Retail trends – department stores invest in beauty sales

Following on from our post about organic skincare brand, Neal’s Yard Remedies – it looks as if the iconic retailers are onto a winner as the latest retail trends suggest that health and beauty is a growing area of focus for many retailers – including major department stores John Lewis, Debenhams and Harvey Nichols.

Last week John Lewis revealed plans to expand their beauty offer by investing a further £9 million into the sector and increasing the size of their beauty halls at their larger stores in Cribbs Causeway, Cambridge and Bluewater bv 50%. Meanwhile, Harvey Nicks opened a dedicated Beauty Lounge service and Debenhams also reported rising sales in this sector. But why is it growing? And is this growth sustainable?

As fashion retail sales have been hit hard by unseasonable weather – the health and beauty sector has proven more buoyant – with people wanting make up and beauty products all year round, whatever the weather.

Sales of colour cosmetics have risen by a third over the last five years –and soap, bath and shower products have also recorded a healthy 4.3% sales increase.

Debenhams suggest that their improved sales are the result of ‘rebalancing’ their offer to place greater emphasis on non-clothing categories, especially beauty and gifting – and this tactic appears to have paid off as they highlighted beauty products as a stand-out category in their half-year results in April.

John Lewis have also identified a change in the beauty sector and responded accordingly – speaking to Retail Week, Ed Connolly, Director of Buying for Fashion explained the motivation behind their increased investment:

“Beauty is one of the best performing categories at John Lewis and a significant footfall driver, so this investment is a reflection of our ambition in this space.”

Within the beauty category, luxury products appear to be a significant driver of growth for both department store beauty counters and specialist stores. Debenhams recently reported a 16% sales increase for luxury products whilst specialist retailers like Burberry and the Body Shop have also increased their range of premium products. But in times of austerity and economic uncertainty, why is the luxury category experiencing such a boost?

Rebecca Marks, Prospect Analyst at Retail Week suggests that it’s down to emerging retail trends including ‘the kale effect’ and the rise of the leisure sector.

“There’s a whole lifestyle retail trend developing in terms of health and beauty and fitness, which means that consumers are willing to invest more.

“Retailers and brands are creating a more specialist offer and consumers are buying into it.”

However, whilst beauty sales can boost a department store’s overall sales record, Marks suggests that retailers should proceed with caution and that this is not necessarily a sure-fire route to increasing sales:

“In the short-term it’s a good way for retailers to protect themselves but you can’t rely on one sole area for growth, particularly not for the long-term.

“Typically a department store shopper will be in her 40s so one of the main reasons for retailers to invest in beauty is as a means of drawing in a younger customer.”

Fashionable brands aimed at younger shoppers, such as MAC and Urban Decay have helped to entice new customers into stores such as Debenhams. Marks asserts that the trick now is to encourage them into other departments, once they are through the doors. Perhaps by placing fashion mannequins beside the beauty counters, to signpost them towards the clothing department. So that as department stores develop new ways to position themselves as destinations rather than simple stores, beauty can be seen as first step to enticing quality footfall into all of their departments.