Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/803877
S T O R E F R O N T S 20 S C T / A P R I L 2 0 1 7 B luemercury is the nation's largest and fastest-growing vendor of luxury beauty products. The chain, which Macy's, Inc., acquired in 2015, operates 120 stores nationwide, and 40 more are scheduled to open this year. SCT spoke with COO Barry Beck, who co-founded the business with his wife, Marla, the company's CEO. Beck discussed the store's genesis, his retail strategy and why Starbucks is a must- stop on all his scouting missions. How did you come up with the concept? One day Marla and I were walking down the street in Georgetown, when we came across an independent beauty boutique. In 1999 this was a very novel idea. At the time, virtually all cosmetics were sold in one of two locations: the drugstore or the department store. I knew from my mother and my sister that people weren't satisfied with this arrangement. Drugstores only had mass brands, and the department stores were not in convenient locations, and you had to shop counter by counter. My mom once told me of an experience she had at the Bobbi Brown counter, where the sales lady was at lunch and the lady at the next counter couldn't help her. When we came across this boutique, I saw an Growing beautifully Macy's-owned beauty brand Bluemercury plans 40 more stores this year By Beth Mattson-Teig opportunity. We decided right then that we were going to roll out a chain of national beauty stores. How do you choose your store sites? Before I go to look at any retail site, my team inundates me with data: Data about demographics, ring analyses, home prices, psychographic behavior. But I take more of an anthropological approach to site selection. I try to understand who my customers will be two, five years down the road and what their behavior will be like. Then, before I commit to any location, I spend two days in the city, and I try to become that customer. I think: Where would I live? Where would I shop? And how convenient is [the site] to my life? In every city we are considering, I do this thing I call the Starbucks test: One of the first things I do on a site visit is go to the nearest Starbucks, order a coffee, sit down and see if my clients are there. You have said that you believe there is room for a Bluemercury store every 15 city blocks. How does that work? With site selection, I follow what I like to call a land-and-expand real estate strategy. I'll come into any market, drop in a store and see where our customers live and work. From there I'll expand. We might get up to 10, 12, 14 stores in one small radius. We don't see a cannibalization of sales with this strategy. Instead, we're seeing this sort of halo effect: With so many stores, we have a lot more brand recognition. People know, "Oh, that's the place I go to buy makeup." For instance, we opened up our 96th store in Cathedral Commons, which is one mile away from our original location in Georgetown. That store is growing at 200 percent above my projections. You are a strong believer in hyperlocalization. Can you explain what that means in terms of Bluemercury's operating philosophy? Part of our real estate philosophy involves embedding ourselves in our clients' lives. We are in the neighborhoods where our clients live and work. We make it easy for people to go out, grab a cup of coffee, go to the grocery store and grab a new lipstick. But it's not just about the lipstick. We want to be part of our clients' lives. We want customers to pop in, after they are leaving Equinox, and say, "I've got this blemish — can you fix it?" How do you view the future retail landscape? As our world population marches from 6 billion to 9 billion people — and traffic becomes disastrous — people are never going to want to leave their neighborhood. This intense clusterization of people will drive even more neighborhood shopping. Smart retailers are going to realize that physical stores are actually their most powerful assets. The ones that have great customer experiences are not just going to survive, but also thrive. I've never opened more stores than I'm opening this year. My 2016 vintage of stores was my best-performing in the history of the company. If retail is dead, we are not seeing it at Bluemercury. n