Macy’s is upgrading its pop-up shops, driven by the way millennial consumers discover beauty products — through technology.
Last week, the department store announced it acquired a minority stake in B8ta, a tech startup that provides a Shopify-like solution for brands moving into physical retail. Macy’s plans to use B8ta to expand The Market, a pop-up concept featured in select stores and featuring a curated selection of products not normally sold at Macy’s. Along with a selection of fashion and tech products, The Market shops feature beauty products from brands including PiperWai, Miracle Brow and Liquid Courage.
B8ta’s “Built by B8ta” platform, which has already been rolled out to some computer companies, provides brands with logistics and management services, and relies heavily on digital tools and displays. The company recently announced that it will bring its services to more cosmetics companies, Macy’s being one of the first.
“The Market already has a bunch of beauty brands,” said Marc Mastronardi, Macy’s evp of business development. “It is a place in our stores [where] we know consumers are excited about beauty.”
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The new investment, Mastronardi said, is part of Macy’s larger quest to incorporate more technology into its retail concept. The 160-year-old department store, once seen as a prime destination for fashion and beauty products, has been struggling to bring in sales for the last three years. In 2016 alone, it closed 100 of its stores and cut over 10,000 jobs.
Macy’s shares saw some modest growth in 2018, but analysts say the changing retail environment is not on its side. As consumers increasingly shop online for beauty and fashion products, old-world department stores with traditional salespeople and floor displays are struggling to stay relevant.
As a result, Macy’s will tap into B8ta’s expertise to bring more tech features to its pop-up section and, potentially, its full stores. Mastronardi would not disclose which specific technologies The Market would incorporate, but he said Macy’s will increasingly feature everything from video to content platforms to tech-driven product testing in stores, in order to showcase beauty, fashion and tech brands.
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“There are a number of things that are on our radar — some of the things B8ta [already] has on their radar as it relates to the in-store experience around beauty products,” he said. Broadly, Mastronardi said, customers may be able to get customized beauty advice through technology or put beauty products they see in the shop to an online checkout on their phones.
Department stores are getting increasingly competitive when it comes to introducing new technologies in fashion and beauty departments. Nordstrom’s Pop-Ins, a similar series of rotating in-store pop-up shops curated by former Opening Ceremony vp Olivia Kim, have used virtual reality, music and 360-degree video to showcase products both virtually and physically. Neiman Marcus and Saks Fifth Avenue have been expanding their beauty counters, so customers can walk around and try products more freely. Specialty stores such as Sephora and Ulta have introduced features such as augmented reality mirrors in their stores.
“We’ve got a very great, very strong beauty customer,” Mastronardi said. “And we have a customer that is always asking for us to provide more technological advances in their shopping experience.”
Jennifer Walsh, the founder of retail concept Beauty Bar — which spanned e-commerce, brick-and-mortar stores and a TV program — and a cosmetics industry consultant, said beauty merchandise alone is no longer enough to draw shoppers to a store. As a result, department stores are trying to lure customers in with interesting experiences, including everything from pop-ups tailored to local tastes to custom beauty advice dished out through high-tech features such as virtual voice assistants.
“People don’t want to shop in store because many stores aren’t keeping up with the more agile smaller brands that can really make the in-store shopping experience something unique to them,” she said. “Big-box retailers have tried to create something similar in developing shop-in-shop experiences.”
Technology is one such way for a retailer to create a custom beauty shopping experience: AR and virtual voice assistants have allowed many cosmetics brands to offer suggestions on specific products and provide beauty advice based on individuals’ unique needs.
Walsh said such an approach is no longer cutting-edge; rather, it’s what beauty customers have come to expect from a shopping experience. Therefore, big-box retailers — particularly those based on the traditional department-store model — need to constantly focus on technology to stay in business.
“In beauty, people will always want to see it, smell it, touch it and experience it before purchasing,” Walsh said. “If the tech-driven experience is about customizing products that are made just for you, with what your skin needs right now, it could drive more traffic to the stores.”
