Published
Aug 21, 2017
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Macy's implements new strategy to save its struggling cosmetics department

Published
Aug 21, 2017

On the heels of a Q2 sales decline, struggling department store Macy's continues to strategize, aiming to creatively boost sales. These initiatives include restructuring its cosmetics department, which has reportedly been among one of the weakest categories in the second quarter, having seen shrinking profit margins.
 

Macy's experiments with new strategy to boost beauty sales - Macy's



While cosmetics, skincare, fragrance and hair products are notoriously known as traffic drivers in the retail world, Macy’s — among other department stores in the luxury and discount arena — have experienced a significant loss of market shares due to the rise in popularity of singular beauty retailers such as Ulta Beauty and Sephora. While Macy’s sales were sinking, Ulta’s comparable sales were up 14.3 percent. Shoppers may finally be over the old-school department store concept where they are guided by the employees versus having the freedom to browse and choose on their own.
 
With that in mind, Macy’s has been testing an “open sell-selling” approach that’s more favorable for the shopper. To get the ball rolling, Macy’s is attempting to incorporate products from luxury beauty chain Bluemercury into several of its stores — the department store purchased Bluemercury in 2015 for $210 million.

As of recent, only 20 out of 650 Macy's stores have a Bluemercury, but that’s expected to change. The open-selling format has already been implemented within Macy’s women’s shoe department and fine jewelry, so the company is optimistic that the strategy will be successful within its cosmetics department, too, providing the employees are properly trained on the open-selling concept and the copious new brands that will be introduced.
 
Another piece of the strategic pie is that Macy’s is implementing a new loyalty program in October that was specifically designed to drum up business in the beauty department. It remains to be seen whether or not it will be successful when strong competitors like Sephora and Ulta have already mastered this process.

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