The cosmetics industry is undergoing a transformation post-COVID-19, with cosmetics brands increasingly engaging directly with consumers. This shift in consumer behavior has prompted department stores to reimagine their beauty spaces, a trend highlighted by the International Association of Department Stores (IADS), a consortium of twelve global retail chains.
The agenda for these department stores includes incorporating more niche perfumeries, a rapidly growing segment, expanding makeup and wellness offerings, implementing loyalty programs, and strengthening their presence on social media platforms.
Between 2021 and 2022, the cosmetics and beauty category is expected to experience an average growth of 1% among IADS members, approaching pre-pandemic levels. Fragrances continue to lead in this category, accounting for an average of 36% of beauty sales in department stores, with niche fragrances playing a significant role in driving these sales. La Samaritaine’s dedicated section for niche fragrances is a noteworthy example.
Notable high-end perfume brands gaining popularity among IADS members include Creed (recently acquired by Kering), Maison Francis Kurkdjian, Jo Malone, Byredo, By Kilian, Les Eaux Primordiales, Ex Nihilo, Mancera, and Le Labo.
Makeup, which faced a decline during COVID-19 and lockdowns, is making a comeback, projected to constitute 20% of sales by 2022. Brands like M.A.C, under the Estée Lauder Group, are regaining favor. However, the makeup segment has not yet reached pre-pandemic levels, prompting department stores to consider adding new or exclusive makeup brands to their offerings.
IADS partner Nelly Rodi identifies emerging makeup brands as Isamay Beauty and France’s Eclo. Skincare, on the other hand, accounted for an average of 34% of sales between 2020 and 2022, driven by consumer demand for well-being and «clean beauty» products. New spaces, such as the Wellness Galerie at Galeries Lafayette Haussmann, have been introduced to cater to this trend.
IADS also emphasizes the importance of expanding wellness offerings into new segments, including sexual wellness, which presents promising opportunities. Technological beauty, with brands like Foreo, is expected to experience significant growth as well.
Furthermore, building a loyal customer base is deemed crucial in the beauty sector to compete with selective brands like Sephora. Creating dedicated social media accounts for beauty is an integral part of the strategy to attract and retain customers. For instance, El Palacio de Hierro has an Instagram account dedicated to beauty, which has proven to boost sales and attract brand partnerships. TikTok has also become a valuable platform, with retailers like Manor and Galeries Lafayette leveraging it to engage customers and drive sales, particularly in the beauty sector.
In summary, the beauty landscape is evolving, with department stores adapting to changing consumer preferences, embracing niche fragrances, reinvigorating makeup offerings, and emphasizing well-being and clean beauty to meet the demands of their clientele. Building a strong digital presence on social media platforms is seen as essential in fostering customer engagement and loyalty.
