The fact that fashion retailers include beauty in their strategies is not necessarily new. Online retailer Net-a-Porter launched a beauty category back in 2015, closely followed by a similar initiative by multi-brand retailer Revolve. The trend then spread explosively and also included brick-and-mortar retail.
While luxury and high-end brands are leading the way in merging fashion and cosmetics, fast-fashion labels and retailers have also jumped on the trend to offer customers a holistic shopping experience. Zara, River Island and Primark are among the companies that have rapidly expanded their ranges, launching extensive product lines ranging from nail polish and eyeshadow to facial cleansers and body creams.
It’s not surprising that retailers are scrambling to grab a piece of the market. According to a report by Statista, the cosmetics industry is expected to be worth US$758.4 billion (€729.57 billion) by 2025.
When asked why fashion retailers are entering the beauty sector, a spokesman for consultancy Deloitte replied: “The cost of doing business with beauty is lower: “The cost of doing business in beauty is lower, for example Concessions or suppliers, reducing inventory risk.
“There’s also a sense that this area is more likely to be recession-proof, which could help protect against declining spending on clothing or other categories.” On the bright side, beauty and related services can enhance the in-store shopping experience and increase sales.”
Who is driving the trend?
For many retailers, beauty isn’t just about financial gain. Brands have often realized that this also gives them access to a new group of consumers. The typical fashion consumer has their own set of values, so when confronted with beauty products in a fashion-oriented environment, they are likely to behave differently than beauty shoppers. This factor was identified by Frederica Levato, a senior partner at Bain & Company, a consulting firm that serves the retail industry.
Speaking to FashionUnited, Levato explained that fashion consumers – a sector originally led by millennials – are now rapidly evolving thanks to Gen Z consumption. According to Levato, this group is actively looking for a 360-degree customer experience in stores. Noting retailers are responding to this shift, Levato explained, “Fashion brands are transforming their shopping experience through this 360-degree approach, transforming a store into an experience center and meeting place rather than just transacting.”
She added that cosmetics is one of the most experimental categories you can offer. Customers can be addressed in a variety of ways and the category can help expand the circle of potential customers and the business itself, as it offers retailers something they may be lacking in fashion.
One of the brands that is tweaking this approach to provide a collective experience is Flannels. In June, the Frasers Group label unveiled a ‘social media first’ clinic at its newly opened Liverpool store alongside cosmetics brand Esho. There, customers have the opportunity to be treated with a laser, try injection-free lip products and undergo a facial. The expansion builds on Flannels’ already established presence in the beauty sector and follows the launch of Flannels Beauty 2021, which also introduced a beauty bar and beauty fitting rooms.
British doctor Tijion Esho, founder of the Esho brand, which also recently signed a deal with Asos, said Flannels approached the brand as it began to focus on its own expansion strategy. “When Flannels explained the vision of redefining luxury and the shopping experience, it quickly became clear that I wanted to be part of it,” says Esho. “I’ve always wanted to be at the forefront and by creating the first social media compatible ‘tweakment’ rooms, we made that happen. I think we succeeded – as you can see from the reaction of the press and the public.”
Bridey Lipscombe, CSO of Esho, explained to FashionUnited the benefits a beauty company can gain by partnering with a fashion company: “It’s the opportunity to tap into an existing customer base that has the same wants and needs as our current fan base . Cosmetics and fashion buyers share many important needs that are met by both our products and our clinic.”
How are beauty products integrated?
Partnering with an already established and trusted cosmetics brand is just one way for retailers to incorporate cosmetics into their business model. Lipscombe emphasized that the inclusion of a brand like Esho can meet the needs of increasingly informed consumers. “They want clinical formulations and science-based products that deliver real results in both the short and long term.”
This aspect was also highlighted by Bain & Company’s Levato. She pointed out that a fashion retailer who wants to be credible in the beauty sector has to develop the product category together with specialists. While many brands have acquired licenses to enter the sector, this strategy does not allow them to fully integrate the division into their retail environment. “Companies are instead developing new capabilities and business models to be credible in and to serve this category,” explains Levato.
