Supply side: Retailers battle for beauty sales in 2021
Beauty is the new battleground for market share among major retailers who have each stepped up their efforts to glean more sales in this higher margin category this fall. The NPD Group reports that U.S. sales of premium beauty products fell 17% last year but recovered about 11% of that loss in the first half of 2021.
“We see two stories unfolding for beauty – one of stagnation (department stores) and the other of recovery,” said Larissa Jensen, beauty industry advisor at NPD.
She said lipstick sales have improved since the mask mandates were repealed, and that there is an increase in sales of skincare and perfumes as consumers opt out. little luxuries. She said these products are mostly purchased online and not at department store cosmetics counters like in previous years.
Many market watchers say now is the time to try to increase market share in the beauty category, a $ 42 billion company in the United States alone. Walmart said it “leans heavily on beauty” and recently added more than 40 new labels to the category and put more emphasis on serving people of color.
Musab Balbale, vice president of merchandising at Walmart US Beauty, said the category is changing as the pandemic slowed sales last year with people working from home. He said beauty product sales were on the rise in 2021, with consumers wanting whiter teeth and lipstick when they took off their masks. Balbale also said adding more products is not an automatic fix as the retailer needs to make beauty more consistent with an enhanced store experience using interactive digital displays.
“There is a lot more digital engagement in stores. It is an experience capable of delighting customers while providing replenishment and ease of purchase. There’s a lot of work going on to explore how this could be amplified, ”Balbale said in a recent podcast.
Balbale has worked in retail for the past 20 years and recently made the switch from wellness to beauty at Walmart. He said Walmart’s beauty team has nearly doubled the number of new beauty brands in the past year. Walmart has also started to enter the popular worlds of TikTok and live shopping, hosting its first live beauty shopping event through TikTok in March, drawing more Gen Z (under 24) consumers to the market. bosom of Walmart.
Walmart also recently partnered with Uoma by Sharon C, a sustainable black-owned beauty brand of Sharon Chuter that draws inspiration from Gen Z. Balbale said the brand exemplifies Walmart’s drive to “change the way of which we engage the beauty community ”through“ diversity, inclusiveness, accessibility [and] durability.”
“The challenge with beauty is how to bring it in from other areas of the store,” Balbale said. “We know she does her shopping every week. More and more she is looking at fashion and home and the areas where Walmart is making headway. The mission is to facilitate the purchase of what she buys in the beauty area and also to give her things to discover during her weekly shopping trip.
Amazon recently announced a beauty event in October that it calls Holiday Beauty Haul that will run from October 4 to 25. Amazon hopes to use the event to help drive traffic to other holiday promotions it runs later in the season.
“We want to attract customers to Amazon during Black Friday week but also in the long term with additional marketing levers,” Amazon said in a slideshow it sent to beauty brands and consultants. “This is a unique opportunity for the selected brands to reach both more buyers and new customers. “
Amazon has been selling beauty products since 2000, starting with mass products and gradually adding more expensive brands. In recent years, the company has introduced digital services using augmented reality to allow consumers to try on lipstick before virtually purchasing it.
The new beauty promotion event will include perfumes, men’s grooming, winter skincare products and cosmetics. Amazon has said beauty is one of the fastest growing categories, and the company is also looking to reinvent the online beauty shopping experience.
In September, Target announced a partnership with beauty giant Ulta that will set up more than 100 Ulta mini-stores in select Target locations as well as on the retailer’s website. In August, the partners said they could see the business reach 800 stores in the next few years. The business is a shop-in-shop concept that Target has done well in the past. The retailer will occupy approximately 1,000 square feet of space for the expanded beauty section with its stores, and there will also be specialty displays, discovery areas and on-trend products. Stores will also have Ulta Beauty-trained employees ready to contribute their expertise via online chats.
“Ulta Beauty at Target reflects the continuing evolution of our omnichannel strategy, rooted in unleashing the potential of our physical and digital footprints, creating more transparent buying opportunities for our loyal customers and continuing to lead the beauty industry, ”said Mary Dillon, CEO of Ultra Beauty.
Target CEO Brian Cornell said the partnership is great for Target customers as they will have access to over 25,000 beauty products from 500 vendors and deep beauty industry skill and expertise. beauty.
Dana Telsey, CEO of Telsey Advisory Group, said everyone is ready to start celebrating special occasions like missed birthdays, graduations and birthdays again, and there is a need for makeup. She said beauty is also a high-margin category compared to groceries, and it’s no surprise that Walmart and Target are expanding their beauty offerings. She said consumers also tend to be loyal to their favorite beauty brands, and the products can also drive traffic in stores and online, which is what retailers are looking for.
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