Consumers are visiting stores less, but they are signing up as members of private online sale sites by the millions, and beauty firms have noticed.
This story first appeared in the January 29, 2010 issue of WWD. Subscribe Today.
In the last year, the major sites — namely Gilt, Rue La La, Ideeli and HauteLook — have begun steadily building their beauty offering with a host of smaller brands. So far, none of the major beauty brands have been spotted on the sites.
Beauty-only sites also have surfaced, including Market For Drama, The Skinny, The Fairest and BeautyTicket.com. The pull of the sites has been particularly strong in the tough economic climate, when companies are burdened with excess inventory and crimped retail sales. The spoils of the sites also are alluring. Industry sources estimate a beauty brand can move thousands of units — or roughly $50,000 to $60,000 — over two to three days, the average length of a sale. Beauty brands that have already dabbled in the online sale sites, which discount up to 80 percent in some cases, include Smashbox Cosmetics, Perricone MD Cosmeceuticals, Clairsonic, M Labs skin care, Tarte cosmetics and Lisa Hoffman Skincare. But it’s not a sales strategy supported by all in the industry.Richard Murad, general manager of the skin care brand Murad, said, “We can’t see any justification in giving special pricing to online sale site companies that have not supported Murad over the years to basically compete with our existing customer base.”