What Beauty And Technology Have In Common — And Why It Matters For Multi-brand Retail

When you think about everything you might buy as a consumer, and how similar or different those products are, what comes to mind as being on opposite ends of the spectrum? How about lipstick and phones? They don’t seem to have much in common, do they?

Now, think about how and where they’re sold.

Consider NordstromJWN
, Bloomingdale’s, and Sephora. Picture their cosmetics floors or navigate to their web sites and take note of the brand overlap you see. Clinique, NARS, even Yves Saint Laurent appear at all three stores. More than half of the beauty brands and individual items sold at one of these retailers are sold at the others — and it’s a similar story at Saks Fifth Avenue and Neiman Marcus. Even Ulta BeautyULTA
has joined the fray, winning increased prestige brand distribution in recent years.

Next, consider the options you had last time you were in the market for a new smartphone or tablet. If you were buying through your carrier, be it Verizon, T-Mobile, or AT&T, you probably could count on your options being similar; these companies all would’ve had the latest devices from the dominant manufacturers, such as AppleAAPL
and Samsung, which collectively make up 86% of the US smartphone market. Of course, Apple and Samsung have their own stores which, except for occasional exclusives, stock the same phones and tablets as their carrier partners.

So, why would a consumer choose to buy a beauty formula or a technology device from one store instead of buying the same item from another store, and what does this mean for the products or services any multi-brand retailer whose selection overlaps with another one’s is selling?

1. Location is critical: Is the retailer in a spot – on the physical street and on the figurative one (digital channels spanning web, mobile, third-party apps, and wholesale) – where it’s easy for target customers to spot it and convenient for them to visit? Are the right forums for communication readily available?
2. Money talks: What’s the price? Not just the MSRP, which may the be same as at competitors with a similar selection, but what is the customer paying after various incentives and promotions, spread across time, including the value of loyalty programs and gifts with purchase?
3. Differentiation makes it… different: If a retailer is selling a brand also available elsewhere, is there an angle to negotiate an exclusive run with the vendor, such as a size or color competitors won’t be able to carry? Either way, how can marketing efforts pay off by talking about the product or service in a way – or on a platform – that’s unique to one company and distinct from any other?
4. Environment matters: How is the store – again, both physical and digital – designed and what does it say about the product being presented? Can customers find it? Is the experience pleasant? Is it so compelling that customers will visit even if they’re just browsing? At Verizon, the retail experience team I led spent time re-envisioning omnichannel conveniences and piloting Verizon Express stores to deploy those new customer journeys in streamlined ways.
5. Service sells: What does the team – humans working in stores or service centers – add to the experience? Are they helpful or are they focused on upselling? Do they guide shoppers to the right product for them? Can they provide tips and tutorials in a way that competitors aren’t? Can they deploy live technology to do this? Bobbi Brown’s own e-commerce site sells the same merchandise as its wholesale partners, but offers augmented reality makeup try-ons that many of the latter don’t.
6. Follow-up is memorable: Post-sale, what’s the marketing and support provided that’s worthy of repeat business in a commodity category?