Selling To The “Suburban Power Woman”

In late June of this year on New York’s 6th Avenue, Bluemercury will be opening its 2,600 square foot flagship store in the base of a Hilton hotel.  It will be the retail cosmetics chain’s splashiest opening of the year — co-founder and COO Barry Beck told the Wall Street Journal that to his mind 6th Avenue is “the new 5th Avenue”— but it will be far from its only one.

While most retail chains (and even retail institutions like Bluemecury’s parent company Macy’s) are struggling and closing stores in droves, the high end spa, cosmetics and beauty chain is growing.  Over the course of this year, Bluemercury plans to open 40 news stores. Two of them will be in Manhattan, the rest will be spread through-out densely clustered suburban and ex-urban areas.

It’s pretty far to have come for a firm that came out of nowhere in 1999 to gradually take the world by storm.

“I was in my late twenties and was fearless – I wouldn’t take no for an answer and was going to build Bluemercury store by store, customer by customer, lipstick by lipstick, no matter what it took,” Bluemercury CEO and c0-founder Marla Beck has said.

Like many innovators, Beck was inspired by a bad experience – namely the one she was having at cosmetics counters in department stores.

Because, nearly two decades ago when Bluemercury started out, there were basically two options for make-up: Door No. 1, pharmacy or grocery stores for mass-market cosmetics of middling quality and Door No. 2, a department store beauty counter, where one could be sure of being underserved.

“The staff were snobby and pushy, checking out your shoes and handbag before they would decide to help you. To me, shopping for cosmetics was a problem that needed a solution. I thought, why can’t you create free standing beauty stores where the staff are trained in all brands, are friendly, and genuinely want to help you find the right, personalized solution.”

Bluemercury was the result of that vision – though getting there wasn’t always easy — since, technically, the company was founded at exactly the wrong moment for an up-and-coming cosmetics firm.

“[The company] survived the first dot-com bust, two recessions and [has] built a sustainable, revolutionary business that has endured from 1999 to present,” Beck said.

Getting to this point hasn’t been easy, she noted.  The firm nearly ran out of money entirely in its first six months of existence — plus, it found itself seeking VC interest in the wake of a crash NASDAQ and an investor class that had gotten much, much more cautious.

It was a difficult experience at the time – though it did make the firm more resilient  in the future that followed.

“We had to be scrappy and figure out how to build a real business with revenue and cash flow.”

They also had to sell others on the vision, which in the early days wasn’t easy going.  Free-standing cosmetics stores in the pre-Ulta, pre-Sephora wilds of the late 1990’s weren’t an immediately seller for some of the department store cosmetics brands. They passed.

The HR model also gave lots of cosmetics industry veterans pause – because it was such a radical departure from the part-timer worker, 15 – 25 hours-a-week model that had dominated the industry, as well as a move away from the slow season understaffing in  January, June, July and August.

“We thought, what would happen if we gave our staff full time work, benefits, and a career path?”

What they were often told was “nothing good” and that their HR model wouldn’t work.  As it turns out, according to their CEO, it has been the firm’s secret weapon.

“By retaining full-time staff, we also retain their knowledge, customer relationships, loyalty and expertise. Today, we have staff at Bluemercury that have gone from being sales associates (beauty experts) on our store floor making $16 per hour to being District Managers making six figures.”

And Bluemercury is as committed to expanding its product line as it is to the growth of its physical footprint and the expertise of is retail staff, Beck said.  That has included the founding  M-61, a vegan, paraben-free cosmeceutical brand and the creation two years ago of Lune and Aster, a vegan makeup line.

“We are laser focused in observing and listening to our customers’ needs. To build an enduring, scalable company, you must keep finding growth and look for the next white space. This is why we have been growing at double digits every year since our founding in 1999.”