Retail Insights from Retail & Tech No 80

 

Retail news and trends to watch out for

  • Class + mass = reach. UK-based beauty retailer Space NK has partnered with Walmart to bring some of its prestige beauty offer to the US-based mass retailer’s brick-and-mortar stores and online. SpaceNK will create a merchandising unit called Beautyspace in Walmart stores, stocking skincare, make-up, haircare and bath & body categories. The offer includes brands such as Slip, By Terry, Philip B and Lancer and will also feature new and exclusive brands. The concept will launch in 250 Walmart stores in the US this summer and will be available online with 600 products from 15 brands from this month. A number of prestige beauty retailers in the US have looked to bring their offer to mass-market stores in a bid to broaden their reach and target new consumer groups. Ulta has set up shop-in-shops with Target, while Sephora created shop-in-shops at mid-market department store Kohl’s.

 

  • Retreating from Russia Over the past week several beauty brands have posted statements about donations and other humanitarian efforts made to support the victims of the war in Ukraine. While these efforts have been welcomed, a growing number of social-media users have asked companies to take a stronger stance and stop selling in Russia. A small number of companies in beauty have now gone further and said they will close stores and operations in Russia as a result of the war. Estée Lauder Companies (ELC) said yesterday it had suspended operations in Russia last week, including business investments and closed its stores there, while LVMH-owned Sephora stated that it has temporarily closed shops in the country, as well as its online store (LVMH also announced as a group that it had temporarily closed stores in Russia). In the luxury arena, Hermès and Chanel have also closed stores in the country. Meanwhile, UK-based department-store group John Lewis said it would pull made-in-Russia products in its Waitrose and John Lewis stores and that it is working with its suppliers to review products that have components of Russian origin.

 

  • M&S Beauty. UK-based retailer Marks & Spencer (M&S) is to begin selling skincare brand Clinique (ELC). Starting this summer, 500 Clinique skincare and make-up products will be available on the retailer’s website and at stores throughout the UK. Some 34 M&S shops will have a Clinique counter with employees to assist customers, while another 40 will have Clinique products on display in a fixture, including in the M&S Menswear sections. For the online offer, Clinique products on the retailer’s site will be available for free next-day delivery or via click & collect to 700 locations. 

    M&S is looking to make its beauty offer more relevant to today’s consumers through both exclusive own brand products and its third-party assortment. M&S’ own brand Apothecary has become a £20m ($26.9m) brand two years since its launch claims the retailer. Other M&S third-party brands include Aveda, Origins, Ren, Emma Hardie, Eva Lom and Prai.

 

  • Farfetch’s beauty push. Farfetch-owned luxury retailer Browns is to move into beauty with a high-end offer of what it calls conscious and inclusive brands. The beauty business will be managed by Nellie Eden who will create campaigns, content, in-store programming and events. Online luxury retailer Farfetch acquired Browns, which has two stores in London and an online shop, in 2015. In January, Farfetch said it would acquire beauty retailer Violet Grey.

 

  • Shopee & Brazil. L’Oréal has opened flagship stores for three brands on Southeast Asian e-commerce player Shopee’s platform in Brazil. The group has launched the online shops for the L’Oréal Paris, Maybelline and Garnier brands. The three stores retail a selection of the brands’ skincare and make-up products as well as  package deals at lower price points. Via the pages, users can follow a brand’s flagship store and click on a chat function to access customer service. Shopee launched in Brazil in January 2021.

 

  • Department-store recovery. High-end department stores in the US are expected to thrive in 2022 following a strong performance in the second half of 2021, according to a report by data analytics company Placer.ai. While the sector was hit hard by the pandemic, visits to luxury stores have been strong in recent months and the demand for quality goods is boosting visits to Saks Fifth Avenue, Nordstrom, Neiman Marcus and Bloomingdale’s. Saks Fifth Avenue has seen the largest increase in foot traffic from July 2021 to January 2022 compared to the same period two years prior, with visits in January up 14.8% compared to January 2020. Meanwhile, Nordstrom, which has permanently closed 10% of its full-line stores, has seen growth in visits-per-venue every month since July 2021 compared to the same months two years prior. However, traffic has been more challenging for mid-range department-store chains. Macy’s, Kohl’s, JCPenney and Dillard’s have all seen their 2021 monthly visits continue to lag behind 2019 foot-traffic levels.
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