Beauty in Retail Stores

Innovate boldly or fall behind

The beauty industry is a global success story, but the unstoppable evolution of retail requires that brands rethink their marketing strategies. According to NielsenIQ, beauty product sales in retail stores grew at an average of 7% annually from 2021 to 2023. However, foot traffic in stores is decreasing. Recently, from December 2024 to January 2025, the number of people visiting US stores declined by 2%.  Indeed, the demographic changes communicate that a significant shift in beauty shopping behavior is speaking loud enough.

The good news is that beauty shoppers still make the most of their trips in physical stores, 34x per year vs 16x per year in online stores. Indeed, embracing today's consumer demands will be crucial to increasing traffic.

Looking to boost foot traffic?

Check out the following strategies to transform your shopping experience.

1. Unlock Future with AI Agent

2025 is the year of AI agent. Right now, digitally influenced sales exceed 60%.  Businesses using AI-driven personalization have seen an average 10-30% increase in sales. As the first phase, optimize your POS system according to today’s beauty shopping metrics.  Then, robust your software with the integration of AI agent to provide the following services.

• Differentiation in Customer Experience, according to client needs, previous purchase history, consumer interest, and trends.

• Inventory Management Optimization, proving precision of demand estimation.

• Predictive Analytics, to support your marketing efforts with knowledgeable data to educate and support the sales staff speech.

• Cross-selling with other departments during their virtual proposal.

  
  

In short, AI shopping assistants offer retailers the chance to create more meaningful and unique connections to keep the customer's shopping preferences in physical stores.

2. Introduce new brands GenZ will love

As mentioned in a previous article, GenZ is the largest generation in history, and it will change everything.  GenZ will be the wealthy generation with the highest spending power, which is expected to grow 12 trillion in 2030; this is reason enough to pay attention to them.

One of the top brands today is  Rare Beauty by Selena Gomez, which reported 400 million sales in 2024 with 14% vs 2023 (est.).  In fact, during the last two years, the most significant sales gainers were e.i.f. Cosmetics with 1.3 billion in sales and 46% vs 2023, followed by Rare Beauty – proven which consumers are rising.    

Remember, this is a digital generation, very influenced by social media. For example, imagine visiting a store with a beauty counter adapted to these new consumer preferences, including a social space with a big smart mirror as a beauty advisor where you can view your cosmetics and clothes look recommendations and share them on your IG or TikTok accounts. And all this is happening in a physical store.   So, to increase your foot traffic, focus on GenZ.

3. Prioritize Social Commerce investment

Today, consumers have more choices than ever. Brands fight for consideration, attention, and loyalty. However, despite the increasing online consideration, 85% of consumers usually shop at a combination of physical and online stores. Once again, you must invent social commerce to connect with new consumers such as GenZ.   

TikTok is on rising power, with 1 billion users, and is the #1 app for entertainment, ideally to build connections.  In 2024, the hashtag #TikTokMadeMeBuyIt  has garnered 8M posts globally. Also, 48% of users confirmed they made an immediate purchase after watching a TikTok video. Still, the most interesting insight is that 2 in 5 users who discovered a product on TikTok visited a physical store to buy it. 

4. Differentiate your Loyalty Program

Customer love loyalty programs, and as we know, they used to spend more if their shopping experience is rewarded. The top loyalty programs see a 15-25% annual revenue increase from customers who use them.  Sephora has over 31 million US members today, and their loyalty program members represent up to 80% of their total sales. So, to work on an upscale loyalty program, consider the following suggestions. 

• Offer travel-size products & special gifts. 

• Always provide free samples.

• Increase the benefits for members affiliated with your credit card store. 

• Extend the program benefits to your e-commerce. For example, consider offering free shipping benefits by tiers. 

• Create exclusive events for top client members affiliated with your credit card store with significant spending history based on tiers. 

• Monitor their progress in sales and work periodical satisfaction surveys to confirm the program's success. 

Sources by Nielsen IQ, Codiant, WWD & Forbes Magazine.

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