By Lauren Zumbach
Chicago Tribune
WWR Article Summary (tl;dr) Great Q&A with Barry Beck, one of the founders of beauty business “Bluemercury.” This article takes a look at the various forces in the beauty industry driving sales online and what is taking place at brick and mortar locations.
CHICAGO
When Barry and Marla Beck launched Bluemercury in 1999 as an upscale, neighborhood alternative to the department store beauty-buying experience, they had to convince brands and investors to sell beauty outside the mall.
Even their company’s name, a combination of Marla’s favorite color and ancient Roman messenger god Mercury, a nod to their focus on giving customers quality beauty information and advice, wasn’t an immediate hit.
Today, the company, which has rapidly expanded since Macy’s bought it for $210 million in 2015, has nearly 140 stores and another 40 are expected to open this year.
Barry Beck, founder and chief operating officer, sat down with the Tribune to talk about why Bluemercury is opening stores when so many retailers are closing, why you won’t find them on Chicago’s Michigan Avenue and how a company that wanted to fix the department store beauty experience wound up becoming part of one. The interview has been edited for length and clarity.
Q: How long did it take to go from the idea to the first store?
A: The original idea I had was to bring these brands online, it was going to be an online-only business. The problem was nobody was shopping online. This was the first internet boom. My initial investor was Steve Case from America Online (now AOL) and they only wanted pure internet plays. I said guys, clicks and bricks is the future. They were dead set against (stores), but we needed it. We bought the first store, named it Bluemercury, opened a second store in Washington, D.C., but it was really the third store, in Philadelphia, that changed everything.
Q: How so?
A: This was a bet-the-company move. I didn’t have a lot of capital. I’d burned a lot on the internet business. And the most precious resource any entrepreneur has is time. I said, I’m going to try this thing in a new city. If it works, I’m going to be a big success. If it doesn’t work, OK, I’ll find something else to do. The first sale of the day was for $3,000. We knew then that we were onto something.
Q: Why sell to Macy’s in 2015?
A: The irony of selling to a department store is not lost on me. But it was an amazing recognition of the value we created. It’s been an incredibly symbiotic relationship. Fifteen years ago, 90 percent of all luxury cosmetics were purchased at the department store. By 2014, it was down to 60 percent and still sinking. There was this whole transition, and we were part of it, bringing the client out of the mall and into the streets, and they wanted in on that. But on the other hand, I was scaling every function of my business, and it was really difficult. What I really want is to become a household, iconic brand, and they helped me do that. We’re opening more stores than ever.
Q: How do you choose where you want to be?
A: My philosophy is location is still everything. Density has been our friend. I’m going to blanket Chicago with new stores.
This client of ours uses us as a substitute drugstore. They pop in for a lipstick, a new tip or trick. We embed ourselves in the lives of the communities where you live. In cities, our clients are within a 5-mile radius (of the store). In the suburbs, it’s never more than a 15-minute drive time.
I bet I could open 60 stores in Manhattan, 40 stores in Chicago, 50 in the greater Chicago area, and that’s my intention. We don’t see cannibalization, we see overall lift.
You notice I’m not on Michigan Avenue. That’s not our business. We’re neighborhood stores. And we think we’re winning the hearts and minds of these customers because we have their trust.
Q: You noted that a lot of beauty sales still aren’t done online, in part because customers want that trusted in-person experience. People made similar arguments about how we’re never going to buy apparel or mattresses online, but we’ve started to. Do you think there’s something different about beauty?
A: I’ve never been a technology guy. For me it’s about customer behavior. People are ultimately social beings. They love interacting and they love being connected to each other, and shopping is a social experience, so I don’t think it’s going to go away. It’s just going to change.
Two years ago, 75 percent of my Bluemercury customers were telling me they were influenced by marketing campaigns in beauty. Today, it’s only 25 percent. The store has to transition to become a place for information, education, edu-tainment, where we’ll do your facials and you can come in for a quick tip or trick or when you’ve got an emergency blemish and you’re on your way to a black-tie event.
People also want things fast. If you’re an affluent busy urban superwoman or suburban power mom, you don’t need to go to the mall. You can grab your coffee at Starbucks and then grab your lipstick.
Q: Are you trying to branch out to a wider audience, or focusing on a particular type of customer?
A: I think over time people will discover us. We serve a pretty broad array of customers. Of people who come to Bluemercury, 50 percent of customers are coming for a solution to a problem or a product with a specific attribute.
I think that’s the niche we’re going to carve out, and it’s really built around people. When I started 18 years ago, people in beauty were part-time workers. We gave people full-time work, benefits and a true career path, and we keep their knowledge and expertise inside the business. We created this secret sauce.
Q: Did you know when you started the company you wanted to create your own products and brands as well?
A: No, but we’re always talking to our customers and studying the data. There are more vegans in the millennial generation than ever in history. They realize the epidermis is the largest organ in the body. They’re more conscious of what they put on their skin than ever, they want vegan, they want gluten-free, they’re thinking about what natural means to them. We knew there was demand for powerful products with natural ingredients. Our No. 1 (item), I call it my gateway drug, is our M-61 PowerGlow Peel pads. We sell one every eight seconds.
