The cosmetic equivalent to Starbucks coffee shops, which pop up every half a block in New York City, Sephora has been a transforming force in the cosmetics industry. Major competitors appear to be taking steps to either strengthen their own fashion-forward presence, or just plain give in.
Most recently, I discovered The Body Shop integrating a small product line into 170 of the 230 Sephora stores. The line ranges from body butters to their signature tea tree oil acne treatment collections. Since their products use 100% recycled packaging and promote high ethical values, The Body Shop could well have found their new niche.
Complication ensues when you think about the progression of this partnership. For example, The Body Shop is owned by L’Oreal – perhaps the largest cosmetics company with a portfolio spanning over 20 mainstream and premium beauty brands. Sephora is a French company owned by an even bigger French company specializing in luxury- LVMH.
Since L’Oreal owns more than half of all drugstore brands including skincare, hair care and cosmetics, it will be interesting to see what the empire will do. As prices in drugstores rise to almost match those at Sephora ($8 mascara vs. $15), L’Oreal may need to decide on one course of action. They can either sit pretty and collect profits from products that are created with little innovation (which will still sell tremendously), or they can build a better product to compete with Sephora.
As Lancome and The Body Shop find their homes in Sephora stores, you can expect to see both retailers taking steps to merge and form a makeup goliath. After all, according to WWD, “Sephora has already placed reorders”.