Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we’re up to by signing up here.
Beauty bloggers aren't just making millions—they're also completely disrupting the way that shoppers buy beauty products. A panoply of online advice and the ease of internet shopping has changed the way women shop for things like lipstick and concealer. Once loyal to sales associates and the brands that their mothers used, consumers are increasingly fickle and trend-oriented. As a result, department stores are being forced to rethink (and update) the beauty counter experience.
Nordstrom, after polling many customers on how they prefer to shop for makeup, rolled out a new "core" beauty department this past summer, giving customers the option to shop by product rather than brand. The core beauty department is currently located in two California locations, and Nordstrom will expand the concept to as many as 15 more stores by 2014.
"We conducted focus groups and worked with customers to hear about a new shopping experience," Debra Hartley-Triesch, Nordstrom's national beauty and fragrance director, told Racked by phone. "Customers now want many different ways to shop other than going to their favorite beauty counter. Sometimes they just want to discover new unique products they didn't know about, and sometimes they want Nordstrom's point of view."
Nordstrom is certainly not the first beauty retailer to run with the concept of shopping by item instead of brand: Beauty giant Sephora has long provided a curated section of top sellers and trends. But this concept is new to department stores, where shoppers, until now, found products by moseying down the rows of endless cosmetic counters. Hartley-Triesch said she would not be surprised if other department stores soon followed suit.
"Cosmetic shopping is a very different environment now," she said. "Between magazines and the Internet, there is so much information out there for shoppers. Creating this environment to shop several ways makes [it easier] for customers to discover individually."
The United States represents the biggest cosmetics market in the world, with a total estimated revenue of $54.89 billion as of 2012, according to research company Statista. Analysts foresee a steady escalation, with the industry expected to grow at an annual average of 4.2 percent until 2018, according to market search company IBISworld.
Department stores see the Internet as encroaching on their zone.The US department store industry, which includes 3,500 storefronts, has a combined annual revenue of $70 billion. In recent years, a portion of that revenue has been siphoned off by e-commerce sites. In 2010, for example, some $7.2 billion in cosmetics shopping came from online purchases, Statista reports.
Experts say there is less brand loyalty amongst beauty consumers. Photo from Getty Images.
According to Ernst and Young's 2013 Luxury and Cosmetics Financial report, the number one concern the beauty market faces today is the loss of brand loyalty as a result of the Internet.
"Growth, profitability and customer loyalty to a brand will be difficult to sustain," the EY report reads. "The new generation of connected customers, with instant access to globally transparent pricing, product comparisons and the opinions of luxury-bloggers, will make it more challenging to justify and sustain the high pricing differentials crucial to a luxury strategy."
Ann Colville Somma, who pens the beauty blog "Cult of Pretty," sees Nordstrom's new beauty concept as an adept way to tackle the decline of brand loyalty.
"Department stores now have to react to smart consumers who have less time on their hands. They need to try to make shopping engaging and fast," she said. "If [customers] are looking for a great navy nail polish because that's trendy, they don't care if it's OPI, Essie, or YSL, they just know [the shade] they are looking for. The information [online] gives customers guidance to all products, from department stores to drugstores, and customers are more open to trying new things."
Saks Fifth Avenue now allows customers to try perfumes at their fragrance bar. Photo from Getty Images.
Nordstrom's not alone in trying a new approach. In October, Saks Fifth Avenue introduced a few open-counter fragrance additions where customers could play with various perfumes. Saks also incorporated a fragrance bar where customers were encouraged to try some 25 different brands.
Barneys New York recently revamped their makeup and fragrance floor as well, changing the color scheme to white to make merchandise pop, and weeding out vendor-produced images for a more universal look.
"Most consumers are now doing research before they come in. They listen to beauty bloggers and are looking for better products," Bettina O'Neill, vice president of cosmetics and fragrances at Barneys said. "The information is out there, where as in the past they relied on beauty associates. The challenge for us retailers is to give the best customer service possible, where customers can come in and feel good and become loyal to a particular retailer."
Barneys plans to expand its digital lookbook this coming year, to provide more of an editorial voice on certain products. But O'Neill said she does not visualize a marketing tactic such as product over brand. At the end of the day, there's one thing online shopping cannot provide, and that is the indulgence that comes from shopping at a luxury retailer where beauty associates are at your beck and call.
"We are more about servicing the clients. It's less about picking up things and more about pampering the shoppers," she said. "We try to make it an experience, where the shopping is special."