by Elisabeth King
The department store beauty business today is a bit like an adventure movie. Lose your way and you risk getting lost in the wilderness. Competition has become intense with cosmetic sales being siphoned off by the explosion of speciality and concept stores, e-commerce and even fashion retailers venturing into cosmetics. But the formula for staying on top remains much the same as in the past, relevant brands and products that are well-positioned and marketed, says Gillian Ridley Whittle, Group General Manager Cosmetics & Lingerie for Myer.
Myer is the number one prestige beauty retailer in Australia, she notes. “The market is in an amazing period of transition. There’s heavy competition from specialist retailers such as Sephora and Mecca, but our longterm strategy is to lead from the front. To develop a vision of who we are, what we do best and where we want to be”.
Australia’s largest department store chain is well on the way to achieving this goal. The “New Myer” strategy was launched in September 2015. A five year plan, backed by $600 million worth of investment, the main aim is to focus on the company’s top-performing stores and most valuable customers. Core initiatives include advanced data analytics of Myer’s customer base to build a more accurate profile, customising inventory according to store catchment areas, the introduction of more ‘dwell’ areas such as eventing spaces and cafes in priority stores and driving e-commerce.
The revitalisation plan has already paid off. Myer more than doubled its full year profit for the 2016 fiscal year to $60.5 million. Sales in flagship and premium stores in NSW increased by 5.6 per cent.
The first store to showcase the New Myer strategy was Warringah Mall in Sydney, which opened its doors in November following the shopping centre’s nine-month, $310 million overhaul. Sprawling over 14,000 square metres, the revamped Myer store is reaching out to 40,000 customers in its catchment area and 11 million annual visitors.
We are really pushing the envelope in the Warringah store, says Ridley Whittle. “It contains the first local rollout of Chanel’s new boutique storefront, previously trialled only in Hong Kong and Korea. Customers can walk through and test products rather than being served at a single counter. Over 60 new brands were introduced to Warringah, including leading beauty and fashion names such as Mecca, Benefit, Topshop/Topman and Seed. Myer Warringah is also home to our first men’s barber and grooming service”.
Cosmetics have become one of Myer’s best-performing categories over the past two years, routinely delivering consecutive quarters of growth year-on-year. The $400 million redevelopment of Pacific Werribee in Melbourne was opened last August. It’s in a rapidly growing area with a younger-skewing demographic, says Ridley Whittle. “The new store design, brand mix and services have been customised to what we know our Werribee customers want. We introduced M.A.C, for example, and the brand has exceeded expectations”.
Apart from the strong performance of the newly refurbished lifestyle stores, Myer is introducing a new approach to beauty across its network. Niche didn’t reach their full potential in the early Noughties when Mecca opened concessions in David Jones. But with the success of Sephora concept stores in JCPenneys in the US and the huge popularity of hip niche brands among younger consumers, Myer has rolled out Mecca concept stores in eight select locations, says Ridley Whittle. “It’s not a matter of either/or. Mecca offers a different service proposition and brands that complement what we are doing”.
In fact, the size of the prize is considerable for major retailers such as Myer who are creating a new model for selling the whole spectrum of beauty brands. “We do very well with top prestige brands such as Chanel, Estée Lauder, M.A.C and Dior”, says Ridley Whittle. “But we are constantly on the lookout for new brands. Not just prestige but up-and-coming brands. A whole host of new brands have hit Myer counters this year from local ones such as Hunter Lab, the natural skincare brand for men, and the internationally successful Alpha-H, with its global anti-ageing bestseller - Liquid Gold. Korean beauty brands are very much in demand and we are stocking several, including Saturday Skin”.
The global shopper has become very important to the continual increase of Myer’s beauty business. Spending by Chinese tourists visiting Australia is forecast to reach $4.1 billion this year and cosmetics are high on their shopping lists, according to a report by CBM. “We have seen huge growth from international shoppers in our flagship stores in Sydney and Melbourne”, says Ridley Whittle. “They are very discerning buyers. As with all our customers, we aim to be relevant in a way that surprises consumers, not just satisfies them”.
Major changes are afoot all over the world in terms of how new prestige and niche cosmetics, skincare and fragrances will be sold now and in the future. World-famous retailers across the globe are busy trying to figure out all sorts of new configurations and ways to appeal to customers with virtual makeovers, computerised skin analyses and a constant flow of new brands and products.
To succeed you have to stay ahead of the rest of the pack, says Ridley Whittle. “People are changing the way they shop yet it’s important to be more - not less - personal as a retailer. We have been honing what the Myer beauty offering stands for. Earlier this year in our beauty event, we showcased the “Here I Am” message as a glimpse of where we are going. It was all about self-truth and democratising beauty. We had bellboys giving out random acts of kindness gifts and curated beauty boxes to customers. In addition to this, we held Beauty Masterclass workshops in our flagship Myer Melbourne and Myer Sydney stores. Customers could book tickets for sessions with such leading brands as Elizabeth Arden, Bobbi Brown, Dior, M.A.C, Jurlique and Benefit”.
With her extensive experience as a senior retail executive in the UK and Australia, working for Marks & Spencer and Target, Ridley Whittle has been guiding the reinterpretation of Myer’s new approach to beauty since May last year. Her challenge is to balance everything and keep moving forward. Today’s beauty environment is so competitive, if you stand still, you’re going to lose ground, she notes.
So you have this brand/product that you love like your own child and you feel you have been working 24/7 to get attention. You have invested lots of money and time in packaging, typing up posts, sharing the products with friends, meeting with retailers and distributors and you feel you are still not getting any traction. What do you do next?
The growth of social media has given rise to influencer marketing, now one of the fastest growing categories in advertising and projected to be a $5-10 billion market by 2020*. A larger percentage of the advertising dollar being invested into this component of the marketing mix naturally means greater pressure on marketers to deliver meaningful results from this medium. There is now an emphasis on conducting due diligence when planning your influencer campaigns, especially around your influencer selection, and in particular their followers.