Can Shoppers Drug Mart’s enhanced beautyBOUTIQUE concept overtake Sephora in the Canadian luxury beauty market?

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This article includes an analysis of the similarities and differences between Sephora and Shoppers Drug Mart's beautyBOUTIQUE concept, as the two retailers compete for Canada's cosmetics dollar. It expands on our previous article about Shoppers' opening a flagship beautyBOUTIQUE in Downtown Vancouver

By Steph Chiu

When you think of shopping for luxury beauty products, Sephora is the name that comes first to many of our minds. Since 2004, the French beauty brand has opened over 38 stores in Canada. Sephora is known for offering high-end brand name products in its bold and modern stores accented throughout by bright lighting, providing the ultimate luxurious retail environment for shoppers. 

Canadian drugstore chain Shoppers Drug Mart is also a popular destination for beauty-seekers, with cosmetic and fragrance products sold in its numerous locations across Canada. Many of its drugstores include a dedicated department for cosmetics known as the “beautyBOUTIQUE”, featuring brands formerly exclusive to department and specialty stores. These partially-separated boutiques are distinguished by more contemporary fixtures and softer lighting. First launched in 2003, Shoppers has since expanded the concept to over 300 stores nationwide. 

Typical store interior for existing beautyBOUTIQUE locations [Image Source]

Shoppers also owns six standalone specialty beauty outlets called Murale. It competes in the luxury beauty market. With its sleek design and higher-end product offerings, Murale allowed the retailer to better compete with the likes of Sephora. First opened in 2008, the upscale concept was predicted to expand to 50 locations within five years, but its fate is now uncertain with two of its original eight stores shut down just last year.


Murale store exterior [Image Source]

Murale store interior [Image Source]

As increasing competition looms from Sephora and Amazon in the Canadian market for luxury beauty products, Shoppers has responded by enhancing its luxury offerings through its beautyBOUTIQUE concept. A prototype of the updated concept was first launched in November 2012 at Bayview Village Shopping Centre. A second enhanced beautyBOUTIQUE was opened at Toronto Eaton Centre in August 2013. The new boutiques offer 21 prestige brands such as Guerlain and Chanel, currently carried at Murale but not at existing beautyBOUTIQUE locations. New modern fixtures, digital signage, and ambient lighting have also been introduced to provide an “elevated prestige beauty experience” to customers. 

Updated signage and storefront of Shoppers Drug Mart at Toronto Eaton Centre [Image Source]


New fixtures and signage in the beautyBOUTIQUE [Image Source]

At first glance, the new beautyBOUTIQUE stores by Shoppers may remind many of Sephora stores. Let’s take a closer look at how these two competitors compare.

Store Design: The beautyBOUTIQUE experience is now much more upscale; Shoppers has used many of the design elements featured in its Murale stores and brought them over to the new beautyBOUTIQUE. With the updated fixtures, signage, and lighting, the store design looks strikingly similar to Sephora stores. Products remain merchandised by brand in both stores. 


New beautyBOUTIQUE concept [Image Source]


Sephora Store Interior [Image Source]

Product Offering: The main selling point of the new beautyBOUTIQUE’s are the prestige brands now available. With luxury names like Chanel, Guerlain, and Yves Saint Laurent, Shoppers is much better positioned to compete with industry players like Sephora. This is an amazing feat for the drugstore retailer: Shoppers has come a long way in overcoming the stigma of selling luxury products in its stores through the evolution of its beautyBOUTIQUE concept and the success of their Murale chain. 

Although Sephora offers a much wider range of brands, the one advantage that Shoppers has is its comprehensive line of Chanel products, which are not currently available at Sephora stores in Canada. The beautyBOUTIQUEs also feature new fragrance testing spots and “play stations” for customers to touch the products.

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Services: Both Shoppers and Sephora offer specialized services for customers in their stores. As in existing beautyBOUTIQUE locations, beauty advisors are on-hand to provide expert advice and makeup artists are available as well. The area has been given a design upgrade as mentioned above. In Sephora, makeup applications are also available in what they call their “Beauty Studio” section of the store.

