Beauty bound

Beauty bound

Shoppers Stop has launched its first standalone beauty store SS Beauty in Malad, Mumbai. By March, the retail chain, owned by K Raheja Corp, plans to launch two more stores, one each in Mumbai and Ludhiana, and 12 more in cities like Delhi and Kolkata in the next financial year. All of its 80 stores in the country have a dedicated beauty section. Besides, it also operates standalone stores of MAC Cosmetics, Estee Lauder, Clinique, Bobbi Brown, Jo Malone, and Too Faced in the country.

The beauty and personal care market in India was valued at around $15 billion in 2021, and is likely to grow at a CAGR of 8% over the next five years, according to Euromonitor. 

Growth mode

Spread across 2,000 sq ft, the SS Beauty store in Malad has trained beauty advisors to assist and offer suggestions on make-up and beauty products. Focussed on the premium beauty space, the store houses over 200 beauty brands, including Kora, Caudalie, Jeffree Star Cosmetics, Bobbi Brown, and Parfums de Marly. The company plans to launch a dedicated website and app for SS Beauty in the next few months.

“Currently, the beauty segment contributes around 17% of our total sales. We are observing growth in this segment across all our channels; hence, we believe that SS Beauty stores will give us the opportunity to grow faster,” says Venu Nair, MD and CEO, Shoppers Stop.

Shoppers Stop launched its private label in the beauty space, called Arcelia, last year, which comprises a bath and body care range, and fragrances and deodorants. The brand plans to add nail paints this month, followed by lipsticks and other make-up products.

The company also launched two private label brands in the apparel segment — Insense and in.fuse. Insense is a women’s sleepwear and loungewear brand, while in.fuse is an online-only brand that caters to menswear, womenswear and kidswear. “Private labels currently contribute around 14% of our overall sales. We intend to grow this to 20-25% in the next two years. Apart from our stores and website, private label brands are also available on Amazon,” Nair says.

Private labels give retailers better control over pricing and inventory. “They offer margins as high as 50%. They bridge the price gap between what the customer is willing to pay and what the big brands are charging,” says Sanjesh Thakur, partner, Deloitte India.

Further, the retail chain aims to consolidate its offline presence by launching 12 stores by FY23. The online channel, Nair says, has grown in the past year, and “currently contributes 6% of total sales, compared to 1.5% in FY21”.

Market potential

Analysts say, one compelling reason to venture into this business is the associated higher margins compared to those in the apparel category. “The gross margin in this segment is around 30%; there is also a recurring demand observed in this category, which makes it an attractive segment to invest in,” explains Thakur.

But players like Shoppers Stop may find it challenging to compete with the discounts offered by online marketplaces such as Amazon, and the mass, premium, and private label offerings of specialist retailers like Nykaa and Purplle. Direct-to-consumer brands like SUGAR Cosmetics and MyGlamm, too, have gained traction over time. “Reach would be another challenge as online players have better capability in terms of catering to customers in tier II and III cities, compared to offline players with limited stores,” says Neelesh Hundekari, partner, Kearney.

To stand out, analysts say, retail chains could make use of AR in stores for trials, and personalisation. Crafting bespoke products through digital consultations based on skin textures and lifestyles, and offering beauty regimens instead of standalone products could draw customers.

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Check the source here –Source, Financial Express.