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 beauty retailers. Each introduced their own spin on the category: sophisticated editorial content (Farfetch); cutting-edge logistics capabilities (Amazon-owned Shopbop) and lavish, curated experiences (Moda, which launched its own beauty salon this week).

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

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

But some struggle to sell products at all.

One beauty brand, which has seen significant sales on beauty sites and brick-and-mortar retailers, saw sales under $100 on Shopbop in the week ending Jan. 7, according to a sales report reviewed by BoF. In the four weeks ending January 7, total sales on the site were less than $1,000, which includes the weeks leading up to Christmas. Shopbop declined to comment.

As it turns out, it takes more than just filling your website or store shelves with bottles and tubes of skin care products to convince customers that you’re a successful beauty retailer. The missing element is often authority, which comes more easily when beauty is the retailer’s sole focus (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 at Alvarez & Marsal Consumer Retail Group. “All these luxury sites have an authority and a voice that they’ve developed in terms of fashion. How much does that mean beauty?”

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

Noticeably absent are any labels from Estée Lauder Cos., which sells its brands on Farfetch and Moda Operandi. That’s not surprising, since Fabrizio Freda, chief executive officer of The Estée Lauder Cos., is committed to maintaining the company’s prestigious position, and has publicly commented on ELC’s decision to avoid Amazon.

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

Even though it’s a small business, Violet Gray has already been the authority on high-end skincare, makeup, tools and more, and its support is eager. An “endorsement” of Code Violet could legitimize the beauty brand, resulting in promotion on the Violet Gray website, social media platforms and influencers in the beauty space (often friends of the retailer’s founder and CEO Cassandra Grey).

“Farfetch gives you storytelling, education, an environment that’s different from what you get elsewhere, [and] Shopbop is a lot like Amazon,” said Marie Driscoll, 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’s marketplace – including fashion and beauty – stagnated last year, and the company’s shares fell to an all-time low in December.

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

When it comes to fashion, Santo Domino’s doesn’t just showcase designers; she is often photographed in looks and campaign images for the site. Once a brand or product is recognized as a favorite in Santo Domingo, the brand or product enjoys increased exposure and sales.

Jessica Matlin, Moda Operandi’s director of beauty, told me that Moda will be expanding “Lauren’s Picks” into beauty.

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

Fashion has tight edits that Matlin described as “heroes and hidden gems,” exclusive products and experiences. Among them: an “Escape to Iceland” trip with unlimited spa access (and Blue Lagoon Iceland skincare) for $13,000; an $8,500 master class with celebrity hairstylist Mara Rozak and a $12,000 facial math with a top 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 becoming an authority, and being an authority provides an opportunity for differentiation, which may include access to famous hairdressers and doctors. I’m not sure who’s going to pay more than $10,000 for a session with a plastic surgeon that doesn’t involve plastic surgery, but “experiences” like this help position Moda as a player with a serious approach, something different from its competitors.

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