Article

Macy's testing self-serve beauty concept

The concept showcases aisle displays of smaller brands, many of which are entering Macy's for the first time.

May 8, 2010

What follows is an excerpt from one of RetailWire's recent online discussions featuring commentary from its "BrainTrust" panel of retail industry experts.

Macy's is debuting a new self-serve beauty department in select stores around the country. The concept, which coexists with beauty counters, showcases aisle displays of smaller brands, many of which are entering Macy's for the first time.

According to a report in Women's Wear Daily, the assisted, open-sell concept, called Impulse Beauty, is currently in around 15 locations although plans call for another 40 by the close of the year.

The most distinctive feature of the roughly 1,000 square-foot concept, according to the report, is a series of black gondolas with white lettering identifying each category. Brands within the concept include Smashbox Cosmetics, Laura Geller, Laura Mercier, Dior, Stila, H20 Plus Products, Philosophy and Bliss. An aisle labeled "skin care" features StriVectin, Hylexin, Cosmedicine and MD Skincare. A few hair care brands such as Frederic Fekkai are also included.

The concept allows smaller brands to gain a presence inside a department store at a lower cost since Macy's funds the employee staffing the sections. Margins for the beauty brands are somewhat lower than traditional in-store cosmetic counter shops.

But observers also told the fashion trade paper that Macy's Impulse represents a response to a growing crop of open-sell beauty retailers, ranging from Sephora to Ulta as well as more upscale pushes by the mass market, such CVS Pharmacy's Beauty 360 and Duane Reade's Look Boutique. Shoppers are also buying more beauty products online and through home shopping channels.

"Its customer has been leaving Macy's to buy cosmetics in other places," one executive, who distributes to Impulse Beauty, told Women's Wear Daily. "What used to be alternative [distribution] is now mainstream. The boundaries have become blurred because the customers' shopping habits have changed so much. Everyone is shopping everywhere."

Discussion Questions: Should department stores offer more self-service options within their beauty departments? What do you think of Macy's Impulse Beauty? In what other ways might department stores reinvent beauty departments to better serve consumers and ward off competitive threats?

So Macy's develops a self-serve beauty concept years after Nordstrom did the same thing and at least several months after everyone from dollar to drug has either spun off stand-alone beauty concepts (CVS' Beauty 360); doubled down on in-store boutique environments (Duane Reade's Look Boutiques which no doubt were one of the jewels in the crown driving Walgreen's acquisition of DR); or completely re-visioned the mass beauty experience (Walmart's front-and-center beauty cocoons and Target's upscale-ish equivalents). Shoppers have fled department store beauty departments in droves and Macy's is going to woo them back? Macy's bashing has become sport (right up there with Sears) for some and I'll have to join the team on this one. Way too little and far too late. — Carol Spieckerman, President, newmarketbuilders

What made the department store different was exclusive brands and great customer service. With a few exceptions in high-end departments, these stores are mostly self-service today. This means they are not much different than any other retailer.

While it might make sense to sell more products without assistance, where will the cashier be? This appears to be a downgrading of a key factor supporting the higher prices being charged. — W. Frank Dell II, CMC, President, Dellmart & Company

The results should be interesting. Many shoppers choose department stores over all the self-serve options simply because there will be a very qualified sales associate from the brand to help. Certain shopper groups, like those who still shop in department vs. specialty stores — more mature clients, suburban shoppers — have a different value proposition. Great service really drives purchases.

As a way to lure younger shoppers and new, smaller brands, the self-serve option may draw in these groups. Time will tell! — Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

While I can't claim any specific expertise in the cosmetics segment, it's been pretty clear to me that the traditional model of full customer service of broad assortments of premium branded lines was no longer working. When (commissioned) sales associates no longer approach every customer even just passing by, and case displays are consistently only a third to a half full, things have changed.

As others have pointed out, Macy's is only following a growing trend toward self-service and more focused assortments. This looks like one instance of sales associates slowly disappearing because customers no longer require or value their help, rather than simply as a cost-cutting measure. —Ted Hurlbut, Principal, Hurlbut & Associates

What do you think? Continue the conversation in the comments! (Photo by Tim Pierce.)