Lubricants next to La Mer? Spin class with a side of YSL Beauté?
As Sephora and Ulta Beauty duke it out for dominance in the specialty beauty retail channel, department stores are increasingly devoting more time, space and money to wellness in a bid to differentiate themselves and increase their relevance with much coveted younger shoppers.
The shift comes at a critical time for department stores, whose market share in many key areas of beauty has been eroding for the last several years. COVID-19 exacerbated many of the issues, forcing stores to finally close underproducing locations and beef up their e-commerce businesses. Creating a differentiated product offering and experience, both online and in the stores that remain, has become a mandate — and new categories like fitness, sexual health and inner beauty are playing a key role.
“There has been, over the last years, this massive shift in interest in health, well-being, wellness,” said Wendy Liebmann, founder and chief executive officer of WSL Strategic Retail. “We’ve seen the growing interest in all our research for the last five years.”
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Opportunity in retail lies with the higher income and younger shoppers, who are particularly interested in spending around wellness, she continued. “The department stores have to look at what’s of critical interest now for their targeted shoppers. They were really not taking full advantage of the lifestyle shifts.
“Relevance is a big issue for department stores,” said Liebmann. “How many of them do we need? How many of them do shoppers want? So many macro factors have been just eroding the department store business for a long time…They need to create a reason for people to come beyond just an occasion for the sale.”
Services, for example, “can bring people into the store with more regularity,” she went on. “But I do think it’s not just about the physical store. It’s about how can I get people to spend more with me? And if I think about the whole lifestyle that people are looking to have now, particularly moving to and hopefully at some point out of COVID-19, this is a really big growth opportunity in general in the marketplace. It’s not exclusively about putting something in the store. It is also about digital. It’s also about communication and branding. It really needs to be a more substantial and continuing strategy around serving the lifestyle needs of the shopper today.”
That thinking is taking retailers into new territories. Saks Fifth Avenue — now operating as separate e-commerce and brick-and-mortar companies — launched a digital wellness shop on saks.com this month. Found under the newly added “wellness” category at the very top of the homepage (listed alongside options like clothing, beauty and home), the drop-down menu includes “fitness,” “health & nutrition,” “rest & relaxation” and “sexual wellness.”
“Saks is always evolving to meet our customers when and where they want to shop,” said Tracy Margolies, chief merchandising officer at Saks, in a statement. “We broadened our wellness portfolio to address the growing interest in health and well-being from our consumers. With the expansion of our wellness assortment, we can now provide our customers with the very best merchandise, not only in luxury fashion, but also for a mindful, healthy lifestyle.”
“One of the things that we saw as a big opportunity was to take wellness beyond just identifying beauty products as wellness products and look to develop a more robust offering,” added Kate Oldham, senior vice president and general merchandise manager of beauty, jewelry and home at Saks Fifth Avenue.
With over 1,000 products and 50 new brands, the online wellness shop combines categories and goods — traditionally merchandised separately — dedicated to self-care. So far, among the consumers that are shopping wellness, about 25 percent are new customers to Saks.
“Rest and relaxation is a big piece of it,” Oldham said. “Because, as you know, we read every day more and more about, ‘How do we relax when we’re so stressed out? How do we get our best sleep’? And we really brought in products that fit those categories.”
The section (currently a “favorite” with the highest traffic, according to Oldham, “with new customers penetrating around 30 percent”) provides bath products like body oils with a range of home goods, apparel and accessories including aroma diffusers, humidifiers and sound machines, as well as weighted robes, slippers, silk sleep masks, acupressure pillows and swinging daybeds. Prices range from $9.99 for a six-piece “Call It a Night” sheet mask by Foreo to $995 for a PEMF technology-powered mat by Higherdose.
“We felt that this approach was much more about having a balance in your life and feeling good not only physically but also mentally,” said Oldham. “We want to help our customers care for themselves beyond just the traditional outer appearance. That was the impetus for us to drive into a more robust wellness offering.”
To showcase some of their new products, Saks has been hosting live digital events. They’ve held fitness classes with celebrity trainer and choreographer Isaac Boots and Zara Terez Tisch of the activewear brand Terez; held online seminars with Imarais, plant-based gummies which promise “hydrated, glowing and plump-looking skin” with cofounders Sommer Ray (the fitness influencer with 26.7 million Instagram followers) and executive Felicia Hershenhorn, and dabbled in energy healing with Yasmin Sewell, founder of Vyrao Fragrance, and Louise Mita, a quantum energist, to discuss crystal charging and “energetic” fragrances.
To date, fitness has done “incredibly well,” as the largest area of product growth, said Oldham, noting an increase in sales of workout equipment like bangle weights and jump ropes.
Fitness is getting a spotlight at Bloomingdale’s, too, which kicked off the new year by partnering with digital fitness platform Obé for a new content series as part of the retailer’s virtual “On Screen” events. The collaboration is also in-store, with Obé signage and QR codes for sign-ups found through the store at Bloomingdale’s, which is also showcasing an Obé window display at its 59th Street flagship in Manhattan.
“Five to seven years ago, activewear for women and for men really started to blow up,” said Elizabeth Miller, vice president and divisional merchandise manager of cosmetics at Bloomingdale’s. The fitness category (along with clean beauty) is where the retailer saw “a big growth in demand,” said Miller. “It became a uniform for customers in a lot of our stores, so that encouraged our ready-to-wear and apparel teams to really go after active…At that same time, we started to invest in the surround of wellness. It just became a macro trend. Everyone was much more interested in exercising, more interested in taking good care of their body, also indulging in things for muscle recovery.”
