Beauty is in the eye of the freeholder
Why retail premises owners are attracting beauty and cosmetics occupiers
Beauty is big business. The industry as a whole was estimated to be worth £27.2 billion in 2018, with £10.4 billion of that being from purchases of care and maintenance products.
There is still certainly a demand for bricks and mortar beauty. Perhaps the most obvious reason for that is some products are difficult to purchase at arm’s length – including skin colour matched products and fragrances. Though ultimately, the industry just seems to do things a little differently to other retailers, which draws you into town rather than remaining on your sofa.
There is evidence to suggest that in the UK market, up to 50% of consumers prefer to make beauty product purchases in store and only 16% mainly shop for cosmetics online. A similar themed US report goes even further to say that 90% of Gen Z consumers would rather shop for beauty products in a store.
Covid-19: Make-up and mask-wearing
The Covid-19 pandemic has undoubtedly had an effect on this industry, as it has across the board. Mask-wearing and make-up were not made for each other and with people going out less, sales of beauty products plummeted. Though it was not all doom and gloom, as retailers did report a shift of consumer demand to skincare products instead.
Retailers and experts seem to all agree the money to spend on cosmetics is still there, and demand continues. Growth is also expected in 2021, though perhaps not to pre-Covid levels quite yet.
Influencer marketing and creating a destination
The industry also seems to be becoming increasingly influencer led, with brands either collaborating with on-line personalities or sending out products to them pre-launch so they can advertise to their millions of followers, generating a buzz around the next “must have” product.
An example of this was YouTuber James Charles’ collaboration with make-up brand Morphe. Charles has 25 million subscribers on YouTube and the same on Instagram. In partnership, they produced an eyeshadow palette. When Charles attended a launch event at the Birmingham Bullring, both the shopping centre and local traffic was brought to a standstill by an estimated 8,000 people who attended.
Whilst perhaps shopping centre or retail premises owners wouldn’t wish to have so much footfall all at once, the pull of cosmetics and the beauty industry to a physical store is clear.
The right store with the right products becomes a destination.
Beauty in retail
In recognition of this shift in consumer behaviour, the allocation of floor space and the kinds of tenants in retail premises is changing.
Several household name retailers are committing to leases across the country to open standalone beauty stores or launch new beauty offerings.
- Next has signed up to take five former Debenhams beauty departments to open its own beauty halls in Birmingham, Glasgow, Leicester, Reading and Croydon.
- Zara launched its first complete beauty line in May 2021, and they have set up a dedicated area in their Bond Street store for those who want to come in person to see and try it. Presumably if it is successful this will be rolled out across their portfolio.
- Harrods is set to open three more H Beauty stores in Edinburgh, Bristol and Gateshead, with two already open and trading at Lakeside and centre:mk. Harrods also allocated 90,000 square foot of floor space at its flagship store to beauty.
The experience of product and place
Beauty counters are not just an errand to run but something to be enjoyed. Free samples (with or without purchase) are common place. Customers can receive a glass of fizz and a free scented hand and arm massage at Jo Malone or a full make up application at Charlotte Tilbury (with the money spent on that being transferable to products on the day).
There is plenty to be enjoyed whilst you shop and give the consumer all the more reason to attend in person, rather than turn to online offerings.
Now seems an opportune moment for retailers to broaden their horizons and take the plunge towards experience led retail – for example “Instagramable” store fit-outs, live music, product launch events and food tastings or even masterclasses.
By building a feeling of culture and community around retail, especially after people have been socially distancing for so long, it might just be the much needed invigoration the high street needs.