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As retail flounders, department stores and retailers ramp up beauty instead

Published on: 05-Nov-2020

For some retailers, it means turning their attention to beauty. In the last few months, a few have forged ahead with ambitious investments to diversify and improve their beauty offerings.

Supersizing beauty offerings has its perks. The beauty market here is big, with Singaporeans spending US$296 million (S$402 million) on beauty and fashion products last year, according to findings by e-commerce logistics solutions provider Janio Asia.

Research company Euromonitor estimated that the Singapore beauty and personal care market will be worth $1.85 billion by next year.

And despite any dips in spending during the pandemic, the local cosmetics market is expected to grow annually at a CAGR (compound annual growth rate) of 2.7 per cent from 2020 to 2025, data company Statista found.

Department stores are not necessarily an outdated concept when it comes to beauty either.

A 2019 report on Gen Z spending by American investment bank Piper Jaffray Companies found that 91 per cent of female teens preferred doing their beauty shopping in-store. In Singapore, beauty and personal care made up 28.2 per cent of sales from department stores in 2019, Euromonitor found.

Tangs at Tang Plaza has been rolling out a year-long refresh of its Beauty Hall, introducing new brands as well as revamping traditional counter spaces into more distinct "store-in-store" concepts.

Last Monday, BHG Singapore unveiled an extensive revamp of its Beauty Hall at Bugis Junction. The department store doubled its number of beauty brands, introduced five spa cabins, and added a mobile point-of-sale (POS) cashier system, allowing customers to make cashless payments for purchases without queueing at a central cashier.

Head of merchandising Vivien Lim says the revamp was planned since the middle of last year and is part of the reinvention plan of BHG, which launched e-commerce in June.

"We want to lead in the transformation of Singapore's department store scene by creating a more immersive shopping experience, where customers can be fully engaged with the different brands on the floor," she says.

Given free reign to conceptualise their counters, brands like Gucci Beauty and Burberry Beauty now stand out with distinct designs.

Tech has been a big factor in the revamp. The mobile POS system was quickly rolled out for this pandemic, says Ms Lim, "as it introduces semi-contactless touch points, making shopping a much safer experience".

Meanwhile, Skinceuticals, Yves Saint Laurent Beaute and Nars incorporated AR (augmented reality) technology at their counters to let customers experience products without physically testing them.

Skinceuticals invested heavily in tech for its counter at BHG Bugis - its second one in Singapore and "largest Skinceuticals department store counter in the world".

Skinceuticals counter at BHG. PHOTO: COURTESY OF BHG SINGAPORE

The medical aesthetics skin-care brand under the L'Oreal Group debuted novel innovations such as an AI robot that assists customers with product details, prices and a mini store tour. Also new are a Lift and Learn Wall, where customers can interact with and learn more about the brand's hero products by lifting the product in their hand.

L'Oreal Singapore's country manager Iris Lam says BHG Bugis and Skinceuticals were aligned in their vision for digitalisation and beauty tech.

"The pandemic has emphasised how important it is to innovate our products and services, to provide consumers with retail-tainment, consultation and personalised recommendations."

Previously, Skinceuticals was only available here in aesthetician clinics, before launching its first counter at Tang Plaza last year.

Department stores have a "dedicated database of consumers and members, and showcases numerous brands under one roof", says Ms Lam on the decision to invest in a department store as opposed to a standalone store.

"This appeals to consumers who love the shopping and browsing experience. Our Tangs store opened last year and quickly became the brand's number one outlet, recruiting mostly new-to-brand customers," she adds.

Dr Lynda Wee, adjunct associate professor of marketing at Nanyang Business School, observes that it is an apt time to be focusing on beauty.

"Demand for skincare is high now - especially for skincare and cosmetics such as foundation and lipstick that do not stain our masks."

She reckons this business strategy could be a callback to the glory days of department stores. Before beauty retailers like Sephora entered the scene in 2008, they were the go-to for consumers to pick up their favourite beauty brands.

"The beauty department was one of the top draws, often occupying prime space - the ground floor," says Dr Wee. But they "lost ground in terms of brand variety and beauty shopping experience" as competition grew.

Current efforts to regain their beauty departments must also "address online competition" like influencer content, she adds.

"Beefing up beauty is insufficient. The department store concept must be reimagined to be value-based, where retailers understand who their core customers are and what values they seek."

Brand and product curation key

Nonetheless, stores are on the right track in prioritising product curation.

"Stocking new-to-market brands, local or overseas, brings freshness. And exclusivity helps to differentiate," says Dr Wee. "The cosmetics category needs refreshed products or brands, as consumers keep seeking new and improved ways to look good."

Aside from the brand counters, BHG created an all-new Beauty Library of 20 "nature-inspired" indie beauty and wellness labels - after "observing an increase in demand for sustainability, environmentally friendly and natural products in the local market, with more younger consumers joining this new mix", says Ms Lim.

Beauty Library Lift & Learn Wall. PHOTO: COURTESY OF BHG SINGAPORE

Seventy per cent are exclusive to Beauty Library. The labels hail from Sweden to South Africa, and include home-grown brands. BHG looks forward to adding more local brands, if "suitable", in the future.

Smaller retailers have picked up on the trend too.

Home-grown multi-label fashion retailer SocietyA, known for showcasing Asian designers, debuted a beauty line in May. SocietyA Beauty (society-a. com/beauty) builds on the store's mission to highlight Asian labels, curating independent beauty brands from around Asia.

Launching a beauty division was a "natural next step" for SocietyA, says general manager Lily Hamid. It was moved up from October, albeit with phased releases, to help women practise self-care during the circuit breaker.

SocietyA Beauty Bar. PHOTO: COURTESY OF SOCIETYA

The line debuted with local labels including Sigi Skin, Nodspark, and Oo La lab, progressively adding exclusive brands such as Mellow Naturals from Thailand, CELLOOM from Korea, and Nita Cosmetics from Malaysia. It aims to have around 25 Asian beauty brands on the site by the end of the year.

As most SocietyA customers enjoy both fashion and beauty products, having the line offers "the extra value of convenience to shop for all their favourite products with us", says Ms Hamid.

"From a branding perspective, adding beauty to our belt can help strengthen our positioning as the go-to platform for all-things Asian. From a sales perspective, we are looking at increased revenue with the introduction of a new product category."

At the request of shoppers, a pop-up Beauty Bar was set up in SocietyA's store in Takashimaya that ended today.

Ms Hamid adds: "SocietyA Beauty has been extremely well-received by both long-time supporters and new friends of SocietyA. Many shared that they are glad to have discovered products that are suitable for our Asian skin types and climate."


Source: The Straits Times, 5 Nov 2020

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