Makeup applications available in the new beautyBOUTIQUE [Image Source]

Sephora Beauty Studio [Image Source]

Sales associates in the beautyBOUTIQUE stores focus on cross-selling products across all brands, rather than the traditional department store practice of having individual brand consultants. This is a well-known practice in Sephora stores and allows the associates to provide the most knowledgeable, unbiased service to its customers. 

Customers and Loyalty Programs: Shoppers Drug Mart is one of the most trusted and recognized names in the Canadian retail landscape. The Shoppers Optimum loyalty program boasts over 10 million members (almost one in every three Canadians), representing a wealth of valuable customer data, and Optimum points can be earned and redeemed on almost anything in the store. This is a huge advantage that Shoppers can leverage as it strives to expand its presence in the luxury beauty landscape. While Sephora also has a loyalty program called “Beauty Insider”, including a premium level with exclusive perks for V.I.B. (Very Important Beauty Insider) members, Sephora’s version lacks the scale and flexibility of the Shoppers Optimum program.

E-Commerce: With the expansion of the beautyBOUTIQUE concept, Shoppers has updated its website to include a useful brand finder tool and selected product information on its new brands. However, the website is very limited, and while you can shop for Murale products online at murale.ca, an e-commerce platform for beautyBOUTIQUE is not yet available. Given that the option exists for Murale, it seems like only a matter of time before Shoppers will begin to offer a way to buy beautyBOUTIQUE products online. Doing so will allow the retailer to compete even better with Sephora, who launched its Canadian e-commerce store, sephora.ca, in late 2012.

Conclusion

Overall, the future looks bright for Canadians eager to buy luxury beauty products with the many new offerings being introduced to the market. Shoppers’ enhanced beautyBOUTIQUE concept is visually stunning and presents a definite competitive threat to Sephora. We will be keeping an eye on potential expansions of the concept to more stores, as well as the possibility of an online store being introduced.

Read more: 


Steph Chiu is an Honours Business Administration student, currently attending the Ivey Business School at Western University.  


UPDATE: SEPHORA'S NEW STORE ON VANCOUVER'S ROBSON STREET

Sephora's development application signage on Robson Street

Sephora's new store on Vancouver's Robson Street will be one of the largest in Canada, if not the largest - we'll know more soon. Signage for the development application, posted on site, indicates that the store will be over 9,500 square feet and two floors. It will be fairly wide as well - plans indicate its width to be almost 70 feet. The Robson Street Sephora will be the largest in Vancouver. By comparison, the Pacific Centre Sephora store is 5,935 square feet.


Close-up of the development application billboard for the new Sephora building, on Robson Street

We first reported on the Robson Street Sephora store in June, where we revealed that Clearly Contacts's first store would be closing for demolition.

For those unfamiliar, Sephora is a Paris-based chain of cosmetics stores. It was founded in 1970 and purchased by the LVMH conglomerate in 1997. It has locations worldwide and opened its first North American store in New York City in 1998. It carries over 100 brands as well as its own private label products and includes makeup, skincare, fragrance, hair care, bath and body products and hair and make-up tools. 

Sephora will replace these Robson Street stores

Sephora will be located adjacent to the recently-completed retail complex that includes a flagship Forever 21 store.

[Sephora website]

SEPHORA TO OPEN FLAGSHIP ON VANCOUVER'S ROBSON STREET

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Sephora will open a flagship location on the 1000 block of Vancouver's Robson Street. As a result, several smaller retailers will lose their store spaces including several accessory and gift stores as well as a recently opened Clearly Contacts store. The Sephora store will have two levels and will open late 2014.

Sephora will be located adjacent to the recently completed retail complex that includes a flagship Forever 21 store.

