Why is it so hard for fashion retailers to succeed in beauty?

Farfetch, Shopbop and Moda Operandi – three top online clothing and accessories retailers with a combined 51 years in business – decided over the past year that they might as well be a beauty retailer. Each of them presented their own direction in the category: sophisticated editorial content (Farfetch); excellent logistics capabilities (Amazon-owned Shopbop) and rich curation experiences (Moda, which launched its beauty store just this week).

In 2013, Net-a-Porter was the first viable, luxury fashion destination online to expand into beauty. At the time, the retailer’s chief executive told me that despite launching “The Quintessential Edit”, Net-a-Porter “will always be a fashion business first and foremost”. In the decade since then, the novelty of retailing fashion and beauty has worn off, mostly because almost everyone is doing it.

Beauty has proven to be an attractive space because returns are low, the category is durable and there is a lot of crossover between luxury fashion and beauty customers. Luxury e-shops, like department stores before them, are eager to expand their authority beyond designer handbags and shoes. Like Net-a-Porter, the new entrants say skin care and makeup will never be a major driver of sales (not that they’re arguing).

But some struggle to sell products at all.

One beauty brand, which has seen significant sales on beauty websites and brick-and-mortar retailers, posted sales of less than $100 on Shopbop in the week ending Jan. 7, according to a reporter sold by BoF. In the four weeks ending Jan. 7, total sales on the site were less than $1,000, including the weeks leading up to Christmas. Shopbop declined to comment.

As it turns out, it takes more than filling a website or store shelves with bottles and tubes of skincare to convince shoppers that you’re a viable beauty retailer. The missing element is often authority, which comes more easily when beauty is the sole focus of the retailer (Sephora and Ulta Beauty aren’t trying to sell fashion, after all).

“I don’t think it’s an automatic ‘plug in’ and it’s just going to sell,” said Manola Soler, senior director of Alvarez & Marsal Consumer Retail Group. “All of these luxury sites have an authority and a voice that they’ve developed in fashion. How much beauty does that mean?”

On Shopbop, product images are presented in the same grid format as fashion. But where clothes are shown on models, most beauty products appear as bottles or packages against a neutral background. It’s already challenging to sell beauty online; the imagery and presentation must feel as close to the IRL experience as possible.

Noticeably absent are any brands from The Estée Lauder Cos., which sells its brands on Farfetch and Moda Operandi. This is not surprising, as Fabrizio Freda, CEO of The Estée Lauder Cos., is determined to maintain the company’s prestigious position and has publicly commented on ELC’s decision to avoid Amazon.

Farfetch bought her beauty authority. Prior to entering the marketplace category, it acquired premium beauty retailer Violet Gray in 2022. Violet Gray is known for its slick, highly produced content and its “Violet Code,” “a testing process and set of standards by which our community of top makeup artists, hairstylists, estheticians, dermatologists, and celebrity influencers distinguish the world’s best beauty products. in the world out of tens of thousands on the market,” according to its website.

Although a small business, Violet Gray has already been an expert in premium skincare, makeup, tools and more, and her support is in demand. The Violet Code “Endorsement” could legitimize the beauty brand, resulting in promotion on the Violet Gray website, social media platforms and to influencers in the beauty space (often friends of founder and retail chair Cassandra Grey).

“Farfetch gives you storytelling, education, an atmosphere that’s different than you get anywhere else, [and] Shopbop looks a lot like Amazon,” said Marie Driscoll, executive director of luxury and fashion at consultancy Coresight Research.

However, the jury is out on whether this approach will succeed in increasing sales. The value of goods sold on Farfetch – fashion and beauty included – stagnated last year, and the company’s stock hit an all-time low in December.

At Moda, CEO Lauren Santo Domingo is a global fashion authority, and her fashion, accessories and home “picks” are often highlighted in the retailer’s social content and marketing materials.

With fashion, Santo Domino doesn’t just showcase designers; she is often photographed in looks and campaigns for the site. Once a brand or product is branded as a popular Santo Domingo brand, it enjoys increased exposure and sales.

Jessica Matlin, Moda Operandi’s beauty director, told me that Moda will expand “Lauren’s Picks” to include beauty.

“I send her products, Lauren tells me what she loves,” she said. “You’ll know what Lauren uses and what Lauren’s favorite lotions are.

Moda has a tight curation that Matlin described as “heroes and hidden gems,” exclusive products and experiences. Among them: a $13,000 “Escape to Iceland” trip with unlimited access to the spa (and Blue Lagoon Island skincare); an $8,500 masterclass with celebrity hairstylist Mara Rozak and a $12,000 mathematical facial analysis with a leading New York plastic surgeon that comes with microneedling and skin care products (but no surgery).

Being taken seriously in luxury, regardless of category, starts with a strong point of view. This leads to you becoming an authority and being an authority gives you a chance for distinction which could include access to famous hairdressers and doctors. I’m not sure who pays over $10,000 for a session with a plastic surgeon that doesn’t involve any plastic surgery, but “experiences” like these help establish Mod as a gamer with a serious attitude that sets him apart from his competitors.

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