Nordstrom launching 'natural beauty outposts' to capture cosmetics niche
Nordstrom this month will introduce “natural beauty outposts” in 46 locations nationwide (including Los Angeles, Scottsdale, Dallas, Charlotte, Chicago and Seattle), with more to come in stores and online, Racked reports.
The Nordstrom outposts curate cosmetics products that are paraben-free, sulfate-free and phthalate-free. The selection includes some items already available from the department store chain and others newly introduced for this effort, according to news reports.
The retailer also announced KPOP-IN@Nordstrom, a three-part series of pop-ups curated by Olivia Kim, Nordstrom’s vice president of creative projects, spotlighting Korean fashion and beauty brands. Featured brands include Korean eyewear line Gentle Monster.
As department stores struggle, beauty is emerging as a dependable category, with the global demand for organic personal care products in particular expected to reach $13.2 billion by 2018, up 9.6% from the $$7.6 billion in sales in 2012, according to Transparency Market Research. (Nordstrom itself is touting that stat, according to Racked.)
There’s plenty of competition in the space: Fast fashion retailer H&M is devoting more space to cosmetics, low-cost e.l.f. is planning more brick-and-mortar stores after its $114 million initial public offering last year, beauty retailer Ulta continues to rack up sales in stores and online, and drugstore beauty sales and J.C. Penney’s Sephora concessions are offsetting tepid sales in other areas of their respective retail operations.
Nordstrom has suffered some of the ills besetting rival department stores, though it’s operating from a stronger position than most, thanks to its stellar customer service and what Shelley E. Kohan, VP of retail consulting at store analytics firm RetailNext, calls its “design thinking.”
“They put the customer in the center, and they think, ‘How does this impact the customer?’” Kohan told Retail Dive last year. “I think they constantly say, ‘How do we remove pain points?’ A good example is when they recently announced that they’ll take back returns from full-line stores at their [off-price] Rack stores.”
Nordstrom also appears to be more careful about the slimmer margins wrought by e-commerce, with executives saying they’re eliminating lower-performing merchandise for sale online and streamlining logistics. The company has also shaken up its tech team, most recently letting chief technology officer Kumar Srinivasan go after less than a year on the job.
Nordstrom has additionally focused on pop-ups as a way to offer specially curated merchandise for limited time. Many of Olivia Kim’s projects include pop-up boutiques featuring merchandise by high-end brands with more of an edge than Nordstrom's typical fare, and the “pop in” events tend to garner “hurry up and go” attention from fashion magazines and blogs. The pop-ups fit with what Nordstrom co-president Blake Nordstrom says are essential aspects of the retailer's overall strategy to beat back the doldrums department stores find themselves in these days.
"We want to make a statement with our stores in these markets and identify them as destinations for fashion, style, art and culture,” Kim said last year. “Our customers are really curious and educated about fashion, and part of our goal … is to create a platform to introduce our customers to this side of designer fashion — this place where the directional collections or up-and-comers have a place to live and grow.”
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