Bloomingdale’s began selling workout related tools like the Theragun, the handheld massager, while also expanding clean beauty with the “Wellchemist” — a curated beauty assortment found online and in-store. Now, Bloomingdale’s latest focus is on “sexual wellness,” a largely online-only selection (found under “beauty”).
“The ultimate in self-love essentials from our favorite female-led and body-positive brands,” notes the website, offering 43 items that include vibrators, arousal serums, lubricants and body products by the likes of Fur, Maude and Dr. Barbara Sturm (the celebrity dermatologist offers $100 “V Drops” for “the female intimate area, to soothe and hydrate”).
“Just as wellness became more of the culture and such a focus, we’ve seen that sexual wellness and self-love also become more a part of our culture,” said Miller. “Also, the product really evolved and a lot of brands have been coming to market with more elevated, approachable looking products…I would add that it was really an internal suggestion from one of our Gen Z staffers. Gen Z is much more comfortable talking about all these things, exploring all this. At Bloomingdale’s, one of our goals is that we’re a contemporary department store. Contemporary is a mind-set. It’s not an age. But it feels very contemporary to us. It’s cultural. It’s of the zeitgeist.”
Of the “sexual wellness” additions, she added, “Sales really speak nicely for themselves.”
Bloomingdale’s aims to meet consumers where they are today — investing in self-care while largely shopping from home — as are most retailers.
At nordstrom.com, “wellness” can be found under the “beauty” category, with items like silk pillowcases by Slip and body products by Nécessaire. But they also sell both female sexual wellness and menstrual health goods, including Vella’s “Women’s Pleasure Serum with CBD” and Crave’s “Vesper Vibrator Necklace” — yes, both jewelry and a sexual pleasure item — along with organic cotton tampons and pads by Rael. The entire “wellness” section varies in pricing, starting at $4 (feminine cleansing wipes by Rael) and going up to $320 for a “Carat Ray Face & Body Roller” by Refa.
Macy’s strategy has been on unifying gadgets under what it calls “wellness at home” online, bringing together massagers, aromatherapy, men’s grooming, dental care, hair care and air purifiers at different price points. Bergdorf Goodman, meanwhile, is offering highly curated, luxe wellness.
“As my team has been out in market, it can be quite overwhelming to find the right products that are ultimate in luxury, performance and sustainability, and so, we wanted to give our customers a seamless and elevated experience with our BG beauty edit,” said Yumi Shin, Bergdorf Goodman’s chief merchant.
In July of 2021, both online and in its women’s store, the retailer unveiled a special beauty selection. While largely focused on skin care (the likes of Augustinus Bader and 111Skin), it also includes ingestibles and home fragrance. Then, in November, Bergdorf Goodman unveiled its men’s version inside Goodman’s, their men’s store.
“It’s carefully curated by function, including nutrition, sleep improvement and post workout treatment,” said Shin. “We’ve dedicated quite a bit of space to this category.”
Data shows that the bet is well-placed. According to the Global Wellness Institute’s 2021 “Global Wellness Economy” report, wellness grew to be an estimated $4.4 trillion market in 2020. Consumer spending of “personal care & beauty” (categorized as one of wellness’ 11 sectors, which include wellness tourism, mental wellness, physical activity and spas, among others) expanded from $1 trillion in 2017 to $1.1 trillion in 2019, and then declined by 13 percent to $955 billion in 2020 due to the pandemic. However, the sector will “bounce back post-pandemic, with 8.2 percent annual growth through 2025, to reach $1.4 trillion” — making it a growing sector within the global wellness market, which is expected to increase by 9.9 percent annually, reaching $7 trillion by 2025.
“Self-care has been a burgeoning category of business for a long time, and so, especially during COVID-19, when you have a little bit more time, you’re not socializing as much and there’s definitely more stress and anxiety, taking care of yourself has become very important,” said Oldham of upcoming plans at Saks. “For the road ahead, it’s to continue to see what resonates with our customers and what we can build on from there.”
What works well online may soon become an in-person experience, too at Saks. “Online you can move more swiftly, and learn and test things before you roll them out into a big way,” said Oldham. “We’re testing and learning first online, and then we’re going to see how it goes and then we’ll think beyond that.”
It’s a similar sentiment at Bloomingdale’s. “I think, potentially,” said Miller of offering sexual wellness goods inside shops. “We are talking through internally a couple of different ideas of how we could do it in-store.”
She added, “Wellness is only going to continue to grow. It’s still at the forefront of the customer’s mind and when we talk to our customers, we hear that very loud and clear. Everyone’s really invested in being their best selves. ‘How do we stay healthy? How do we live longer?’ And at the same time, ‘how do we also look our best selves?’ As a department store, we will continue to focus on wellness and invest in it really in all areas, across the company.”
Expansion also means rethinking communication, said Michelle Wlazlo, JCPenney’s executive vice president and chief merchandising officer.
The retailer is unveiling its full beauty rollout (which currently includes the Thirteen Lune partnership — an online platform focused on Black and brown-owned beauty products) this fall. The chain (which currently has an “active & wellness” category online for activewear, healthy sleep and eating) is exploring how to restructure wellness merchandise online and in stores, while “addressing the needs of customers that might be more young minded.”
As JCPenney looks to attract new consumers, “the traditional ways of how we thought about communicating, showcasing and selling product is going to have to change,” said Wlazlo, citing the opportunity of introducing wellness goods while showcasing “restful sleep” in the home department, for instance.
“We can have more fun with that,” Wlazlo said. “It is really going to challenge us to think differently, and that’s exciting, because the whole routine of self-care and wellness is beyond any one product category.”