Target makes play for bigger piece of beauty marketplace

On a recent day during lunch hour, one of Target's newly trained beauty employees offered customers samples of a hand cream, a face lotion and a metallic liquid lipstick.

A few aisles down at the downtown Nicollet Mall store, Mike Pryor of Minneapolis was squirting various testers to smell colognes in one of the chain's first redesigned men's grooming areas, which now prominently features an expanded array of niche brands such as Cremo, Pacinos and Beardbrand and is cross-merchandised with other items such as fedoras.

"This is more like what you see when you go to New York to boutiques," said Pryor, who usually shops at places like Macy's for such items. "I like it. It's so open and clean."

Just as Target has refreshed its brands and in-store layouts in its apparel and home areas, the Minneapolis-based retailer is also giving its beauty department a top-to-bottom makeover with displays more reminiscent of what you might find at specialty stores like Ulta and Sephora.

The change comes as Target looks to find more growth in the category as other retailers struggle and as it looks to sharpen its game in the wake of Amazon's growing dominance online.

Target's beauty revamp also has included adding new up-and-coming brands alongside Unilever and L'Oreal; giving specialized training to employees to give more hands-on service and to run a sampling program; and rolling out a host of new digital and augmented reality tools.

Like other parts of retail, beauty is in the midst of disruption as social media has given a platform to a large crop of startups aiming to fill niches often overlooked by the bigger brands such as multicultural, natural and men's grooming products.

"People are hungry for new ideas that more reflect them rather than just relying on the mass," said Mark Tritton, Target's chief merchandising officer. "With the rise of newcomers and new ideas, it makes this a really kind of sexy place to play."

Target has added many new brands to its lineup, including eight new cosmetics brands geared toward women of color such as the Lip Bar and Every Hue Beauty, which are getting prime displays in select stores.

"The beauty industry is very dynamic," said Christina Hennington, Target's senior vice president of beauty. "There aren't as many barriers to entry. There are great labs out there that are doing a lot of the formulating. … So [the brands] don't need to own their own factory."

To help it identify some newer brands it might want to carry, Target recently held a mini-accelerator at its headquarters for 10 beauty-focused startups in the naturals, men's and multicultural space. The program, modeled after its more extensive Techstars program, just wrapped up.

Target has already decided to run a trial with one of the companies — Hue for Every Man, a multicultural men's brand — in a couple dozen Target stores this summer and on Target.com.

Kyle Frazier, one of the company's co-founders, said he started Hue for Every Man after getting frustrated when using the toiletries provided by hotels that didn't suit his skin or hair.

Many men don't even know yet that there are products out there that can better address their needs, he added.

"The women's market is so much bigger and more diverse, and the conversation is much more open," he said. "We feel like as a brand we're literally trendsetting the conversation."

Target's focus in beauty comes as specialty retailers such as Ulta and Sephora, as well as Saks Fifth Avenue on the luxury side, have been seeing impressive growth in the space.

"At the same time, for several years, department stores have lost their reputation or default as being the beauty authority," said Carol Spieckerman, a retail consultant. "Those velvet ropes that have defined the department store beauty experience are now seen as old school. Department stores are addressing that, but in the meantime it creates a big opportunity for specialty retailers and mass market, which are open to a more democratized beauty experience."

After testing a new, larger beauty department at its northeast Minneapolis store, Target rolled it out to more than 100 stores last year and is bringing it to 300-plus stores this year.

Instead of high, long aisles, the new layout includes lower tables. A bath-themed display features bath bombs, facial masks and sponges. Another is full of trial sizes of newer products to encourage shoppers to branch out without having to invest in buying a big jar or tube of something.

"It is intended to play up the discovery side as well as continuing to make it easy to find exactly what you want," Hennington said.

And the newer layout creates more defined men's and women's destinations.

"We know that men are more comfortable shopping for men's products when they're not close to women's products, so they're not going to bump into a tampon or something like that," Hennington said.

The men's grooming department — an updated version of a layout Target introduced last year with enhanced lighting, displays and a wider array of new brands — has been up and running at the Nicollet Mall store for about a week.

Ten other stores are getting it now, in addition to 80 more later this year. Target said it expects its business in men's grooming revenue to double by 2020.

The retailer has been asking brands to make smaller, trial sizes for men just as it has for women to encourage experimentation. The more conventional brands such as Old Spice and Gillette are still being sold.

"They are obviously still there," said Hennington, adding the big brands haven't lost any shelf space. "But we also hope we can attract more millennials who are actually looking for more solutions that they are having trouble finding without having to go to specialty stores."

In addition to the dedicated beauty employees in stores, Target continues to have beauty concierges on hand in about 350 stores to give customers advice and information about various products. The program, which has been around since 2012, is staffed by a third party that is funded by vendors.

As part of its enhanced digital tools, Target is expanding the beauty concierge service to also include an online or text chat option.

It's also trying out an augmented reality experience on Target.com in partnership with Perfect Corp.'s YouCam Makeup in which shoppers can virtually test out hundreds of cosmetics including different lip colors. The service also is available in 10 stores, including Nicollet Mall, via a digital screen, with plans to add it to more stores this year.

As Target focuses on beauty, there are rumblings it's also working on a new private-label brand in the category. Tritton declined to share specifics but said to stay tuned.

"We do see opportunities to play here — when and where will be revealed soon," he said.

Kavita Kumar • 612-673-4113