Scaling a beauty retail business is often framed as the next logical step for ambitious brands. However, due to an increasingly saturated and complex global market, growth is no longer premised on just a matter of opening more stores or striking new partnerships. It requires operational precision, strategic foresight, and a deep understanding of brand integrity. Indie beauty disruptors and heritage houses and brands are now learning that the real challenge of branded retail expansion lies not only in ambition but also in execution.
“Scalability comes down to operations and timing. For packaging and bulk filling, brands must partner with manufacturers that have flexibility to streamline products as quantities demand,” co-founder and Chief Operating Officer at Alder Packaging, Sarah Haffey, said to BeautyMatter. “For example, can they automate assembly or decoration as sales increase? [Brands need to] find manufacturers that believe and support [their] long-term vision,” she continued.
The global beauty industry is projected to reach $580 billion by 2027, according to McKinsey, with growth driven by innovation, emerging markets, and consumer appetite for premium experiences. Brands are under pressure to grow visibility and deepen engagement—especially as digitally native companies hit a ceiling online. In-store discovery has also remained a key part of the customer journey. A 2023 EWG report found that 71% of personal care consumers still prefer to explore new products in-store.
For luxury beauty brands, presence in the right physical and online spaces offers not only revenue potential but also brand legitimacy. “While not necessary, having tangible products on shelves for consumers to touch is an irreplaceable experience that can help boost sales and scaling,” said Haffer. “[With the e.l.f. Beauty and rhode acquisition], the lesson is that in order to prove your brand is ready for physical retail, your e-commerce and digital clout will be part of the story.”
The Growth Imperative
Brands that rise quickly through e-commerce or social media often find the transition to retail more difficult than anticipated. Store operations, real estate logistics, and supply chain coordination introduce a host of new challenges, making it often principal and advisable to start small and cautiously. “A scalable retail concept is one that can operate within a connected experience ecosystem. [Brands] can start small, for example, through concessions in travel retail or third-party stores, and extend through the core retail portfolio up to large-scale flagship stores—one-of-a-kind destinations that are designed to generate excitement and fuel brand love,” said Queenie Lo, President, Spatial Design of FutureBrand, to BeautyMatter.
What works in a small, curated digital experience doesn’t always scale effectively in the physical world. However, markers like localization could be a potent turnaround point. “It’s important to note that [retail concepts] are not just scalable in traditional store formats, but that they are most effective when localization can be built into the rollout program,” Lo continued. “Take Aesop, for example. It was able to nail a consistent retail signature across all markets while adapting its stores to reflect the local community and culture, encouraging customers to visit and explore each site.”
For many businesses, however, a more integrated omnichannel approach with a balance of both online and offline retail presence works best. DOUGLAS Group—one of Europe’s leading omnichannel destinations for premium beauty with a portfolio spanning e-commerce, physical stores, and a partner program—has this as one of its rudimentary strategies. “[It has helped us create] a consistent strategic expansion and continuous modernization of our approximately 1,900 stores across Europe, where around 16,600 beauty experts advise our customers daily,” Philipp Andrée, Chief Commercial Officer at DOUGLAS Group, said to BeautyMatter. “A truly omnichannel business model means omnipresence. We want to create a single world for our customers across all channels and touchpoints.”
Luxury beauty relies heavily on a consistent, immersive experience. As brands expand, maintaining consistency across locations—especially across different countries or retail partners—becomes increasingly difficult, although experts opine that flexibility can often yield great results. “From a retailer’s standpoint, expanding a brand’s retail presence is never a one-size-fits-all decision,” Stefanie von Albert, Executive Vice President (EVP) Assortment & Purchasing at DOUGLAS Group, said to BeautyMatter. “It is a strategic process that must reflect the brand’s level of maturity, its relevance to the market, and its potential to enrich a curated, well-balanced assortment.”
Beauty customers expect more than just a product. They also expect to be immersed in the brand’s world. “[Brands] need to craft retail concepts that have flexibility in their store formats, service models, and merchandising to help streamline the process—without diluting their in-store experience,” Lo enjoined.
Supply Chain Complexity and the Cost of Expansion
Operational fragility is another pain point. Scaling requires sophisticated inventory management, demand forecasting, and reliable supplier relationships. These are particularly difficult to maintain in beauty, where production sometimes involves complex formulations, seasonal launches, and regulatory compliance. “Having a centralized yet agile procurement model helps avoid delays, overstock, out of stock, and so forth,” Haffey advised. “Packaging and product customization delays [as well as] crossed wires between brand, operations, and sales can lead to delays in launch timing. Again, the solutions here are centralization and cross-alignment.”
Because supply chain vulnerability has become a major barrier to profitable growth, retailers like DOUGLAS Group have strategies like "Let it Bloom," which allows them to achieve supply chain excellence by ensuring better product availability and faster delivery. “We are establishing a network of seven omnichannel warehouses in Germany, France, the Netherlands, Italy, Spain, Poland, and Romania,” Andrée revealed. “Four of those are already in operation and three will follow over the next few years, [and] each warehouse will work as a central omnichannel hub and ship both B2B and B2C orders from one single shared inventory.”
Investor-backed beauty brands also often face immense pressure to grow quickly, sometimes at the expense of strategy. Expanding into too many doors, regions, or retail partnerships too soon can strain operations and dilute brand equity. Over-expansion without clear demand or operational competence leads to markdowns, excess inventory, and weak performance—all of which hurt long-term value.
“Not every brand is ready for an ERP [enterprise resource planning] system, but having one or two supply chain planners/operations managers who are passionate about the beauty industry is key,” Haffey said. “Most beauty brands heavily invest in marketing and innovation up front, which is also important, but if [they] do not have a strong operational backbone, [they] could be setting [themselves] up for trouble,” she continued.
In response, some brands are using pop-ups or seasonal activations to enter new markets without the cost of permanent retail. Fenty Beauty, although backed by LVMH, for example, has found success with this model, combining experiential events and limited-time installations to create buzz and test new consumer segments.
Today, the temptation to grow fast within the global beauty industry is real, but the most successful luxury brands are those that scale with restraint, intention, and discipline. They understand that retail is no longer just a channel, but an extension of identity, values, and promise. Growth for growth’s sake is no longer the goal, and in a world where every touchpoint matters, the future belongs to brands that scale not just the loudest but also the smartest.
