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Beauty Clicks Anew in the German Market

New brands and online retailers are exciting consumers as they embrace beauty trends.

BERLIN — In 2009, when makeup artist Miriam Jacks opened her store Jacks Beauty Department in Berlin, she was a lonely independent, introducing niche brands such as Butter London and Cosmetics à la Carte to a German market dominated by global giants and drugstore classics. Now, almost every city in the country hosts beauty concept stores, blowout bars and manicure shops.

“The German market has grown ridiculously,” the entrepreneur, who left retail to focus on her blog and work as a beauty expert for L’Oréal Paris and QVC Germany, told WWD. “It’s really cool that Germany has adapted to the way American or French women did [beauty] for many years. And the Berlin woman who always wore no makeup now wears bright lipstick even during the day.”

The beauty bug has bitten the country hard. New players, products and approaches are waking things up in this risk-averse land that’s more often a trend follower, despite Germany being Europe’s third-largest market for premium beauty. Influencers and online are helping to rouse the sleeping giant and raise cosmetic literacy.

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One of the hottest spots today is Sephora. The company’s black-and-white logo returned to Germany in June, as the first of what’s now eight shops-in-shop launched in Galeria Kaufhof department stores. From 1999 to 2001, the LVMH Moët Hennessy Louis Vuitton-owned beauty retailer had four stores here, but foundered competing in a region dominated by Douglas and other perfumeries. Now, beauty fans are thronging to Sephora, which is registering strong performances everywhere. And they’re sharing what they buy, said Miriam von Loewenfeld, head of Sephora Deutschland.

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“Selfies as driver for the beauty business? Because the focus is on the face? Precisely,” she said.

Others are taking note.

“Sephora has shown the industry that hip, trendy brands can entice large numbers of young people into bricks-and-mortar stores,” said Martin Ruppmann, head of the VKE, Germany’s association of cosmetics producers. His group is watching to see if this translates to other retailers and has the power to counter the continued pressure of price slashing and online competition, particularly from Amazon.

Germany is Amazon’s second-largest market, and its beauty offering here is niche-oriented and well-presented. According to One Click Retail research group, in 2017 Amazon had estimated total beauty sales of more than 160 million euros, a 53 percent on-year rise, with mass making up 88 percent of those sales. Fragrance was the top beauty category, while the best-selling item was the German-made M2 Beauté Eyelash Serum, priced at close to 130 euros.

It’s a lot to compete with, but a personal touch helps. Berlin’s MDC Cosmetics, a jewel-box Berlin boutique selling Santa Maria Novella, Emma S and Aesop, among others, has extended space and reach to provide holistic services. It also retails online, offering advice over the phone before skin-care purchases.

“The trend here for personal consultation is getting more and more important,” explained MDC founder Melanie dal Canton.

Personalization is key at KaDeWe Group department stores, too, agreed Julie Gasperini, head of buying, women’s accessories and beauty. Features like “engraving bottles, stamping initials on leather cases, mixing an individual fragrance at the counter or creating a special skin-treatment after an extensive skin-analysis” help drive sales.

Inside KaDeWe.
Inside Alsterhaus in Hamburg Courtesy Photo

Even German budget beauty brand Essence opted for a little DIY with its My Must Have palettes. Customers can make their own mix of eye and lip shades for a few euros.

Cosnova Beauty, parent of Essence and mass brands Catrice and L.O.V., had the highest market share on Germany’s cosmetics market volume-wise in 2017, with 35.1 percent, according to Nielsen.

Christina Oster-Daum, Cosnova Beauty founder and managing director, sees a sector that must change or get passed by. While classic industry types point to stagnating retail sales figures, she highlights strong brand engagement in social media and brisk online sales, too long ignored by market research here.

“Digitalization makes the conventional approach obsolete,” she noted.

Her company is here to stay — and play — releasing innovative and inclusive products like Catrice’s Genderless limited edition. As part of the firm’s digital transformation, all Cosnova brands will sell online starting this year.

It’s about time, say some.

“One thing that has been particularly surprising is how much of a lack of innovation there’s been in Germany, particularly around anything pertaining to digital,” said Reid Sherard, associate director of Europe research for L2.

Barriers to growth include a dearth of investment in digital from retailers and reticence from the largely cash-based and privacy-oriented culture. Now, said Sherard, firms are adapting, offering multiple payment options, including cash on delivery.

Even drugstore giants DM and Rossmann are trying to make it work with beauty content on Instagram. K-beauty is getting a strong push, too, with DM selling skin-care products from Missha online, while offering a variety of masks from Korea-inspired U.K. brand SUGU in stores.

In prestige, KaDeWe Group’s three stores are also looking east. A promotion running March through May called Super Asia highlights fashion and beauty brands. Imports hitting the shelves include Huxley, J One and Shangpree.

They join top seller Charlotte Tilbury and another Germany exclusive, Nars. And hair is a growth market, with brands Ouais, Elizabeta Zefi and Oribe showing promise, KaDeWe said.

There’s enough consumer enthusiasm to go around, it seems.

“The next big trends will be hair, masks and natural ingredients combined with the latest in scientific know-how, as well as skin care that’s fun to use. We already see that the likes for hair posts and videos are somewhat higher than those for makeup,” von Loewenfeld said.

Sprouting up, too, is the Z factor. At the end of March, online fashion seller Zalando launches its beauty offering in Germany.

As with Sephora, the second time’s a charm. Zalando tried the category from 2010 to 2014, but flopped. Its new version boasts staff poached from Amazon and Douglas, and offerings priced from five euros from about 150 brands, including players like L’Oréal, Penhaligon’s and L:A Bruket.

“The expansion into the beauty market is a natural next step and reflects the demand of our customers,” stated company co-chief executive officer Rubin Ritter.

Zalando is also set to open a beauty concept store in Berlin.

L2’s Sherard noted: “They’ve had a very compelling proposition for fashion brands, and I think they might have a strong opportunity among beauty brands, as well,” he said. “It’s their opportunity to lose.”

With more choice, higher competition and a new cornucopia of brands, Germany’s beauty consumer will likely continue to win.