Bluemercury CEO Maly Bernstein’s Strategic Vision – WWD

The prestige beauty retail landscape is in a state of flux. Specialty players like Sephora and Ulta Beauty are doubling down on digital and forging out-of-the-box partnerships to expand their reach, while department stores are struggling to restore footfall. In their midst sits Bluemercury, the Macy’s Inc.-owned luxury boutique with a differentiated footprint of about 160 “neighborhood” locations and a high-touch approach to service. The last year has been one of change for the retailer, though, with founders Barry and Marla Beck, who sold to Macy’s in 2015 for $210 million, exiting the business. In July, Macy’s tapped Maly Bernstein, then the vice president of e-commerce at CVS Health, to run the business. Here, in her first in-depth interview, Bernstein lays out her vision for the future.

Where does Bluemercury fit into the overall beauty retail ecosystem?

Maly Bernstein: To be irreplaceable you have to be different. Our collection is focused on high performance and high potency brands that know where they came from and what they stand for, brands that come from experts — whether makeup artist, hairstylist, physician or aesthetician. Our collection is focused on efficacy.

At same time, level of service — the level of training and knowledge we provide to our team is best in class. When I think about power-packed peptides in our skin care, we provide power-packed tools to our beauty experts so they feel equipped to have thoughtful, knowledgeable and personalized consultations. We also give samples — the ability to provide that kind of conversation and interaction at a higher level sets us apart.

How did Bluemercury fare during the pandemic and over the last 19 months?

M.B.: Like most retailers, all of our clients pivoted online and became omnichannel clients overnight. One of the challenges we faced was we are known for one-on-one interaction — we pivoted that to online and held master classes. We realized we could use technology to create a deeper level of connection. We also learned the client appreciated the expanded assortment online. They enjoyed the extended aisle — it is an opportunity to think about what additional brands can we bring into the store.

We saw a high-double-digit increase in web traffic. We saw triple digit increase in organic search and direct traffic. Session times increased by 70 percent. We found one-third of our customers were new — and 90 percent purchased again in the next 12 months. Clients that were purchasing with us — new and existing — came back at least twice. We’re in a strong place for huge growth.

How else will you harness that?

M.B.: When it comes to digital, loyalty program, assortment, store footprint and trying to understand what will excite and differentiate us from what is happening in the marketplace will drive growth.

I’m known for dreaming and part of that is having been born and survived the Khmer Rouge. I’m wired in so many different ways, one of which is to dream for what could be, and to think about what doesn’t exist but could and should.

We’re going into dream sessions across functionalities and teams to think about what could be possible given what we stand for and the new consumer behaviors and demands coming out of the pandemic.

Where do you see the white space?

M.B.: The number-one question I’m asking is what should the future strategy of Bluemercury be. There’s a lot of excitement about magnifying our core — the beauty expert, the expansion of our assortment, our neighborhood location and how to bring to life our relationships. We also have a growing loyalty program, so looking at the customer experience and loyalty program are similar to what I’ve done before with CVS  but in a new way.

What role does Bluemercury play in Macy’s overall portfolio?

M.B.: I asked this when I was joining. What I was excited to hear is that Bluemercury is this more agile place to test and learn for the portfolio of brands. I’m excited that [Macy’s Inc. leadership] supports the entrepreneurial nature of our brand and at the same time, they are further ahead in areas we are hoping to increase in — digital and omni. So the role we play for each other is to learn from each other.

How do you think of the Bluemercury shopper?

M.B.: Understanding deeply who our client is and what is she looking for, especially given the changes and level of knowledge she has acquired, means we are committed to a complete rethink of how to grow going forward. One of the first hires I’ve made is Jenna Goldberg as our head of strategy and insights, who will help us unpack the current client and our future clients and how can we go after the spectrum.

As you meet the executive and store teams, what’s been most interesting?

M.B.: Everybody is looking for how we can more bold in what we do and more clear in what we stand for and more provocative in how we do what we do. We all agree that the core of Bluemercury is something special to be nurtured, but at the same time, how do we bring it to life in a way that is going to be more breakthrough. Just as Whole Foods completely rethought grocery or Starbucks thought about coffee, how do we do that for beauty?

What role do services play in that vision?

M.B.: Just like we want to go through and revisit our assortment and understand what bigger bets should we take, we also want to look at service menus. A lot of our aestheticians are licensed to do more than what we offer today — a gamut of services  from hair to skin care to eyelash to eyebrow. We know clients are looking for more and our team is able to do them, so what is the right set of services we should be offering?

How do you see the brand matrix evolving?

M.B.: I get excited about the brands that uniquely come and partner with Bluemercury to help clients understand their story. We’re also excited about brands that are going to uniquely lean in with us so we can lean in to them to grow them. In terms of categories, we’ll be true to our results-driven collection, but at the same time, we’ll be revisiting areas. Nesting necessities continue to explode. People are looking for more self care at home. When it comes to skin care, they’re looking for the most advanced solutions in terms of benefits and transformation. Conscious beauty is also important in brand partners and our own brands. There is also opportunity to look there and ask what more can we offer.

How are you thinking about Bluemercury’s retail footprint?

M.B.: We have a strong business with great retail locations. Have we maximized all of the neighborhoods we should be in is a question we are still answering. Do we feel like we are at our limit? I don’t think we know our limit yet.

What I would say in terms of Macy’s portfolio is there’s an opportunity not just to think about our locations, but what are the synergies between our locations.

How do you define your leadership style?

M.B.: In addition to being known for being a dreamer who is tethered by my analytical and achievement-oriented approach, I’m also known for being a listener and a learner. I see myself as an eternal student. With those whom I’ve had the chance to engage now, in my new role, I’m sure they would all agree, I ask a lot of questions. I ask questions to learn, to understand, to be inspired. And the questions I am asking right now include: What works today? How is Bluemercury different? What don’t we do today but should consider for tomorrow? In essence, what should Bluemercury’s future strategy be?