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Department stores making themselves over in beauty battle

Anne D'Innocenzio, AP Retail Writer | 6/1/2018, 7:32 p.m.
It's the beauty aisles themselves getting makeovers now.
Cosmetic products are displayed inside the new Christian Louboutin space at the revamped second floor devoted to beauty at Saks Fifth Avenue in New York. Department stores are being forced to rethink how they sell higher-end makeup and perfume as competition intensifies from discounters like Target, specialty chains like Sephora and Ulta and online brands. (AP Photo/Bebeto Matthews)

NEW YORK — It's the beauty aisles themselves getting makeovers now.

Department stores are being forced to rethink how they sell higher-end makeup and perfume as competition intensifies from discounters like Target, specialty chains like Sephora and Ulta and online brands. So stores like Saks and Macy's are promising workouts for your face, augmented reality and beauty treatment concierges as they try to attract millennial customers and make the cosmetics aisles more of a destination than a stopover.

To expand its beauty area to the size of a typical grocery store, Saks Fifth Avenue's flagship location is even bumping cosmetics from its position near main-floor entrances to the second level, breaking from a century-old tradition in retailing.

"Department stores have to reinvent themselves, and that's not an easy thing to do," said Larissa Jensen, an analyst at NPD Group, a market research firm. "Everyone has an eye on beauty. It's an area that consumers continue to be excited about."

But shoppers are changing the way they buy beauty products, fueled by social media, the explosion of new trends and emerging brands. Customers want to experiment with products beyond the brands to which they're loyal. And with information online, they're more knowledgeable when they approach the cosmetics counter.

Specialty chains like Ulta and Sephora overtook department stores by share of the U.S. beauty and personal care market in 2009, according to research firm Euromonitor International. By last year the specialists had more than 15 percent of the market and department stores fell below 9 percent.

Department stores, already trying to keep customers coming through the doors, are freshening up the face they present to shoppers.

Saks Fifth Avenue has expanded the beauty section at its New York flagship by 40 percent to 32,000 square feet. It has 15 treatment rooms for services like getting your back fat frozen or workouts for your face to combat sagging. It offers complimentary services like mini-facials, with a concierge to greet customers and help book appointments.

Meanwhile, Macy's is allowing shoppers to experiment more with products and letting beauty advisers step away from the counter to help them. It also has areas that focus on specific categories like mascaras or highlighters that include many brands. And it's featuring augmented reality technology in a cluster of stores for shoppers who want to experiment without trying everything out. Stores like Neiman Marcus and Nordstrom, meanwhile, are creating hubs of the latest trends and beauty products.

J.C. Penney, still scarred by a disastrous makeover a few years ago, has been expanding its highly successful partnership with Sephora and will have those shops in 75 percent of its stores this year.

"We are all thinking of new ways to innovate," said Nata Dvir, Macy's general business manager of beauty.

Sephora and Ulta had already shaken up the longtime pattern of shoppers going to department stores and talking to advisers for higher-end products or finding low-priced offerings at drug stores.

Both chains have expanded rapidly, multiplying the number of places shoppers can test makeup and get tutorials. And Sephora in particular has been ahead in adopting technology like using facial scans to find foundations and concealers to match a person's skin tone. It was the first beauty brand to adopt chatbots, according to research firm CB Insights.