For those unfamiliar, Sephora is a Paris-based chain of cosmetics stores. It was founded in 1970 and purchased by the LVMH conglomerate in 1997. It has locations worldwide and opened its first North American store in New York City in 1998. It carries over 100 brands as well as its own private label products and includes makeup, skincare, fragrance, hair care, bath and body products and hair and make-up tools. This paragraph's source is completely from Wikipedia.

Soon we'll do an article on the 1100 Block of Vancouver's Robson Street. A significant number of storefronts are currently for lease and from what we've been told, more are on the way. Not all will be lost as the street is more likely in the process of a transition than a decline.

[Sephora Website]

FLOORPLAN FRIDAY: THE COLONNADE, TORONTO

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The Colonnade, at 131 Bloor Street West in Toronto, is one of Canada's most prestigious retail addresses. We're providing floorplans and description of the two-level retail plaza.
(click above for larger image)

The first level, floorplan above, includes Chanel, Coach, Prada, Michael Kors, Cartier, Fogal of Switzerland, Escada and Sephora. The floorplan shows Lacoste in space 103 and an empty space 110, at 470 square feet. Lacoste has closed and it will be replaced by Mulberry, as we previously reported, and space 110 was most recently home to upscale glove retailer Sermoneta.

The image above shows a close-up of the eastern-half of The Colonnade's ground floor. We've marked Mulberry's new location. Notice the large Prada store. It was originally much smaller but annexed an adjacent retail space to grow to almost 6,000 square feet.

The Colonnade's second level lacked retail space until Chanel leased 4,200 square feet on the second floor. Chanel opened its ground-floor store in 1989 and with the second-floor expansion, it is the complex's largest retail tenant at over 7,300 square feet. Michael Kors and Cartier have since created larger stores by occupying second-floor space in The Colonnade.
(click above for larger image)

According to Retail Insider's ACT7 of Urban Toronto, the second-level space 209 on the floorplan above, marked 'Japan Foundation Library & Museum', is papered-over on the outside. This may become the second level of the previously mentioned Mulberry store. 

The Colonnade opened in 1963 and includes over 70,000 square feet of retail space, over 25,000 square feet of office space and 157 rental apartments above. Surrounding retailers read as a 'who's who' of luxury retail and include Gucci, Hermes, Louis Vuitton, Tiffany & Co, MontBlanc, Burberry, Hugo Boss, MaxMara and others.

The Colonnade website: www.thecolonnade.ca


Browns Shoes Opening 5000 sq ft Toronto Eaton Centre Store

Floorplan, Cadillac Fairview. Red Outline/Lettering by Retail Insider
Browns Shoes will open a 5000 square foot store at Toronto's Eaton Centre. This will replace its current smallish 2500 square foot store. Browns will replace Sephora cosmetics, which will move to a larger space on the same floor.

Browns' store will be on Level 3 of the Eaton Centre (as is their current store), often considered the 'most prestigious' floor in the mall. This may not arguable by true but Level 3 is the brightest level since it receives sunlight from the skylights above.
Current Sephora, to be replaced by Browns Shoes. Image: http://www.quadrangle.ca/uploads/ribbon-sephora-1.jpg
Browns stores are from Montreal and have stores across Canada. Their stores vary in size, reaching as large as 8000 square feet. Browns once had concessions at Holt Renfrew and Hudson's Bay stores in Canada, as well as at Joseph's of Chicago (a Chicago-based shoe retailer that went bankrupt). These concessions have since closed, leaving free-standing locations.

Browns is one of our favourite shoe stores, especially when they have a sale. We admit we have a shoe problem... we don't have enough room for all of our shoes. Many readers can probably relate. We make regular trips to Browns and its 'younger' store, B2. Both carry private-label and designer shoes with some of the best brands available in Canada.

Browns is in expansion mode and will be opening more Canadian locations. Watch our website/Facebook/Twitter, as we'll update you when we find more openings/expansions.

Source: GKW, Urban Toronto.

Browns Shoes website: www.brownsshoes.com

Toronto Eaton Centre website: www.torontoeatoncentre.com



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