CEW event highlights beauty retail’s shift to psychographics

By Deanna Utroske contact

- Last updated on GMT

CEW president Carlotta Jacobson, Macy’s CEO Jeff Gennette, and Jill Scalamandre, CEW chairwoman (photo courtesy of CEW)
CEW president Carlotta Jacobson, Macy’s CEO Jeff Gennette, and Jill Scalamandre, CEW chairwoman (photo courtesy of CEW)
At a CEW Speakers Series event this week in New York City, Macy’s CEO Jeff Gennette spoke one-on-one with Jill Scalamandre, chairwoman of Cosmetic Executive Women, about how the company is updating its approach to beauty, what the acquisitions of Blue Mercury and Story are adding to the business, and why it’s imperative upon Macy’s to include indie brands.

Everyone knows that specialty beauty stores are for cosmetics, skin care, and fragrance lovers; that clean beauty boutiques are for the so-called naturals consumer; and that department store beauty is a dying business. Or is it?

This week’s CEW event featuring the insights of Macy’s CEO Jeff Gennette countered the assertion that department store beauty is on the way out.

Prefaced by commentary from CEW president Carlotta Jacobson, and Donna Kalajian Lagani and Jessica Pels of Cosmopolitan Magazine, Gennette’s remarks outlined his strategy for turning around the Macy’s beauty business, essentially shifting from brand-centric retail to consumer-centric retail. It’s an approach that has the store reinventing itself to be more attentive to shoppers’ attitudes, aspirations, lifestyles, and expectations.

Rearranging products and retraining people

Gennette and the Macy’s beauty team are redesigning and remerchandising the beauty department more by category and tier than by brand. Today’s “customer has more choices than ever,”​ says Gennette. And at Macy’s, “we’ve honed in on the fashionable spender.”

It’s a noteworthy concept, because the fashionable spender buys product in beauty, in home, in apparel, as well as other departments. She and he aren’t loyal to any particular tier (luxury, prestige, etc.). And cross-category product is what a department store is all about. Plus data suggests that the department store model is still very desirable: 49% of shoppers prefer to “get a lot done under one roof,”​ according to Benchmarking the Future, a new report from the retail strategist and futurist consultancy WSL.

Gennette also discussed updating the beauty advisor role in various Macy’s stores (magnet Macy’s department stores through to neighborhood Blue Mercury shops). The advisor role is evolving to also be more about product category and tier than about brand. The idea here is again consumer-centric; an advisor should be able to help shoppers find products to meet their needs not simply the best option from a single brand.

Creating new places and spaces

Story, Blue Mercury, and Macy’s ongoing partnership with Cosmopolitan Magazine are creating new places and spaces for consumer engagement.

At the start of the CEW event, Kalajian Lagani and Pels talked about making the magazine shoppable and showed off technology that lets readers buy what they see on the page easily from Macy’s online site.

The acquisition of Story brought “a caravan of new content” ​to Macy’s, says Gennette. But more importantly, he notes, it brought in Rachel Shechtman as the department store’s brand experience officer. He told the audience this week that Macy’s is in the process of developing their first Story now.

And the earlier Blue Mercury acquisition​ brought new specialty store formats to Macy’s business as well as the opportunity to have stores sized and merchandized to serve a single neighborhood well. At the time of the acquisition in 2015, points out Gennette, there were 2 Blue Mercury shops in New York City; today there are 16.

Indie beauty is a must at Macy’s

When the discussion centered on a beauty consumer who shops to discover new products, Scalamandre ask about indie brands and if or how they fit in to the new Macy’s retail strategy.

We have to include small and indie beauty brands, Gennette said swiftly, emphasizing that “customers want it.”

Later on in the conversation, he fielded a question submitted by the audience (via the CEW app) about what advice he would give to indie brands that can’t yet scale their businesses to meet Macy’s retail demand. “Don’t be scared of us,”​ urged Gennette, “Try us; we have a delivery system that can help [indie brands].”

And when asked about what the company is looking for in indie, he noted that there is an opportunity for smaller indie fragrance brands and high-end indie fragrance brands in select stores; that indie skin care brands must be ready to deliver on customer experience; and he acknowledged that indie color cosmetics is a category that “we have to figure out.”

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DeannaUtroske_Editor_CosmeticsDesign

Deanna Utroske, CosmeticsDesign.com Editor, covers beauty business news in the Americas region and publishes the weekly Indie Beauty Profile column, showcasing the inspiring work of entrepreneurs and innovative brands.

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