Inside Department Stores’ Plans to Bring Beauty Customers Back

It was a bit like seeing an old friend who was also clearly a zombie — a mix of familiarity, affection and horror — when makeup label Hourglass resurrected the iconic department store Barneys New York this fall to celebrate its 20th anniversary.

The activation, which served as a nod to Hourglass’ original launch on the beauty floor of Barneys’ Madison Avenue store, may have been an event worth celebrating, but ultimately served as a reminder of how far the department store beauty counter has fallen.

When Hourglass debuted in 2004, the Barneys seal of approval could turn a brand into an immediate hit. Cut to 20 years later, Barneys is gone, and surviving department stores have ceded much of their beauty-selling cachet to e-commerce, social media and most of all, specialty retailers like Sephora. Specialty brands generate, on average, 10 times the sales value of department store brands, according to beauty retail consultancy Headkount. That’s why many companies are concentrating their sales force toward the former and away from the latter, “because the volume opportunity is worth their investment,” said Paula Floyd, the founder of Headkount.

“If you know you’re going to do $20 million at Sephora, but you’re going to do $2 million at Nordstrom, where would you put your people?” she added.

But while the department store beauty counter may no longer be the most important selling channel, it’s still a destination for both luxury customers and the brands hoping to appeal to them. Retail foot traffic has returned to pre-pandemic levels, according to a recent report from real estate firm CBR report, and some department stores have seen better lifts in foot traffic than specialty stores like Ulta Beauty and Sally Beauty Supply, says data from traffic insights firm Placer.ai.

In the weeks before Christmas, that traffic is set to more than double. But as shoppers return to the department store beauty counter — some for the first time in years — they will find it in the midst of a makeover. Retailers are renovating their beauty floors to put their most luxurious offerings forward, alongside activations and other in-store events as they hope once again to capture the attention — and wallets — of shoppers that have spent the last decade shopping elsewhere.

“I don’t want them to die,” Floyd said. “But they need to do things differently.”

The Beauty Experience

Though department stores’ polish has faded, beauty brands still want to be stocked there.

The touch-and-feel aspects of the beauty counter are effective in driving purchases. The skincare label Rodial, for instance, sells more than 10 bottles of its pricey Bee Venom Serum at the counter for every one it does online.

And they have name recognition: Upscale fragrance brand Perfumehead launched its first collection at the insider-favourite speciality retailer Violet Grey, but was elated to be approached by Nordstrom, which was looking to add to their stock of “cool, cult, niche fragrance brands,” said founder Daniel Patrick Giles; likewise, the brand wants a shot at Nordstrom’s customer base, which is demographically diverse, high-value, and eager to shop.

Department stores also have more square footage than speciality retailers, which gives brands more room to create experiences for customers. The plastic surgeon-founded label 111Skin, which entered Harrods after a buyer organically discovered the line, was able to use one of the London retailer’s treatment rooms to offer facials and other treatments. This year, it launched in Nordstrom, Neiman Marcus, and Bergdorf Goodman, offering treatments at all three retailers.

Still, department stores know they have to evolve their beauty shopping experience to have a shot at being competitive in today’s market. As such, some, like Macy’s and Harrods, are renovating their beauty floors (and associated programming), around the concept of “experiencing” a beauty product, rather than merely sampling it.

Nicolette Bosco, head beauty buyer at Macy’s Inc., said the company is renovating beauty floors across the country over the next few years, with 42 locations already elevated. At the Miami Dadeland store, luxury brands such as Tom Ford and Chanel moved to the the front, and off-the-floor relaxation and treatment rooms from labels like Clarins and La Mer have been added.

“We’re looking to have always-on eventing onto our floors, and then really big, wow, mega-moments as well,” Bosco said, pointing to a recent installation at Macy’s 34th street flagship; a spherical pod that, with the help of a headset, was meant to transport visitors to the Japanese region of Wakayama, allowing them to feel the wind and smell the key ingredient in Shiseido’s Future Solution X Perfecting Cream.

The pod was planted by a London-based firm called Xydrobe, who also unveiled a 20 seat “VR cinema” at Harrods earlier this year via a partnership with the watchmaker Vacheron Constantin. Isabella Gallucci, Xydrobe’s co-founder and chief brand officer, said the company hopes to “rejuvenate the retail experience.”

Just about every department store will host “masterclasses” throughout the holiday season. Harrods shoppers can attend a La Prairie massage workshop or a winged eyeliner tutorial; Selfridges will host demos with Fenty Beauty and Kylie Cosmetics, and a wreath-making class with Chloé. These events draw people into the store, but more crucially expose these beauty collections to particularly engaged shoppers.

But retailers should be careful never to take customers too far from the beauty floor, warns Floyd. Prior to founding Headkount, she worked at Benefit, and fondly recalls the success of counterside eyebrow appointments. “It’s an amazing experience,” she said, but “as soon as you go in a back room, you’ve taken away [the opportunity] to showcase it in front of passer-buyers.”

Changing Faces

Another noticeable change to the department store beauty counter: The people visiting and working them.

“Consumers, when they’re coming in, they are very knowledgeable. They have already seen the trend. They know what they’re looking for,” said Bosco. And department stores have work to do to convince shoppers that they have the information they’re seeking: Just 24 percent of shoppers go to a department store to learn about new products, compared to 71 percent that go to Sephora or Ulta, according to a survey from software firm PowerReviews.

Macy’s has developed an internal platform, the Beauty Playground, that provides advisors with digital trend reporting and internal product education directly from brands. On the other side of the conversation, Nordstrom launched a pilot program in six stores this fall with displays serving new products and brands to Gen Alpha and Gen-Z shoppers. “Self-service is important to them,” said Debbi Hartley-Triesch, executive vice president and general merchandise manager of the retailer’s accessories and beauty divisions. Both retailers will host education sessions and beauty services at counters during their respective pre-holiday events; Nordstrom’s Holiday Beauty Glam Up Days and Macy’s Give A Little Glam event.

Department stores are also leveraging their relationship with fashion brands. Nordstrom will exclusively host the launch of Christian Louboutin’s new fragrance collection, Fetiche, during the holidays, and the New York flagship will also add new counters for Hermes, Dolce & Gabbana, and Carolina Herrera by the end of the year. Floyd said there’s more opportunity to merchandise across fashion and beauty.

“The trend areas of apparel, in your denim shops… if they tie that in with beauty, bam, I’d buy it in a second,” she said.

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Editor’s Note: This article was amended on Nov. 4  2024 to clarify Macy’s Inc.’s renovation plans for its nationwide beauty floors.