Fusion stores: How digital is saving beauty bricks-and-mortar

Physical spaces embracing in-store digital opportunities is now worth 20% of the cosmetics market

Sephora recently opened its smallest store ever

Fusion beauty stores now account for 20% of total market sales, reveals consulting group Kline.

Bricks-and-mortar stores that embrace digital opportunities have seen an annual growth rate of 19% since 2012.

Vertically integrated stores such as Ulta, Sephora, Bluemercury, Nyx, Kiko Milano and e.l.f. have been attributed to the growth.

“While traditional department stores experience declining traffic and store closures, brick-and-mortar is not a dying breed, but a rising phenomenon of specialty retailers and vertically integrated stores that set trends...offer solution-based approaches in digital formats and enhance the overall consumer experience," said Naira Aslanian, the study's Project Manager.

Sephora was highlighted in the report for its recent smallest store opening. Kline said its concept is one step towards creating more curated and digital experiences for consumers in the real world.

The research also points out that department stores are not giving up and instead mimicking the tactics of beauty brands.

Bloomingdale's, Nordstrom and Neiman Marcus were noted for being particularly innovative.

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