Retailers from Target to Kohl’s make big bets in beauty as department stores reel.


Some retailers are betting that lip glosses, eye shadow palettes and facial scrubs will be the next big thing to drive customers, especially younger ones, to their stores.

As the likes of Ulta Beauty and LVMH-owned Sephora continue to open new locations across the United States, mass retailers like Target and Kohl’s are investing more in beauty and hoping to grow their market share in makeup, nail products and perfumes.

With this, a category that has historically been dominated by America’s department store chains is now increasingly moving out of malls. And while the coronavirus pandemic has driven an overall decline in beauty sales this year, sales of makeup and other personal care items have been surging online, which could prove to permanently shake-up the beauty landscape even further. With department store makeup counters losing clout, beauty could bring big business to companies that were not investing as much in the space before.

“How customers want to experience beauty is shifting,” said Alexandra Wilkis Wilson, former co-founder of Glamsquad, and current co-founder and managing partner at the investment firm Clerisy.

“The idea of a sales associate spraying perfume on cards and handing them out, and then offering to do a makeover, seems unhygienic or even dangerous to a consumer right now,” she said. “And even after there is a [Covid-19] vaccine distributed, my sense is the consumer’s view of hygiene and shopping for beauty is going to change.”

This hesitancy from consumers is clearly there: 41% of people said they felt either “unsafe” or “very unsafe” testing beauty products in stores during the pandemic, according to a survey of 1,097 consumers on Nov. 11 by the retail analytics firm First Insight. Twenty-two percent said they plan to actually buy more beauty products this holiday season compared with last, while 35% said they’re planning to buy less.

But post-pandemic, analysts expect a strong rebound as people look forward to getting dressed up again, which is part of the reason for all the renewed interest in the space.

“Everyone is all-in for getting back to special occasions,” said Telsey Advisory Group CEO Dana Telsey. “People have missed birthdays, graduations, anniversaries ... there’s going to be demand for makeup.”


 

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