Amidst news of volatile stock markets, and job and real estate reports arose positive statistics for U.S. retailers in 2011. U.S. retail and food services sales were up 8% July 2011 through September 2011, as compared with the same period the prior year, according to the U.S. Census Bureau. Health and personal-care store sales in particular rose 4.5% in the same time range.
While retailers—and the rest of the country—hope the worst is behind us, a new economic landscape with new rules of engagement is emerging. Specifically in the beauty industry, retailers must navigate a world with increased competition, more discriminatory customers and thinner wallets. It is a challenge, but successful beauty retailers say it is not an impossible mission.
“The beauty retail game has changed greatly,” comments Michael Batt, president of Beans Beauty, a retailer with four brick-and-mortar locations in Pennsylvania as well as a strong Internet presence. “The smaller beauty retailer is working much harder to vie for business.” He says business traditionally clinched by small beauty supplies has been lost to drugstores and supermarkets carrying diverted brands, as well as to bargain hunters on the Internet.
“Everyone has gotten into beauty,” agrees Dominick Costello, president of Ricky’s NYC, a regional beauty-store chain with locations primarily in New York City. Costello has seen increased competition from online sources, as well as the eagerness of largely apparel retailers, such as JCPenney, to jump into the beauty arena. “There’s a lot of fanfare about the beauty industry and how it’s growing. It will grow, but it is highly saturated,” adds Costello.
Despite increased competition, savvy beauty retailers still have a chance to survive—and even thrive—in today’s environment. San Francisco Bay Area beauty-retail chain Peninsula Beauty, for example, has remained profitable throughout the challenging economic environment, and has even seen sales grow 6% in 2011 as compared to the prior year, says Jerret Schaar, chief operating officer.
Peninsula Beauty’s growth hasn’t happened by chance, but is the result of a multifaceted strategy well executed by its leadership. “Beauty consumers have more choices than ever. We have to deliver more value in our offers, more smiles from our sales staff and more solutions to our customers’ beauty problems. Even though we sell tangible products on the retail floor, we have to think about selling our service and product knowledge just as much as the physical products,” Schaar says.
Successful beauty entrepreneurs offer proof that the future can still look bright for today’s small beauty retailers. We’ve asked several experts to provide advice on how to effectively manage a beauty store in a difficult economic marketplace. Here is what they have to say.
[Image: thinkstock.com/Hemera Collection]