from an elevated store experience in the past produced a 2.5 percent increase in sales. The latest embellishments could double gains, industry sources said. CVS would not comment on projections.
But the company said it believes it has the formula for what pulls shoppers into stores. “In today’s rapidly evolving beauty retail landscape, customers want three things: brands, experience and service. These stores deliver more inspiring, interactive in-store experiences. While designing the BeautyIRL stores, we thought about the fact that 67 percent of customers rely on recommendations when making a beauty purchase,” said Bernstein.
In order to check off one of those boxes — experience — CVS is making a splash with an investment in Glamsquad. (Terms of the deal were not disclosed.)
“We will offer Glamsquad Express Services, which will include an express blowout, dry styling and braids, a 30-minute makeup refresher, skin-care services including eye, lip and face masks, and in some stores, we are testing manicures,” said Glamsquad chief executive officer Amy Shecter. “Our approach was to launch with two service models to see what works best for customers. One is a walk-in service model and the other is an on-demand ‘book in advance’ digital option. We will evolve the services offered based on customer response. The Express Services will range from $30 to $45.” The CVS deal brings to live a plan Shecter outlined last year to take the on-demand model into retail.
The area is set off with mirrors and plush chairs. Hours will vary by location according to peak demand. Glamsquad expects dry styling and makeup touch-up services will drive sales, but also expects eye masks and faux lash applications could build, especially as consumers wait for a prescription. The CVS team of Glamsquad experts consists of the same Beauty Pros booking at-home appointments who have undergone a variety of digital courses, protocol sessions and in-person technical assessments.
Glamsquad affords CVS the chance to tap into its expertise and capabilities to create beauty services and experiences for its customers — both through walk-in services and book in advance digital options. CVS shoppers have the ability to get personalized access to professional makeup artists for beauty expertise and product recommendations. “It’s a tremendous opportunity for us to deliver an omnichannel service experience to customers,” Bernstein said.
For Glamsquad, CVS represents a partner to help provide accelerated growth beyond its expansion strategy, according to Shecter. “We connected with CVS last year and quickly realized that we had a similar point of view around the future of how consumers engage with beauty services and products. Our discussions led to CVS making an investment in Glamsquad and we created a strategic partnership. This investment instantly extends the Glamsquad community and creates a connected beauty experience that transcends everything that exists in the market today. Our focus will be on new market growth with the expansion into CVS BeautyIRL stores,” she said.
In addition to Glamsquad services, the beauty department stretches beyond the mass norm. For one thing, to help national brands stand out amidst budding indies, CVS created specialty boutiques for each brand along with areas to sample launches.
There is a “Wonder Wall” addressing demand for mini products. Here customers create their own mix of fun travel-sized products with a gift-with-purchase cosmetics bag. For $5, $10 or $15, shoppers can fill appropriately sized bags with items selected from 168 choices from 60 brands. CVS officials said minis are “hot right now,” for travel or gifts. The product assortment includes DaBomb Bath Fizz, Formula 10.0.6, Frudia, JiiNju and Hask.
A new “#NowTrending” wall highlights socially relevant brands. “We wanted to create a destination in-store where customers can discover and test these brands themselves. On the wall, and throughout the new BeautyIRL stores, you’ll see new brands like StoryBook, Zoella, Karity, Zum, Doll Face and other indie brands we have introduced across our national footprint like Peri Pera, Crème Shoppe and Wunder2.” There are 30 brands getting a road test in the new format.
CVS also continues to invest in K-beauty — the retailer is said to be the largest purveyor of K-beauty items in the U.S. — with an ongoing relationship with Peach and Lily/Peach Slices founder Alicia Yoon. The four test stores feature the store-within-a-store concept launched in two doors in Manhattan.
Seizing opportunities in bath, CVS has a bath cart loaded with bath bombs and other luxuries. “Taking ideas from outside of beauty, we have a carnival cart of bath bombs, a newsstand of K-beauty facial masks and hanging K-beauty hand creams inspired by hanging paint tubes,” Bernstein said.
As far as service, CVS is tackling a major hurdle in the mass market — a lack of testers. To encourage trial, there will be testers throughout the department along with hygiene bars featuring micellar water, mirrors and cotton rounds to inspire experimentation. CVS Beauty Consultants staff these locations and are trained to ensure testers remain clean and hygienic.
One brand executive who has seen one of the stores in Fort Lauderdale, Fla., said: “There is big real estate devoted to beauty. This could be real competition for Ulta,” he said.
The dramatic departure from the status quo is the latest in a string of moves from CVS. Earlier this year, the retailer shook things up by announcing it would no longer alter images of beauty collateral. That was followed by its largest beauty marketing campaign called Beautyin Real Life, which blitzed the market via television, print, digital, social and billboard advertising to highlight the retailer’s commitment to creating new standards for beauty imagery. The goal is to nurture an authentic and more realistic standard of beauty to its customers.
Additionally, CVS has been a trailblazer in adding brands including K-beauty and first-to-market launches for three years. ESalon, in fact, chose CVS as its first physical store location. That’s being expanded in the test stores with custom color on-demand Hair Color Mixing Station from eSalon. A few other unique features include an accessories shop of on-trend jewelry, accessories and bags.
“Overall, it’s an incredibly exciting time in beauty — giving retailers, like CVS Pharmacy, a way to revolutionize the in-store beauty experience. Because of social influence, the beauty customer has rapidly evolving expectations of what they want to experience in-store and meeting those customer expectations is at the very heart of the BeautyIRL store design,” Bernstein said.