With beauty products available online, why are brands still investing in physical stores?

E-commerce platforms for beauty products in India are growing a dime a dozen. What does this mean for their brick-and-mortar counterparts? 

Retail therapy has endured quite a metamorphosis in the past few years—from heading outdoors and shuffling from one store to another, the experience has downsized to your electronic devices, allowing you to browse through endless brands’ online shops at once by simply switching tabs. According to a Statista report, about 185 million Indian consumers shopped online in 2021, and this number is poised to grow to 425 million by 2027. Online shopping is equally, if not more, big abroad. In 2021, 230.5 million Americans—or 69 per cent of the American population—shopped online, revealed a survey. 

Online shopping combines convenience and cost-effectiveness in more ways than one. Add to it the advent of the COVID-19 pandemic, and online shopping transformed from a need- or demand-driven activity to a leisurely pass time. A report by Payment Cloud, a payment-processing gateway, shared that online shopping is the most popular online activity worldwide, generating about $ 3.5 trillion. 

Despite the ever-mushrooming disposition of online shopping, the physical retail footprint has only been increasing of late, especially when it comes to beauty. From Reliance-owned Tira Beauty’s immersive store that gives tough competition to Sephora to single-brand outlets like Anastasia Beverly Hills’ store in Mumbai’s Palladium Mall, Too Faced’s store in DLF Promenade, New Delhi, The Body Shop’s expansion in Tier-2 and Tier-3 cities and more, the physical beauty retail space has seen exciting movement. We speak to industry players to understand why they are still investing huge money in physical stores in spite of their online presence.

It’s all about the details 

To be able to touch and feel any product before purchasing it still passes as a critical criterion for the average Indian consumer. That’s one of the reasons why we still witness the ingress of newer establishments in the physical retail space, particularly in fast fashion and beauty. “While online retail penetration is growing, physical retail still accounts for a lion’s share of the retail activity,” says a source close to Tira Beauty. On why the new house of beauty chose to commence with an immense focus on a physical store, the source adds, “When Tira was conceptualised, the brand knew it had to innovate and shift consumer mindsets from just shopping to an elevated, immersive experience that is unmatchable.” 

Of course, a physical store unlocks the opportunity to be introduced to a brand and its offerings in person. However, besides the whole touch-and-feel aspect of a physical store from a consumer’s perspective, it also allows the brand to welcome a consumer into its world with a unique experience and mood to offer. “We have always believed that true luxury is found in the details, the thoughtful touches and the unique ways in which we can create memorable experiences,” says Karishma Manga Bedi, consultant and strategic advisor at Forest Essentials. “We are a consumer-facing brand, offering an experience of contemporary luxurious Ayurveda. To this end, our retail stores have been designed to reflect a true embodiment of our brand; all of our stores harness luxury in purity, scientific Ayurvedic knowledge and traditional Indian craftsmanship while presenting the multicultural vision of the brand,” she explains. 

“A physical store allows retailers the chance to craft an engaging brand experience and showcase their brand culture, while online allows ease of accessibility from the comfort of your home or any space,” mentions the source close to Tira Beauty. “In the current market scenario, brick-and-mortar and internet stores are coexisting seamlessly. The pandemic added a fillip to online retailing, but as soon as the lockdown protocols eased up, consumers recalibrated towards malls and stores for a more one-on-one experience. Engagements and experiences are back, and brands in the online space have also geared up to offer these through Artificial Intelligence (AI) and Machine Learning (ML) integrations.”

Elevating the in-store experience

Haven’t we all stopped by a Forest Essentials store at some point because of the beautifully rich floral fragrance that engulfs the space? While that’s an elementary and no-frills way of creating a stand-out ambience, with technological advancements in play, the sky’s the limit. While luxury Ayurvedic brands like Forest Essentials and Kama Ayurveda have piscina stations to try on the wash-off products in real-time, forward-looking brands like Tira Beauty are pushing the envelope by hosting beauty-tech implementations across verticals.