To achieve this, fashion retailers would need to consider many factors, Levato added. “The beauty industry is also one of the most progressive industries in terms of sustainability and the values it conveys to consumers. Customers are often more mindful than in fashion, not only in relation to the environment, but also in relation to the handling of animals.”
Retailers seem to have taken notice of this factor, with Boohoo and Primark recently launching “eco-friendly” and “ethical” beauty products under their own brands. While Boohoo launched a “vegan” line of products alongside its own brand line, Primark partnered with Fairtrade to launch a range of cosmetics aimed at conveying an eco-friendly image to consumers. The launches build on the two retailers’ efforts to introduce more “sustainable” practices in their fast fashion models.
Primark is one of those retail chains for whom beauty is not an entirely new area. In 2014, the company introduced cosmetics and makeup lines in its stores for the first time. Over time, the British fast fashion retailer has expanded its range in line with consumer trends and beauty essentials. Paul Baldwin, Trading Director, Home, Lifestyle, Health and Beauty, said the company “had rushed from success to success”. This included the launch of nail and beauty salons. The latter were developed in partnership with Rawr Express.
“We have invested in our extensive beauty department, which is now housed in a dedicated area within our stores and offers our customers a wide range of beauty products at affordable prices. We see our beauty department as an important part of our customer offering,” adds Balwin.
The brand’s current focus on beauty stems from “really strong response” from customers to the beauty range, according to Baldwin, although the director also noted that he believes the category complements the fashion offering perfectly.
What other strategies are possible?
Special shops are also becoming increasingly popular with fashion houses. Here, the beauty division is launched under a separate name in a new environment that often still matches the retailer’s individual identity. Brands like H&M, which opened an H&M Beauty flagship store in Copenhagen last year, have started exploring this strategy as an alternative route.
The British department store Harrods has also expanded its presence in the cosmetics industry in this way and opened independent beauty shops under the name H Beauty. Having launched the original concept in 2020, the luxury department store wanted to expand its offering and has now established five H Beauty stores across the UK. The stores house a select portfolio of brands and products tailored to local customers.
Speaking about the concept, Mia Collins, head of beauty at Harrods, told FashionUnited: “The ethos of H Beauty stores encourages customers to play, experiment and celebrate their identity through beauty.” To expand on this idea further, the luxury department store has one in its Knightsbridge branch Department of sunglasses, body care and fragrances for men
set up, reaffirming its commitment to providing a “one-stop shopping experience”. “The vision behind this new space was to bring together in one place an easily accessible, highly curated selection of the best personal care, fragrance and eyewear products on the market,” said Collins
How else can retailers enter this segment and where will it develop in the future?
For retailers that have already entered the beauty space, the segment is proving to be an important part of their ongoing growth strategies. This also applies to Primark. According to Baldwin, there has been “significant growth” in the brand’s beauty products in recent years, which bodes well for future expansion plans.
“We know the needs and wishes of our customers in the field of cosmetics; from our young customers shopping for the latest trends and getting fake eyelashes and nails, to the more mature customers looking for skin care products. As a company, we’re constantly investing in our in-store shopping experience, which also means we’re going to make it even more convenient for our customers to shop for cosmetics at Primark in the future,” he added.
Harrods also intends to expand its presence in the beauty space by strengthening customer loyalty and offering customers incentives to buy products. Through the new MyBeauty programme, linked to the Harrods Rewards initiative, customers can take advantage of a range of benefits reserved for members only. “The launch of MyBeauty allows us to engage with our passionate beauty community on a more engaged level, providing them with experiences and benefits tailored specifically to their interest in beauty and wellness,” said Collins.
The beauty industry, while highly saturated, is still an area where fashion retail is trying to gain a foothold. Bain & Company’s Levato said brands must first consider opportunities that are similar to their DNA and core to their business. “Start with products that can be upsold to customers and use space to grow your customer base. Focus on a strategy that aligns with both the brand DNA and the customer group.”
This translated and edited post previously appeared on FashionUnited.nl.