Mall cosmetic counters get the kiss-off as industry shifts
Department store sales are falling while specialty stores such as Sephora, Ulta woo customers with deals, coupons
On a recent shopping trip to her local Ulta Beauty store, Tatiana Clark got more than $160 worth of cosmetics and tools — including Clinique sunscreen, three types of foundation, Buxom lip gloss, a Shiseido eyelash curler and an NYX eye primer — and she didn’t spend any money.
Her strategy isn’t magic, and it doesn’t break any laws. Clark combined points she received from the store’s frequent shopper program and a coupon she received in the mail to score the savings.
Specialty shops are just one way makeup lovers such as Clark, a stay-at-home mom in Fairfield, Calif., are treating themselves to killer discounts. Shoppers are taking advantage of a shift in the beauty industry to score discounts once unheard of.
Specialty stores such as Sephora and Ulta Beauty are using loyalty programs and apps to notify customers about deals. Meanwhile, some shops have freebies. MAC Cosmetics hands out free lipstick when shoppers return six used MAC containers to a store. If they spend enough, online shoppers often can skip the trip to the mall and save by scoring free shipping.
“Consumers are shopping across multiple channels,” said Larissa Jensen, beauty industry analyst at the NDP Group, a market research company. “There’s a blurring of products. They’re buying in mass online.”
It’s no wonder department store makeup counter sales have declined by 19% in the past decade, according to Euromonitor International, a market research group. Wall Street has taken note. In a recent preview of Macy’s earnings, UBS analyst Michael Binetti expressed concern about the profitability of the makeup counter, writing, “We’re very concerned about recent discounting in cosmetics (one of the last industry holdouts from excessive promotions).”
As department store cosmetic counters struggled, sales at independent makeup brands skyrocketed by 42.7% in 2016 alone. And brands long found at beauty counters are still growing. Prestige makeup, or cosmetics considered high-quality, grossed $4 billion in the first half of 2017, 5% higher than the same period last year, according to NDP.
But department stores aren’t going down without a fight. This summer, stores such as Lord & Taylor, Macy’s and Bloomingdale’s announced they would slash cosmetic prices for the first time in an attempt to keep up with the competition.