Buoyed by healthy sales, brands are expanding, setting up standalone stores
Amid a soft retail scene, one segment has been bucking the trend: beauty products. In fact, beauty brands are growing their bricks- and-mortar presence here in and around Orchard Road. Beauty brands makeup.
At least three international brands are expanding beyond department stores and multi-label beauty chain Sephora to establish standalone stores.
French company Nars Cosmetics will open its first boutique in Ngee Ann City later this month, a spokesman told The Straits Times. The company's products are currently available at Sephora, Tangs at Tang Plaza and Robinsons Orchard.
The move follows double-digit year-on-year growth through its current channels, said the spokesman, and the standalone store will facilitate a multi-channel business model, including e-commerce.
American brand Urban Decay, previously available only at Sephora, launched its first boutique in VivoCity in 2015 - also its first in the region. It now has stores in Bugis Junction and a flagship outlet in Ngee Ann City which opened last month. It said sales were "outperforming the market".
Sales of colour cosmetics here are expected to grow annually to reach more than this amount by 2020, up from an estimated $230.5 million for last year, according to Euromonitor International.
Meanwhile, MAC Cosmetics, which has 12 stores in Singapore, opened its 1,980 sq ft flagship outlet in ION Orchard last month.
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American brand NYX Professional Makeup opened its first two boutiques in October and November in Bugis Junction and Plaza Singapura, with plans to open more.
Sales of NYX products at Sephora outlets have more than doubled between 2015 and 2016, but standalone stores allow the company to showcase more products, said marketing manager Jerraine Lim.
I like going into the store and trying on make-up, and boutiques have a nicer atmosphere and more personal and attentive service.
HEALTHCARE WORKER ERIN BAKER, 27, who is excited that more beauty brands are opening boutiques here.
Ms Esther Ho, assistant director at Nanyang Polytechnic's School of Business Management, said that challenging economic times create opportunities for brands as malls compete to fill the spaces vacated by other retailers.
Vacancies for retail properties rose to 8.4 per cent at the end of the third quarter of last year - the highest level since the first quarter of 2011, according to data from the Urban Redevelopment Authority.
"Rentals could be sufficiently depressed to attract new tenants such as Nars into the shopping malls," said Ms Ho.
Sales of colour cosmetics in Singapore are expected to grow annually to reach more than $278 million by 2020, up from an estimated $230.5 million for 2016, according to market research firm Euromonitor International.
This comes even as retail sales, excluding motor vehicles, have fallen every month since February last year, with the latest government data estimating a fall of 0.3 per cent in October over the same period in 2015.
Still, retail experts said cosmetics sales may be getting a boost as consumers trade big-ticket purchases for "small luxury" items such as expensive lipstick.
Said Singapore Polytechnic senior retail lecturer Sarah Lim: "Shopping is psychological, the more you buy, the better you feel."
Cosmetics stores have an advantage as consumers like to try out products on their skin, while social media influencers help to boost sales by building hype, she added.
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Apart from touting a wider selection of products and exclusive collections, the new boutiques have also incorporated experiential elements.
Nars' store will feature a virtual try-on function and photo booth, while NYX's two stores have interactive beauty bars for customers to follow make-up tutorials. Social media content is also integrated in NYX's and Urban Decay's stores.
"Cosmetics stores are doing well in creating an experience for shoppers, other retailers should take note," said Ms Lim.
Healthcare worker Erin Baker, who spends up to $300 a month on cosmetics, said she is excited that more brands are opening boutiques here. "I like going into the store and trying on make-up, and boutiques have a nicer atmosphere and more personal and attentive service," said the 27-year-old.