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.

The difference, it seems, is that makeup fans no longer are limited by department store prices or counters that only cater to one brand. Sales from specialty makeup shops, where shoppers can browse multiple labels at once, have grown 20% since 2006 as more physical specialty stores continue to pop up all over the country.

Shoppers are aligning themselves with specific values, such as ingredients they like, rather than forging brand loyalty.

“Consumers don’t shop that way,” Jensen said. “With all the information consumers have at their fingertips, through social media, blogs, specialty stores ... consumers are able to get a read of what’s working — the best of the best — and are shopping across multiple channels.”

In an NDP survey, seven out of 10 consumers said drugstore and specialty shop makeup was just as good as designer department store cosmetics. It’s the decorative showrooms and the scavenger-hunt-like thrill of finding something new that attracts customers to the actual stores.

“Specialty shops offer a different shopping environment altogether,” Jensen said. “A lot of retailers are taking steps to make bricks and mortars more of an experience for consumers. This is what they’re looking for.”

In New York City’s Koreatown, Heather Schultz finds skincare products and budget-friendly eyeliners at stores such as Nature Republic and Tonymoly, shops with colorful displays full of panda bear hand creams and kissshaped lip scrubs.

“Tonymoly is filled with cute characters,” the Rockville Centre, N.Y., resident said. “That’s definitely part of the appeal.”

At Lush Cosmetics, shoppers watch as beauty specialists slice and mix fresh products in front of their eyes. Shops that allow visi- tors to try on the products and encourage them to share their experiences on social media are also fan favorites. So is the possibility of stumbling onto new products.

“There is the excitement of discovery,” Jensen said. “Some of these independent brands consumers have never heard of.”

The arrival of new products might motivate Sara Cameron, 21, to visit her local makeup counter for a trial run. But mostly she prefers to shop online.

“I feel more pressure to buy things in the store with all the sales people,” said the Orlando student, who skips the in-person makeover in lieu of YouTube makeup tutorials.

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.

But NPD’s Jensen thinks the department store price cuts are a mistake.

“It’s a slippery slope,” she said.

TARGET Price-conscious consumers also head to drug stores and discount chains such as Target for cheap makeup deals.

MARY ALTAFFER, AP A woman tries on makeup at Sephora, one of many specialty retailers putting a dent in the profits of department store makeup counters, whose sales have declined 19% in the past decade.