Retail Trend: Digital beauty brands opening storefront shops

By Deanna Utroske

- Last updated on GMT

Retail Trend: Digital beauty brands opening storefront shops

Related tags Retailing Kline

Cosmetics brands and ecommerce generalists that launched as pure play digital ventures are shifting to omni-channel commerce, and a new report from global market research firm Kline looks into the phenomenon.  

The report, Beauty Retailing USA: Channel Analysis and Opportunities, considers the sorts of digital players that are moving into physical retail as well as how and why this change is happening.

"The flurry of online retailers entering the physical world signifies yet another paradigm shift in beauty retailing," ​affirms Karen Doskow, director of Kline's consumer products practice.

An industry in flux
The report calls attention to prominent digital beauty brands like Birchbox and Violet Grey that have opened brick-and-mortar locations. Credo has done so as well, “hoping it will be the start of a chain,”​ according to Kline. For its flagship location, the natural beauty curator opted for a spot in San Francisco, California, earlier this summer.

Digital brands like Credo are segmenting buyers in real life when choosing storefront real estate. “The concept was driven around finding a location that is in a neighbourhood with high traffic of people that have a certain belief system,” ​Shashi Batra, founder of Credo tells the press.

“You tap into a belief system of people who buy and understand this category – not just in beauty, but this [natural] category. Fillmore clearly is the street.” ​(Read more on Credo from Cosmetics Design​.)   

Bigger than beauty
Ecommerce giants, for whom beauty is a fraction of the business, are testing pop-up boutiques and more conventional retail options.

"While everyone else has been flocking online, online pure plays are becoming physical. Omni-channel retailing strengthens both ways as retailers and marketers strive to offer channel agnostic consumers the convenience of shopping in physical stores and online," ​Doskow explains in a media release announcing the Kline report.

Amazon has tried the pop-up shop and also opened a consumer-facing location at Perdue University, where shoppers can pick up their online purchases. The market researcher notes that Google, Bonobos, and Warby Parker are also dabbling with brick-and-mortar stores.

Direct response brands
Beauty brands that previously sold their products only though infomercials are wrapped up in this retail phenomenon too.  Kline points to Meaningful Beauty and WEN as well as the Miracle Skin Transformer and Hydroxatone brands from Atlantic Coast Media Group. These products are newly available in beauty retail stores and department or drug stores that have enhanced beauty departments.

This shift in beauty retailing suggests that consumer behavior is guiding the industry. Mobile tech and mobile lives make for highly variable shopping habits. What’s convenient one day may be terribly inconvenient the next, and consumers are loyal to brands that they can purchase in store, on line and everywhere in between.

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