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What to Watch Beauty: Brick-and-Mortar Retailers Step Up Their Game

Specialty to monobrand retailers are upping their store counts.

Can Ulta Beauty duplicate its magic in a city loaded with beauty options?

The retailer — and its competitors — is about to find out with Ulta Beauty’s debut in Manhattan. Sources indicate the store will open in October or November, and brands said they are working on new launches and presentations for the Upper East Side store at 184 East 86th Street.

Not that the competition is standing still. Sephora and Bluemercury already are offering technology-rich new formats while there are stepped up efforts at department stores. Coming to Bloomingdale’s contemporary floor is Glowhaus, a new beauty department that will carry 26 Millennial-minded brands, including Winky Lux, Sigma Beauty, Frank Body and Beautyblender. Also on the Millennial front, Forever 21 plans to open 10 of its Riley Rose beauty stores, though sources indicate the locations will mostly be scattered throughout California. Traditional Forever 21 stores already have an ample array of whimsical and well-priced beauty items such as K-beauty masks, a sweeping in-house line of beauty tools and a selection of E.l.f. products.

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The new Blue Mercury store in New York.
The new Bluemercury flagship in New York. George Chinsee/WWD

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Elsewhere in the U.S., more monobrand retailers will expand their store count in the months to come, especially E.l.f. and NYX, which are beginning to compete head-to-head. At the Menlo Park Mall in Edison, N.J., only one storefront separates the two high-tech and on-trend beauty competitors. NYX has 37 freestanding stores and E.l.f. operates 20.

According to research from Kline, vertically integrated stores have shown a compound annual growth rate of nearly 19 percent over the past five years and account for 20 percent of total beauty market sales.

To compete, big-box players and drugstores look to fixtures and technology to enrich the shopping experience in mostly self-service stores. Wal-Mart has a sparkling new design with white fixtures and the addition of iPads to assist shoppers in select doors. Walgreens is overhauling as many as 3,000 stores to feature its company-owned power brands such as No. 7 and Soap & Glory. CVS is supercharging its merchandise mix with exclusives such as Makeup Academy, Wunderbrow and 100 K-beauty items. To help shoppers spot new products, stores are getting a special Trend Wall.

According to Kline research, e-commerce beauty sales have posted almost a 21 percent compound annual growth rate from 2011 to 2016. This fall will be prime time for brick-and-mortar merchants to unfurl some of their strongest ammunition against online contenders as the holiday season looms. Retailers said they’ll focus on in-store experiences that can’t be duplicated on a smartphone or tablet.