‘Members-only’ treatment retains, attracts reward-seeking shoppers

LITTLE FALLS, N.J. —Specialty beauty retailers are beefing up such enticements as customer-loyalty programs and purchase rewards in an effort to retain customers and attract new ones, spelling increased competition for such pharmacy retailers as CVS with its ExtraCare loyalty card, according to a recent study.

According to a newly published study by management consulting and market research firm Kline & Co., such beauty retailers as The Body Shop and Ulta are banking on multichannel sales and personalized customer-relations strategies to remain competitive.

Meanwhile, department stores are taking a multichannel approach, utilizing in-store, online, direct mail and telephone contact to drive growth. For example, NordstromBeauty.com is designed specifically to announce new products and events. The site also lists a toll-free beauty hotline number that customers can call to speak with consultants about the product lines.

Kline estimates that sales of beauty products through department stores will grow 3 percent through 2011, compared with only 2.7 percent growth expected for the overall market.

Retailers also are adding a personalized approach to help foster customer loyalty by maintaining purchase diaries to make replenishment purchases easy, delivering personal phone invitations by in-store beauty consultants and hosting member-only events.

Such efforts are critical in today’s market, where beauty shoppers look for service, rewards and atmosphere in exchange for their dollars.