Photos: Riley Rose/Instagram
Is a standalone beauty concept the right plan for Forever 21?
Beauty is the saving grace of at least one major mall retailer these days. Sephora’s store-within-a-store concept is widely renowned as J.C. Penney’s most popular draw. Now another mall retailer is trying its hand at beauty with a standalone concept.
Apparel retailer Forever 21 is piloting a beauty-centered concept called Riley Rose in 13 shopping centers nationwide, according to CNBC. In addition to the stores, Riley Rose will launch its website in November. Riley Rose will face competition from established retailers like Ulta, Sephora and Bluemercury.
Forever 21 is not the only mall retailer that’s recently begun looking for some reinvigoration from the beauty market.
Macy’s, more closely following the J.C. Penney/Sephora model, has begun to open store-within-a-store concepts of its upscale beauty chain Bluemercury within its full-line stores, according to Fortune. There are currently 20 Macy’s locations that include Bluemercury shops and more are planned.
Reports of Macy’s increased reliance on Bluemercury comes after an announcement earlier this year that both Macy’s and Bloomingdales were dropping their prices on cosmetics to increase traffic — a move analysts warned is often unsuccessful in the long-term.
Ulta has yet to pursue store-within-a-store relationships, but has begun to expand in a new direction — it’s moving urban. Ulta is opening its first store in Manhattan in November, and will be opening its first store in Brooklyn by the end of the year, according to AM New York.Â
Riley Rose’s competition will be stiff across the board, but especially so in the case of Sephora, given that retailer’s tremendous success in omnichannel and mobile integration. Sephora offers its customers a slew of next-gen shopping features such as location-based targeted promotional texting, an augmented reality makeup try-on tool and daily mobile content for site visitors.
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Apparel retailer Forever 21 tests the beauty market with its first Riley Rose store – CNBC
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How Macy’s Is Turning Beauty Store Bluemercury Into Its Secret Weapon – Fortune
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Will dropping prices on cosmetics drive traffic to department stores? – RetailWire
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Beauty brands move toward NYC brick-and-mortar shops in ‘the era of cosmetics’ – AM New York
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How did mobile become the ‘glue’ in the Sephora shopping experience? – RetailWire
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What would an American Apparel acquisition do for Amazon or Forever 21? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Do you think now is the right time for Forever 21 to launch its Riley Rose beauty concept? Is it wise for Forever 21 to launch Riley Rose as a standalone concept, or would it be better served by opening with a store-within-a-store model?
Poll
BrainTrust
Adrian Weidmann
Managing Director, StoreStream Metrics, LLC
Meaghan Brophy
Senior Retail Writer
Struggling retailers like Forever 21 need to find new ways to stay relevant. Given Sephora’s success and the strength of the beauty category in general, it’s an understandable move, but it won’t necessarily be a successful one.
Notwithstanding the connection to Forever 21, as a standalone concept Riley Rose has no brand awareness. In an already crowed and competitive field it will need to invest heavily to attract customers and steal share. I think it would be a less risky move to trial the concept as a store-within-a-store offering to better understand market acceptance before launching as a standalone concept.
The comparison between Macy’s, J.C. Penney and Forever 21 is not the same.
J.C. Penney and Macy’s have average store sizes over 100,000 square feet. Part of the reasoning for the store-within-a-store concept is to make the excess square footage more productive. The average square footage for a Forever 21 is 38,000 square feet.
The second issue is that both Sephora and Bluemercury are concepts that were developed before moving into a store-within-a-store. So they helped to draw traffic into the stores.
The strategy of building a free-standing store to develop the concept and potentially develop a new customer base makes sense. Once the concept is proven, Forever 21 can easily move this concept into existing stores or develop a dual-branded store.
It is smart for Forever 21 to develop a beauty concept targeted at their customer base. Providing them with beauty products for the younger market is smart and has strong growth potential.
I applaud them trying to engage with their target customer’s lifestyle.
Today too many retailers are getting into each other’s space. Forever 21’s Riley Rose is another example of that. Ulta has had tremendous success because they have stayed on course without experimenting with new concepts. The opening of new stores in urban areas is excellent and follows their overall business model because they’ll still be Ulta stores and I would expect them to be successful. But with all the existing competition from Sephora, Ulta, Macy’s, J.C. Penney and others, do we expect Riley Rose to be a huge success? No. At best they’ll find a small audience, and that may only be short term.
I think Forever 21 would be better off concentrating on their core business and figuring out how to reinvent their specialty apparel business. I have said before that if you want to be successful in today’s competitive retail industry, you have to be different. Copying what your competition is doing is not being different. Those that are the leaders and not the followers are the ones that achieve great success!
It would have been safer to pilot Riley Rose as a store-within-a-store model. But, that being said, Forever 21 has slowly increased their cosmetic offerings over the past few years, so they likely tested interest that way. Riley Rose has the potential to be very successful, especially if they follow Forever 21’s fast-fashion pricing model. There are not many brick-and-mortar beauty retailers who exclusively target the tween/teen age group. A fast-fashion cosmetic retailer absolutely has the potential to succeed in today’s market. If anyone can pull it off, it’s Forever 21.
While I understand and commend Forever 21 for experimenting and trying new concepts to stay vital — stepping out, and away from your core brand seems very risky. Developing the Riley Rose concept and brand as a store-within-a-store would be more prudent. This would have allowed Forever 21 to develop a brand awareness and value proposition in a controlled environment and for their established customer base. The risk of failure has increased exponentially now that it’s a standalone store and trying to compete in a very crowded market where your competitors have a tremendous analog and digital advantage. Hopefully they can succeed fast and adjust even faster or …
As the article says, the beauty space is crowded and getting more so. New entries like Riley Rose point out the core issue: Weak traffic in department store anchors (and their aging demographics) force the cosmetics business to find new avenues. Sephora and Ulta have been the biggest players so far, but don’t ignore the huge beauty business being done by discounters, drug chains and even Amazon.
So the jury will be out until Riley Rose opens its doors. (One of the first locations is at theMayfair Mall here in Milwaukee, part of the GGP rollout.) Will the Forever 21 customer recognize Riley Rose as a spinoff? And will Riley Rose look and feel different enough from Sephora to succeed? Stay tuned.
This is definitely a play to boost growth. The core business at Forever 21 is under pressure from slower growth, fickle consumers and price deflation in a discount-driven market. To help performance they need more strings on their fiddle. Beauty is a logical choice as it’s higher margin, a popular category and fits well with their core offer and demographic.
The issue is whether the new concept will pull in enough people. Although the beauty market is growing rapidly it is crowded with choice, and Sephora and Ulta have locked in a lot of loyalty with their card schemes.
Sephora and Ulta are definitely huge players in the beauty category, but the new Riley Rose concept specializes in introducing customers to online only, foreign and up and coming brands, the majority of which are not sold at Sephora or Ulta. In addition, the store is only about 50% beauty. The rest of the store is comprised of home decor, stationery, lifestyle and snacks.
As others have said, it would have been a safer play to introduce their existing customer base to the new brand. It’s going to be a longer and potentially more expensive route, but H&M (one of Forever 21’s competitors) has launched several successful new brands in recent years including Other Stories, COS, and most recently ARKET.