Sears is getting serious about beauty.
This story first appeared in the April 12, 2011 issue of WWD. Subscribe Today.
The retailer said Monday it plans to reenter the beauty arena with full-fledged departments in 100 of its busier stores over the next several months. And while department store beauty is a competitive world, Sears’ move comes just in time according to a number of industry observers who assert the market is ripe for presenting drugstore-type beauty brands in mall anchors.
The new beauty departments began rolling out in March, said one supplier carried within the store-in-store concept; initially the rollout had been planned for January.
The beauty centers stock established drugstore beauty brands such as L’Oréal, Cover Girl, Maybelline, Revlon and Physicians Formula, as well as skin care, fragrance and nail care items. But there are also masstige-type brands such as Ahava, Lumene, Dermalogica, Burt’s Bees and StriVectin, said industry sources. Sears has yet to attract a true prestige beauty brand, but the hire of cosmetics buyer Jerri Koplowitz, formerly of Macy’s, could help the retailer develop relationships with the upscale set.
Each beauty center utilizes red, white and glass fixturing accented by lights, testers, bright signage and a consultant to suggest makeup tips. Displays are raised on a platform, complete with a drawer for overstock underneath. Above the department is a circular red sign that simply reads, “cosmetics.”
“They have done a nice job with what they have to work with,” said one source, noting the centers are located next to the jewelry department. “They are going to be monitoring it and if it goes well they will add another 100 stores next year.” One industry source said Sears expects to outfit 400 stores with the beauty department by the end of 2012. There are 890 full-line Sears-branded stores in the United States and Canada.
In response to research that found women missed buying cosmetics there, in August 2009 Sears circled back into beauty when it opened 13 full-service beauty departments in select malls. According to Sears, the departments were “well received” by customers. Sears has dipped in and out of cosmetics over the years, with the splashiest attempt being its Circle of Beauty private label concept in the late Nineties. The effort was yanked in 2001. Sears also was one of several midtier department stores slated to receive Avon’s retail line BeComing, but the direct seller abandoned the effort in 2003. Sears did not return calls for comment Monday.
What makes the concept somewhat workable, said industry experts, is that since most drugstore chains have moved out of malls, Sears would be one of the few mall-based retailers stocking mass brands.
“That’s exactly what they were aiming for,” said the beauty supplier.
Another vendor said the objective is to develop an exclusive beauty concept in mall-based stores that combines mass, midtier, specialty and prestige brands. The thinking is that having all these tiers under one nameplate would give Sears an advantage over department store anchors. It would also help attract a more youthful shopper, or women 18 to 40 years old.
Tom Winarick, owner of The Strategy Studio, an industry consulting firm specializing in domestic and international retail distribution, said, “You can probably count the number of mall-based drugstores on both hands and feet these days, as freestanding stores have been the direction for the past few years. It will most definitely offer the consumer access to the price point in a higher traffic mall environment. Ultimately success will be based on the department location within each store and the environment they create. The convenience will be there, it will just be a matter of executing a compelling shopping environment that will draw the consumer to buy.”
Industry consultant Allan Mottus agreed, asserting that drugstores have gone to a stand-alone format since most of them need to provide drive-thru pharmacy capability. Sears, he said, is also looking for additional gross margins.
“All big box stores are being challenged today as more categories come under attack by e-commerce and discounters. Beauty is not an expensive category to stock for retailers as product turnover and gross margins are sufficient to entice women shoppers who are limiting trips to stores because of high gasoline costs. Sears’ sales in its traditional categories, such as appliances, have been under attack and the addition of beauty can only be considered an asset,” Mottus said.
One beauty executive familiar with Sears’ test said beauty is working for all of the vendors. While there was training to support brands, it appears the names most known already to shoppers are what customers want as they walk through Sears. It is too hard to build a following for a more masstige line, the source said. Others commented that it has been a long time coming for expansion, leaving them to wonder just how successful the program has been.