“Tira offers several immersive experiences for consumers across  categories like make-up, skin, hair and fragrance for an in-depth education on the product. There are several tech innovations in the stores—Smart Mirrors, which let you try out new looks right away; the Product Vending Machine offering complimentary samples; and the Fragrance Finder, a first-of-its-kind tech experience in India for customers to choose their preferred fragrance via the ‘Eight Fragrance Tone Panel’ installation,” adds the source close to the brand.

Similarly, a few selected stores of American luxury skincare brand Kiehl’s have an AI-enabled skin analysis tool that helps consumers find out the levels of moisture and hydration as well as discover the skin barrier health, which then recommends products in correspondence to the findings. Brands like Anastasia Beverly Hills (ABH) and Benefit Cosmetics also offer bespoke brow services at their eyebrow bars in the ABH and Sephora stores respectively. Global favourite make-up brands such as M.A.C Cosmetics, Estée Lauder and Bobbi Brown offer quick makeover sessions in their stores for users to ascertain their best product matches.

Recently, fast-fashion—and now beauty—brand ZARA inaugurated its revamped store at Palladium Mall in Mumbai. “Some of the services integrated with the brand’s app include a fitting-room reservation service; the ability to search online for items in the store; order and collect them within two hours; and check available stock. The store also boasts of an advanced self-checkout area and a special area for collection of orders placed online,” shares a spokesperson of ZARA. 

Very recently, international brands like Glossier and H&M Beauty have also launched their ‘experiential’ physical retail stores in New York and Oslo respectively. Meanwhile, both the aforementioned luxury Ayurveda beauty brands have forayed their physical presence into the UK market, too. 

Is omnipresence the future?

A Business Insiderarticle suggests that every one in three consumers will be shopping online by the end of this decade. On the other hand, the same article reveals that the Indian offline retail market shrunk by five per cent in the fiscal year 2021. Combine these facts and it is certain that online shopping is the next big thing. However, one cannot be completely oblivious to physical retail’s solid comeback—since the pandemic—with user experience-first elements at the core. This  brings us to a conclusion that, perhaps, omnichannel presence is the best strategy for both survival and success.  

“Tira’s goal is to create a platform and a space that complement each other, making it accessible yet aspirational for the consumer. It understands that beauty means different things to different people and that it can change from day to day and mood to mood. It is an established fact that retail stores will continue to grow and exist because of their appeal to customers, and there is a need for omnichannel shopping where one can easily switch between physical and digital spaces,” shares a source close to Tira Beauty. 

According to Manga Bedi, physical beauty stores continue to be relevant in India because they offer tangible, immersive shopping experiences that cannot be replicated online. “Beauty products are very personal, and having a place to test their texture, quality and colour is an important part of the process, especially when it is a luxury purchase. Beauty retail stores empower shoppers and hence, remain and will continue to stay relevant in the Indian beauty market.” However, the brand has tried to translate bits and pieces of an in-store experience on its website. “We introduced an all-new feature under our ‘Bespoke Services’ called The Ayurvedic Doctor Interactions that harness the expertise of senior Ayurveda doctors to responsibly serve our customers with recommendations for their unique concerns.”

Shoppers are on board with the ubiquitous existence  

“The term ‘phygital’ is going to define a lot of what we see in the beauty business—a mix of brick-and-mortar and digital. Each will borrow from the other; for instance, a store will have Virtual Reality (VR) and AI tools, screens to see the entire inventory, QR codes and so on. Physical stores will continue to be important in a brand’s strategy in India, especially in smaller towns where they also become a social hub,” believes Geeta Rao, a former beauty editor at Vogue. “I think if a brand can afford it, a physical space makes sense.” Rao affirms that multiple touch points can enhance the experience and make the consumer feel special, right from awareness and education about a trend or category to buying and post purchase. Gen-Z content creator Tarini Shah feels online shopping is something that people got completely used to during the lockdown and now its convenience has stayed with us, “but nothing beats the experience of actually entering a store, feeling the products, seeing them with your naked eye and trying them on before you purchase them.”

“While it is still easier to experiment with purchasing clothes online with easy return policies, when it comes to beauty, you would want to test the product on your skin,  and being able to enter a store with an expert helping you would always be something one would appreciate,” concludes Shah.

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