LOS ANGELES — Middle American beauty consumers share their coastal peers’ appetite for high-end cosmetics and skin care merchandise at easily accessible locations — but they’ve been offered little to satisfy it.
Beauty Brands, a 52-unit chain known principally for salon products and services, senses an opportunity to become their beauty destination of choice. The retailer is rolling out a concept called “the studio” by converting 25 percent of its existing retail space — typically amounting to 750 to 1,200 square feet — to spotlight prestige cosmetics and skin care brands. Beauty Brands stores average 5,000 to 8,000 square feet and are estimated by industry sources to generate about $2 million per store. The firm operates in 11 states and competes against retailers including Sally Beauty, BeautyFirst/PureBeauty, Ulta and salons.
Within the last month, Beauty Brands has installed “the studio” in four stores in Kansas City, where it is headquartered, to closely watch the concept’s progress. In about six weeks, president David Bernstein said Beauty Brands will start erecting “the studio” in additional locations, and he anticipates it could blanket the chain by the second quarter of next year. The chain is privately owned by the Bernstein family and was founded by Bernstein’s father, Robert.
About a year ago, Bernstein explained that customer analysis led Beauty Brands to conclude the retailer had an opportunity to capitalize on a desire for an all-inclusive beauty destination. In one survey, for example, 91 percent of those interviewed reported they would buy prestige skin care and cosmetics at Beauty Brands.
“They told us, ‘We would love to buy our cosmetics and skin care here if you offer the type of brands with the type of education that we need,’” said Bernstein of what customers relayed. “We have some very loyal clients, and they love the convenience of our locations. They love the experience from a customer service standpoint. They had a desire to purchase there through all the [categories].”
Last July, Beauty Brands brought former Sephora divisional merchandising manager for color, Tara Simon, on board to be the merchandising and supply chain vice president responsible for reeling in brands to participate in “the studio.” She set out to tailor the assortment for Beauty Brands’ average customers: 35- to 45-year-old educated women who don’t frequent Sephora or Ulta for cosmetics and skin care, and largely buy their prestige beauty items at malls — but aren’t enthralled with them.
Simon avoided the priciest brands with widespread department store availability. She targeted brands that shoppers were aware of — either through media mentions or word-of-mouth — but had trouble finding nearby.
The brands in “the studio” at the outset are Philosophy, Smashbox, DuWop, Stila, Tarte, Murad, Dermalogica, theBalm, AmazingCosmetics, Japonesque, Anastasia Beverly Hills, Too Faced, Glominerals, Peter Thomas Roth, Perfekt Beauty, Korres, Perricone MD and Beauty Blender. Two to three beauty specialists, who are required to have at least three years of beauty experience, cater to customers at “the studio.”
“There are those that do a terrific job of that and have the infrastructure to nurture and help grow indie brands, but that is not what we are doing,” said Simon. “Nobody in the middle of the country has ever heard of those brands.” She added that the lineups from each brand are limited to 6-foot fixtures or smaller and are edited to focus on the heavy hitters. Preferred Display Inc. made the fixtures and Interbrand Design Forum designed “the studio” format.
Marissa Shipman, chief executive officer of San Francisco-based theBalm, called “the studio” a “neat concept.”
“We are in good company,” she said of the brands, adding, “I feel comfortable with their management team.”
Jerry Wenker, Dermalogica’s president and chief operating officer, described “the studio” as a “great model” for busy shoppers who’d like to be educated about skin care, but don’t have an hour or so to visit an aesthetician for a facial. “More and more consumers have the need for a professional skin care consultation, but their time is squeezed,” he said. “Beauty Brands really understands that you have to engage the customer.”
Rose Fernandez, director of national accounts at Murad, commended Beauty Brands for providing a tight collection of skin care brands at “the studio.” “They wanted to define their assortment so when their client walked in there was a clear point of difference between the brands,” she said. “Do I think that this will create some buzz and impact the business positively? Absolutely.”
Simon said “the studio” is already performing above expectations during its limited pilot run. The average transaction at the four Kansas City stores with the concept has skyrocketed 145 percent. Sales of Too Faced and Dermalogica, both of which Beauty Brands carried before “the studio,” have increased 120 percent and 150 percent, respectively. Once the concept is established across Beauty Brands, it’s projected that cosmetics and skin would make up nearly a quarter of sales, up from the single digits today.
“Beauty Brands is growing up,” said Simon of the chain, which has plans to double its store count to around 100 in 2013.