By Catie Low
The hype over Sephora’s arrival has been building steadily since it opened its first Australian outlet in Sydney last December, and launched its Australian online store earlier this month.
Thousands of Sephora fans are expected to queue up for the official opening and even camp overnight to secure top spot in the line before the major opening, which will feature dancing, a DJ and the Sephora space cadets to celebrate “one giant step for beauty”.
Similar impact to fast fashion
The launch of the global beauty giant’s first store in Melbourne is expected to have a similar impact on the local beauty market to that of international apparel brands Zara and H&M on the fast fashion market.
It’s understood opening week sales at Sephora’s Australian operation rank it among the global chain’s top five most successful territories.
Retail consultant Brian Walker said the potential impact of Sephora on the department stores reached beyond their ground-floor beauty halls.
“The interesting thing about cosmetics in department stores is that there’s a natural lead-in to fashion, so any fall-off in sales, the adjacent categories will also be suffering,” Mr Walker said.
The Sephora brand was built on providing customers with choice and a multi-brand environment, where customers could easily compare products.
It’s a strategy that sets it apart from the major department stores, which run their beauty halls as a series of mini instore concessions with brand-aligned service staff.
However, David Jones has recently broken away from this model with the opening of its newest store in the Eastland centre in suburban Melbourne.
Beauty staff at David Jones Eastland are brand agnostic, a move retail analyst Peter Ryan said recognised the potential of the department store model as a destination, where shoppers could compare and contrast multiple brands.
Mr Ryan said Sephora’s arrival in Melbourne would have an immediate impact on the department store beauty sales as shoppers flocked to the exotic, international brand, but he said the longevity of this surge could be short-lived.
“They will feel a very large, immediate, short-term pain but I think it’s partly a response to the failure of the department store model,” Mr Ryan said.
Analysts claim the Sephora launch will put pressure on Myer and David Jones to cut prices and as a result margins on popular cosmetics, triggering a beauty battle just weeks out from Christmas.
Mr Ryan said Sephora chose store locations as close to the department store beauty halls as possible to entice regular Myer and David Jones shoppers to make the switch.
“If I was one of the department stores I would be biding my time to see where the dust settles. But I think the impact of this will be very similar, in the short term, to the effect the arrival of the fast-fashion brands had on the department stores,” Mr Ryan said.
First published in Sydney Morning Herald, 30th November 2015.