Retail Insights from Retail & Tech No 24

Retail news and trends to watch out for

 

  • Mecca’s services splash. Australian beauty retailer Mecca has made a splash with the opening of its first flagship store in Sydney, retailing over 200 brands and offering beauty, health and wellness services. The 1,800m2 (19,375ft2) multi-level flagship features neon yellow elevators, red escalators, mosaic walls, digital backdrops and three-dimensional brand installations. Over a third of the flagship is dedicated to beauty, health and wellbeing services with over 50 services on offer across the first 10 days after opening. The store also features educational and brand immersion spaces for consumers to find out about the latest products and new beauty techniques. There is also a Virtual Services Hub, where Mecca employees’ respond to the retailer’s online community. The flagship is more than double the size of the company’s next biggest store at Melbourne’s Highpoint Shopping Center.

 

  • Livestreaming retail. More retailers are turning to livestreaming to reach a wider audience from their store and drive engagement. Clean beauty brand Beautycounter opened a new store in Los Angeles, California that also doubles as a livestream content studio. The store will livestream in-studio shoppable content that can be viewed on social-media channels, in addition to livestreams on beautycounter.com/live. Beautycounter says the content studio will enable it to expand its reach beyond the physical shop. Meanwhile, US department-store group JCPenney has launched a livestreaming series, which is aired across its Facebook, YouTube and website every Friday until December 18. Called JCP Live, the shows have different themes, like health and wellness, and are hosted by influencers who feature on-sale merchandise. Shoppers are invited to engage with comments and questions during the livestream and five viewers are chosen to win a JCPenney giftcard.

 

  • The rise of retail media. US-based drugstore chain Walgreens has launched an advertising media network aimed at using its consumer data from its 9,000 stores and its 100 million loyalty program members to help brands make relevant and personalized ads. Called Walgreens Advertising Group (WAG), the network offers brands ad placements on Walgreens.com, in its stores and on third-party digital platforms, such as Google and Facebook. Walgreens says that brands will also have access to its programmatic demand-side platform sku level real-time optimization based on daily transactions. More retailers have been looking to let brands have access to their customer data to create more targeted and customized advertising. The customer data is seen as an important tool for retailers in differentiating their offers from Big Tech companies, and a way to generate more advertising revenue. The data is also sought after by brands.

 

  • The Body Shop delivers. The Body Shop has teamed up with food delivery app Uber Eats to launch a pilot program that will see its products available for on-demand delivery in the Uber Eats and Cornershop apps in New York, US and Toronto, Canada. The collaboration is one of Uber’s first beauty brand partnerships. With consumers shopping less in stores as a result of COVID-19, more brands and retailers have looked at ensuring speedy product delivery. Health and wellness retailer Holland & Barrett partnered with food delivery business Deliveroo in June in the UK, while drugstore chain Walgreens and department-store group Macy’s partnered with food delivery app DoorDash earlier this year in the US. Delivery apps too may look to get deeper into the selling side of the business. In November, Uber-owned Postmates introduced a Shop tab, allowing customers to look through brands’ virtual storefronts and browse products. The feature launched with a selection of apparel and beauty brands, including Anastasia Beverly Hills and Hourglass. Uber says that while Uber Eats started as an app for food delivery, it is quickly growing into a one-stop shop for a range of services like groceries, prescriptions, flowers, and – now beauty.

 

  • Reaching out. Ulta Beauty says its tie up with Target, which will see the retailer set up shop-in-shops in Target stores, will help it reach millions of new consumers by offering what it calls a trial and discovery version of Ulta Beauty. Ulta says it will benefit from what it calls Target’s traffic-driving business model and its fulfillment services. Commenting on retail trends, Ulta Beauty ceo Mary Dillon said that although the pandemic has accelerated the shift from in-store to online, the retailer’s research shows that its loyalty program members still prefer to shop in physical stores for beauty. She added however, that the company’s e-commerce business is performing well and that Ulta’s omnichannel customers are the most engaged and productive, spending three times more per year than store-only guests.

 

  • Department-store doom. More gloomy news from department stores in the UK emerged last week. Debenhams has said it will close all of its 124 stores as it had not received a viable sale offer – the retailer filed for bankruptcy in April. However, there may still be a chance it will secure a rescue package from retail group Frasers. Fellow UK department store John Lewis is also scaling down, and announced that it would cease trading internationally, thereby suspending expansion abroad and stopping its online international delivery service. In the US, meanwhile, there is some concern that recent announcements by retailers Sephora and Ulta Beauty to expand their footprint through tie-ups with other retailers (Kohl’s for Sephora and Target for Ulta) will deal another hard blow to the department-store sector in the country. Industry players say that many of the already struggling department-store groups in the US will further lose out in beauty as a result of these recent deals, and that the retail landscape for cosmetics and fragrance will become further dominated by the Sephora and Ulta duo.
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