Joining Them
Beauty brands embrace Black Friday.
The category has long relied on gifts-with-purchase to incentivize shoppers, but as growth slows, the industry has turned to discounting — especially in makeup.
An Urban Decay Naked Palette, for 50 percent off — could it be?
This Black Friday, it could, as the beauty industry’s full embrace of the season’s promotional spirit collides with a major slowdown in makeup sales.
At Macy’s and Ulta Beauty, for example, Urban Decay’s Naked 3 Palette will indeed be 50 percent off, at $27. The Tarte Dare to Live Eye Set, is also 50 percent off — now
$20 — as are Smashbox’s makeup brushes, at between $9 and $21, at Macy’s.
For a category that eschewed discounts for decades, those are some hefty promotions.
Intense competition combined with marketplace saturation have forced beauty — especially makeup — to inch further and further into discount territory over the past few years. Steep price cuts across prestige beauty this Black Friday underscore that shift.
According to Jane Hali, chief executive officer of consumer research firm Jane Hali & Associates, weakness in cosmetics is a driving force behind many of this season’s discounts. For the third quarter, NPD numbers show prestige makeup in the U.S. down 7 percent, to $1.7 billion.
“This is all a reaction to cosmetics not selling, and that is the biggest chunk of the beauty area,” Hali said.
Makeup is a big part of the Black Friday offering, but there are discounts across skin, hair and nails, too. Price cuts are one way to make sure the beauty industry has a “healthy holiday,” said Larissa Jensen, NPD’s beauty business analyst, who said sales started early because Black Friday falls so late in the year. Jensen said she’s expecting solid sales figures for the overall season.
Leading up to Black Friday, many other department stores had selective discounts. Online, Saks showed a 20 percent off Apothecary sale, applied to a sweeping range of beauty and wellness products. Bloomingdale’s online assortment showed 50 percent off Surratt Beauty eye shadow and 40 percent off Rodial Rose Gold Deep Line filler. Lord & Taylor offered $20 off beauty purchases of more than $100.
Specifically for Black Friday, Macy’s advertised products from Origins, Sunday Riley, Elizabeth Arden, Bobbi Brown,
Murad, Philosophy and other brands as being on sale, according to the department store’s catalogue. Bloomingdale’s will offer 10 percent off beauty in stores, excluding Space NK and Drybar. At Nordstrom, the holiday beauty sale assortment centers around sets instead of outright discounts.
Many in the beauty industry blame the discounting uptick on department stores, which are said to have kicked off the cycle.
“Discounting beauty is a more recent phenomenon. It used to be nothing. Nobody ever discounted beauty, it was always excluded. Fashion a lot of times the discount is a markdown to get inventory out, but beauty is evergreen,” said David Olsen, a former retail executive and Highlander Partners managing director. “Discounting [beauty] was started by department stores.”
But over the past couple years, the promotions have seeped into other areas of the market.
“It’s happening at the brand level, it’s happening in specialty it’s happening in department stores,” said Larissa Jensen, beauty business analyst at the NPD Group.
This Black Friday at Ulta Beauty, Anastasia Beverly Hills Glow Kits are 40 percent off, and mascaras from Tarte, Urban Decay,
Pur, Smashbox, Buxom, Lorac and Butter London, regularly $20 to $24, are all $10.
Representatives for Sephora declined to comment on Black Friday sales, but the web site’s “Sale of the Season” banner, ahead of Black Friday, led shoppers to a range of discounted products and gift sets, and advertised up to 50 percent off select items through Dec. 2. Sale items included Fresh Sugar Lip Legends Gift Set at $42, from $48, or the Fenty Beauty by Rihanna Killawatt Foil Freestyle Highlighter Palette at $27, from $54.
At Macy’s-owned Bluemercury, the deals aren’t specific to Black Friday, but are more seasonal. From Nov. 20 to Dec. 14, the specialty retailer is offering customers 10 percent off purchases of $100, 15 percent off purchases of $175, and 20 percent off purchases of $250 or more.
The discounts have migrated online, too, and are showing up on brand web sites and Amazon.
MAC, for example, is offering customers 25 percent off purchases in-store or online from Nov. 28 to Dec. 3; It Cosmetics is offering 20 percent off everything online between Nov. 29 through Dec. 2, a deal that the company’s spokesperson says is in line with last year’s offering; and Urban Decay is offering 25 percent off on its web site. A host of L’Oréal brands, including Maybelline, L’Oréal Paris, Mizani and Baxter of California, are offering Amazon-based discounts for Black Friday.
Smaller, indie brands are dropping prices too — Michelle Phan’s Em Cosmetics is offering 25 percent off sitewide on Black
Friday, with few exceptions, and 20 percent off sitewide on Monday. LillyLashes had a 15 percent off pre-Black Friday offering, and Deborah Lippmann is offering 25 percent off orders over $50 online.
While these particular promotions are seasonal, price cuts in beauty are no longer beholden to the holiday shopping period.
“It definitely feels like promotions have accelerated in a big way in 2019,” Jensen said.
Those deals, sprinkled throughout the year, have been able to drive unit volume spikes, according to Jensen.
“When we saw the big retailer promotions, whether it was Ulta 21 Days of Beauty or Sephora VIB or Macy’s Friends and Family — all those big events, if you look at weekly sales we have seen consistently that the units sold during those retailer promotions spike the highest,” Jensen said.
Those sales jumps are not necessarily a good thing, Jensen said, noting that they haven’t made up for makeup’s overall slump.
“Makeup is the cautionary tale here,” Jensen said. “Even with the big spikes in unit volume growth during the retailer promotions, we’re still seeing an overall decline in the category. As an industry, it’s definitely something to think about as we head into 2020, that we don’t want other categories to fall into the same kind of cycle.”
“It’s a slippery slope. And watching the year unfold, with all the promotions that took place — there are retailers that increased the amount of promotions, and… the percentage that’s off, there’s an element of this rush to get consumers to purchase.”
That rush is driven by increased competition in the marketplace. When one retailer discounts, the other ones react by discounting too, Jensen said.
On top of that, the sector, especially in makeup, has become saturated. Barriers to entry went way down with the rise of social media, which resulted in an influx of new brands and products that could be touted out through the influencer community.
“It’s market saturation in a big way,” Jensen said. “At what point will the consumer have that backlash of [it] just [being] too much? We’re kind of seeing that with makeup. That’s one of the theories we have about why makeup is softening.”
Trend cycles aside, industry experts contend that the sales spiral is already starting to affect consumers, who are becoming trained to stock up on their favorite products during sale periods.
“As a retailer or as a brand, you are seeing that there is competition that is putting itself out on sale, and consumers are flocking to that — they’re waiting for that — you can see it in our numbers,” Jensen said. “All the numbers point to the fact that we have a healthier economy, but at the same time, consumers are looking for that value and they’re looking to get more bang for their buck at the end of the day.”
“Discounting is always habit-forming,” Hali said, noting that it’s not likely the cosmetics slowdown is likely cyclical.
“When apparel went into activewear, that was a real structural change where people wanted to dress that way and wanted to be comfortable — that changed everything. I’m not so sure with makeup. You do need color to make yourself look better.”