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Published July 28, 2017
Published July 28, 2017
Dayne Topkin via Unsplash

If it’s still a mystery why Sephora is killing it in one of the toughest retail environments we’ve seen, well, here’s the reason—constant innovation. After having just launched their largest store (11,300 sq. ft.) to date last April on 34th Street in Manhattan, last week they opened their smallest (2,000 sq. ft.) boutique-format store at 88 Newbury Street in Boston. Sephora is not sitting on their laurels. They’re now looking for expansion in Bluemercury and Space NK territory—the neighborhood beauty store.

Coincidentally, the same week Sephora went small, Bluemercury went big. The Macy’s Inc.-owned retailer opened a flagship in the base of the New York Hilton Midtown on Sixth Avenue. Conceived as an innovation hub and technology launch pad, this 2,700-square-foot store format is the largest to date and contains a dedicated spa room. As Sephora needed to take a heavy edit in merchandising, the Bluemercury new flagship will carry the largest assortment to date and launches the integration of technology into the store experience.

While the media continues to beat the “retail apocalypse” drum, and many national chains, including Bluemercury’s parent company Macy’s, are closing stores, Sephora and Bluemercury have aggressive expansion plans. New beauty retail doors based on innovating the brick-and-mortar experience bodes well for the beauty industry. Retail expansion means growth for the brands on the shelves at these retailers.


Location: The very DNA of Bluemercury is rooted in neighborhood, having launched their first two stores in Georgetown and Dupont Circle in Washington DC. Their expansion to date has focused on bringing luxury beauty out of the mall and onto Main Street through customer-centric neighborhood stores. The choice of the New York Hilton Midtown as the home of a flagship was done with an eye towards building a brand with household name recognition.

Sephora’s real estate choice on Newbury Street in Boston aims to capture the essence and spirit of neighborhood shopping. They have plans to open 80 Sephora Studio concepts across the country, with Williamsburg in Brooklyn, Hoboken in New Jersey, and Bluemercury’s hometown of Washington, DC already in the works.

Store Size: The launch of the Bluemercury flagship is only slightly larger than the Sephora Studio format and is not the largest-format store in the Bluemercury chain. However, we all know bigger isn’t better—it comes down to what you do with and in the four walls, not necessarily the size.

Vibe: Sephora stores have evolved into doors that make a big statement with large storefronts, high energy, loud music, and bright lighting. The small-format store attempts to blend into its environment to create a quieter, more intimate shopping experience. The Bluemercury flagship feels simply like a super-sized version of their existing store formats with home interior–inspired design and a consumer-centric experience.

Technology: Sephora is taking an invisible technology approach with seamless integration to aid the beauty advisors’ ability to customize products, create individualized experiences for consumers, and facilitate relationship building. They’ve also developed a technology solution to address the highly edited product assortment in these smaller-format stores.

Although the flagship is intended to be the innovation hub and launch pad for new technologies for Bluemercury, their integration of technology is in the nascent stage. This store is the first in the chain to launch Beauty Connect, magic mirrors which will be a source of education, point of sale, and soon-to-be augmented reality tool.

Merchandise: The larger footprint allows Bluemercury to launch new brands Christophe Robin, Jillian Dempsey, and Soleil Toujours, and expand their product assortment to the largest to date: 80 brands, 8,000 storekeeping units. However, their expansion plans seem to be tied to big mainstream brands. An investment will be made in expanding the Jo Malone interactive store concept, and they will increase the number of doors carrying Chanel from 14 to 30 this year.

Delivery: With the opening of Sephora Studio, they’re debuting new delivery options—order in-store, and same-day pickup—making the full chain product assortment available to consumers shopping in the smaller-format locations. Bluemercury also opened their new door with enhanced delivery options: same-day, under-one-hour delivery in New York. Enhanced delivery is a service that will eventually be rolled out across the chain in select markets.

Customer: This new format is Sephora’s response to customers’ desire for small, curated neighborhood retailers rather then big shopping malls. This smaller store also comes with a hyper-focus on old-school customer service (clienteling) aided by technology. Bluemercury on the other hand sees their flagship as the vehicle that will catapult them from best-kept neighborhood secret to global brand by leveraging the 1.2 million international visitors that stay at Hilton each year.

In Their Words: “We picked Newbury Street because it is a classic neighborhood shopping street,” Calvin McDonald, CEO of Sephora Americas, told Fast Company. “There are streets in cities all over the country that are just like this, where people like to take a stroll on the weekend to pop into little boutiques.”

“For 18 years, Bluemercury has been a best-kept secret — it was a neighborhood store … [and now we’re] transitioning from best-kept secret to a luxury brand and a household name,” Barry Beck told WWD. “I think the Hilton [location] catapults us to the next level. Now all of a sudden we’re an international brand. There are more than 1.2 million international visitors at the Hilton every year, it has 1,980 rooms. It’s the largest hotel in New York.”


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