Physical beauty retail rebounds – Glossy

Beauty retailers are upping the capacity limits of stores as foot traffic is on the rebound. According to research firm GroundTruth, overall foot traffic for beauty retailers was 226% higher for April 2021 than April 2020. While hygiene restrictions have loosened, many still remain in place for product testers and application. But as services remain limited, retailers have been introducing in-store digital and omnichannel features such as QR codes; virtual try-on; buy-online, pick-up in-store and same-day delivery at a rapid pace. 

Restrictions are lifting, but hygiene protocols remain
Classic features of the beauty shopping experience, including product testing and in-store makeovers, are still limited.

For Ulta Beauty, most stores are open at 75% retail capacity with its salon business open at 50% capacity; 156 U.S. stores remain at less than 75% retail capacity. When new state and local restrictions lift, the number of stores open at less than 75% will be at 116 next week. It is remaining cautious with services for now; only brow services are back in-store. Product testers have not been returned to the floor yet; the current plan is to re-introduce them for all product categories except mascara in July with new protocols in place. This will include telling customers to swatch products on their arm rather than test on their face, said Kecia Steelman, Ulta Beauty COO.

Other retailers such as Sephora, The Detox Market and Credo Beauty have brought back testers, but customers can no longer touch them — application must be administered by staff. 

Credo Beauty, which had frequently held in-person events in-store and offered makeup and skin-care services pre-pandemic, is planning to resume these in August. In-store purchases have been on the rise as its foot traffic has risen 50% since February. The retailer currently sees about 65% of its sales from e-commerce, down from 85% in 2020 but up from 30% in 2019. It projects store sales will make up 40% of sales for 2021.

Customers that enter beauty stores are also increasingly going back into browsing mode, after pandemic store visits were generally quick in-and-out trips to pick up specific items.

“We’ve seen, in the past two weeks, a drastic change in the behavior of clients,” said Romain Gaillard, founder and CEO of The Detox Market. Previously, pandemic shopping habits had meant “people coming into a store all wanted specifically to buy something. So, you had less traffic, but I would say 100% conversion.” Store foot traffic began to pick up at the end of May. In the past 10 days, he said the retail situation has gone “from customers being super careful and not wanting to touch stuff to now, [where] no one wants to wear a mask and they want to touch all the testers.” He does not plan to make the testing restrictions permanent, saying that if the pandemic recovery continues successfully, product testing “will get back to normal eventually.” 

While mask mandates in most U.S. states are either completely lifted or lifted for vaccinated people, some staff members are still interested in wearing masks. Ulta Beauty staff members can notify the company they are vaccinated in order to forego the mask requirement. But with the Delta variant spreading and new mask guidance being issued in some states, the company added that protocols can change daily.

“I’m hearing from them when I’m visiting stores, and some of our associates still really want to be able to wear their masks because they have children at home that aren’t vaccinated yet,” said Steelman.

For digital-first retailers, the timeline of store reopenings is much longer. Luxury beauty e-tailer Violet Grey, for example, is waiting until fall 2021 to reopen its one physical store in Los Angeles. Glossier, meanwhile, just announced it will open a new permanent retail location in Seattle in August, followed by stores in Los Angeles in the fall and London in winter. It will bring a physical store presence back to New York in 2022.

In the meantime, Violet Grey is using its store staff to create online content and manage phone and live chat consultations. In September, it will use its store space to shoot its fall campaign.

Stores get smarter
While physical product try-ons have remained limited, in-store digital features have proliferated. 

QR codes, for example, are being adopted by a growing number of beauty retailers in the U.S. Ulta Beauty has increased the presence of in-store QR codes that link to its mobile app, which offers features such as product information, virtual try-on and skin analysis. Credo Beauty is also adding QR codes to shelves in-store. 

“We’ve introduced the QR codes in a much broader way throughout our store,” said Steelman. “People’s behaviors and how they look at shopping in the actual, physical store format is continuing to evolve.”

“The customer is hungry for more information,” said Annie Jackson, Credo Beauty COO. She added that restaurants popularized QR codes during the pandemic, making incorporating them in stores “a total no-brainer.”

“They’re kind of expected now,” she said.

Ulta added thousands of new SKUs to its GlamLab virtual try-on feature, and downloads of its app doubled in 2020. While Ulta’s model is to allow users to virtually try on products through their own phone, other retailers such as MAC Cosmetics have embraced the installation of in-store screens for virtual try-on.

Virtual consultations with store staff are another feature retailers are expecting to keep. After the pandemic began, beauty retailers including The Detox Market, Deciem, Cos Bar and Heyday launched virtual consultations by store associates through the Hero platform. They joined a handful of retailers that had already had virtual consultations in place, such as Credo Beauty. 

Omnichannel options set to continue
According to most retailers, foot traffic is not back to 2019 levels. But even customers shopping online have grown used to the omnichannel options that were quickly added by retailers during the pandemic. A recent study by January Digital and Coresight Research found that more than 34% of U.S. consumers under the age of 45 listed buy-online, pick-up in-store and curbside pickup as “very important.” 

Consumers “expect the same conveniences they had during Covid to continue in the months and years to come,” said Sarah Engel, CMO of January Digital. “Easy, free product returns for online orders, inventory visibility between stores and website, and the ability to buy online and pick up in-store or curbside were also deemed very important by consumers.”

Curbside pickup significantly expanded during the pandemic. Both Ulta Beauty and Sally Beauty, for example, added curbside pickup to their existing buy-online, pick-up in-store options. Sally Beauty also offers a ship-from-store option for certain stores. According to Brenda Rutenber, group vp for Sally Beauty, these omnichannel features “will stay in place,” even as its foot traffic picks up. 

“They’ve been extremely well received,” she said. “The customer expects a fluid experience between the site and the store. On one day, they may want to buy online and pick up in the store, Another day, they may have more time and want to go in and connect.” 

Sally Beauty is also planning to join the growing number of retailers offering same-day delivery. It’s aiming to launch the feature through a third-party platform in mid-July. It will join a wide range of beauty retailers that have added same-day delivery through partnerships during the pandemic, including Sephora, which launched with Instacart in September. Other beauty brands have teamed up with Postmates and UberEats for delivery from their physical stores.

According to Rutenber, Sally Beauty sees its store presence in all 50 states “as an advantage, because it allows us to do same-day delivery, and a lot of retailers can’t do that.” 

Physical retail is here to stay
Even during the pandemic, beauty doubled down on physical retail. For specialty beauty retailers, big-box or and department store partnerships remained a popular model as Sephora partnered with Kohl’s and Ulta announced that it would be launching at Target.

“One of the things that definitely changed this year was our partnership with Target. We’re going to be seeing that coming out later this summer, so it just goes to show that we still do believe that a physical shopping presence is important to our consumer,” said Steelman. Another wave of the virus brought on by the Delta variant would not deter investment in physical retail, she said. 

“We’ve seen that our very best shoppers are those that shop online and in-store. There’s not a tradeoff of one or the other. It’s very loud and clear that we think physical is an important part of Ulta Beauty.”