Bluemercury may have a nationwide fleet of more than 70 retail stores, but it’s still run like a mom-and-pop business.
In fact, it’s the company’s “friendly neighborhood” model — and its knack of finding the best independent brands — that is making Bluemercury the “largest and fastest-growing” luxury beauty retailer in the country, according to its cofounder and chief operating officer Barry Beck.
It’s also what caught the eye of Macy’s Inc., which purchased the business last year for $210 million.
Beck was a “serial entrepreneur” when he stumbled on the predecessor to Bluemercury in the Georgetown section of Washington, D.C., in 1999 and immediately saw “fireworks.” So he purchased the business, renamed it Bluemercury and started seeking financing to eventually grow the chain to more than 500 stores.
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The business soon attracted suitors and Macy’s won out.
Although Bluemercury is now part of a massive retail organization, Beck stressed that its winning strategy has not changed. “We’ve built a unique business model that is unable to be replicated,” he said, adding that Macy’s “has been an incredible source of capital” and serves as a “rich uncle” in terms of infrastructure. Bluemercury, on the flip side, offers innovation to its parent, which is busy installing shops in its department stores.
Bluemercury stores are staffed by “beauty junkies” who live and breathe the business, and are positioned to give “expert advice” to customers, he said. Beck called these employees the company’s “enduring secret weapon.”
Some 25 percent of the company’s shoppers are looking for a particular brand, 25 percent for a solution to a particular problem and the remaining 50 percent for a product with a specific attribute, “so these beauty experts need to be human Googles,” he said.
Ditto for the buyers.
With most of the independent brands now owned by beauty behemoths such as Estée Lauder, Bluemercury is “always on the hunt for less widely distributed, yet innovative brands. Those are few and far between these days, so the company created its own brand, M61, to answer the call, and it’s been “a runaway cult success,” Beck said, noting that it is now the company’s best-selling product line.
In addition to its employees and merchandise, Bluemercury also has a “laser-focused real estate strategy” that sets it apart from its competitors. Beck said the majority of its stores draw customers — most of whom are affluent professionals who visit three to four times a month — from within a five-mile radius, and so Bluemercury “clusters stores to build a moat of convenience.”
This will become even more important in the future, he believes, as the population continues to grow and traffic becomes more daunting.
Embracing social media will also be key to success going forward, he added, noting that eventually he expects “live mirrors” to be used in stores so customers can get opinions from their friends while shopping. And merchandising products with their Facebook “likes” will also be part of the landscape.
Speed will also be essential. “The attention span of a human is eight seconds. A goldfish is nine seconds,” he said, so employing drones to drop off deliveries could be commonplace within five years as well, Beck believes.