Macy’s plans 60 new Bluemercury stores

Bloomberg

Macy’s Inc., pleased so far with the performance of Bluemercury, is pushing for more.
The cosmetics brand, acquired by Macy’s for $210 million in 2015, will open about 60 new standalone stores through 2019 — maintaining the chain’s pace of expansion. More will open inside existing Macy’s locations, underscoring how Bluemercury has become a key part of the department store’s strategy to defend its turf from online competitors and the rise of chains such as Ulta Beauty Inc. and Sephora.
The growth will bring Bluemercury’s store count to about 220. Most of the locations will be in areas where the brand doesn’t already have a presence, according to co-founder Barry Beck. He highlighted smaller cities and town such as Raleigh, North Carolina, Corona Del Mar, California, and Jupiter, Florida.
“We focussed a lot on the coast and the big cities and so now we’re looking to pick up a new customer,” Beck said.
“There’s no reason why a customer from Little Rock has to travel all the way to a big city like New York, or Philadelphia or Miami to get these beauty products.”
Bluemercury has already opened about 100 new locations in the past three years, nearly tripling its fleet. Its flagship is a 2,700-square-foot store at the Hilton hotel on Sixth Avenue in Manhattan where it tests new products.
Inside, there’s a spa room and an artificial intelligence mirror that can scan and order items for delivery.
Bluemercury’s comparable sales growth is in the high-double digits, Beck said, and the company wants to use technology to maintain that pace. It’s expanding a within-an-hour bicycle delivery in New York to Los Angeles and is considering drone deliveries. It’s also developing phone-recognition software to identify customers as they enter a store and then sending them product suggestions based on recent purchases.
While department-store beauty floors once ruled the market, with their battalions of perfume spritzers trying to lure shoppers into kiosks, specialists such as Ulta and LVMH’s Sephora have rapidly stolen market share, while startups give shoppers new options, such as subscription boxes from Birchbox and Ipsy.
For Macy’s, Bluemercury offers a channel that can stand up to these new incursions.