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Can Shoppers Drug Mart’s enhanced beautyBOUTIQUE concept overtake Sephora in the Canadian luxury beauty market?

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This article includes an analysis of the similarities and differences between Sephora and Shoppers Drug Mart’s beautyBOUTIQUE concept, as the two retailers compete for Canada’s cosmetics dollar. It expands on our previous article about Shoppers’ opening a flagship beautyBOUTIQUE in Downtown Vancouver

By Steph Chiu

When you think of shopping for luxury beauty products, Sephora is the name that comes first to many of our minds. Since 2004, the French beauty brand has opened over 38 stores in Canada. Sephora is known for offering high-end brand name products in its bold and modern stores accented throughout by bright lighting, providing the ultimate luxurious retail environment for shoppers. 

Canadian drugstore chain Shoppers Drug Mart is also a popular destination for beauty-seekers, with cosmetic and fragrance products sold in its numerous locations across Canada. Many of its drugstores include a dedicated department for cosmetics known as the “beautyBOUTIQUE”, featuring brands formerly exclusive to department and specialty stores. These partially-separated boutiques are distinguished by more contemporary fixtures and softer lighting. First launched in 2003, Shoppers has since expanded the concept to over 300 stores nationwide. 

Typical store interior for existing beautyBOUTIQUE locations [Image Source]

Shoppers also owns six standalone specialty beauty outlets called Murale. It competes in the luxury beauty market. With its sleek design and higher-end product offerings, Murale allowed the retailer to better compete with the likes of Sephora. First opened in 2008, the upscale concept was predicted to expand to 50 locations within five years, but its fate is now uncertain with two of its original eight stores shut down just last year.

Murale store exterior [Image Source]
Murale store interior [Image Source]

As increasing competition looms from Sephora and Amazon in the Canadian market for luxury beauty products, Shoppers has responded by enhancing its luxury offerings through its beautyBOUTIQUE concept. A prototype of the updated concept was first launched in November 2012 at Bayview Village Shopping Centre. A second enhanced beautyBOUTIQUE was opened at Toronto Eaton Centre in August 2013. The new boutiques offer 21 prestige brands such as Guerlain and Chanel, currently carried at Murale but not at existing beautyBOUTIQUE locations. New modern fixtures, digital signage, and ambient lighting have also been introduced to provide an “elevated prestige beauty experience” to customers. 

Updated signage and storefront of Shoppers Drug Mart at Toronto Eaton Centre [Image Source]
New fixtures and signage in the beautyBOUTIQUE [Image Source]

At first glance, the new beautyBOUTIQUE stores by Shoppers may remind many of Sephora stores. Let’s take a closer look at how these two competitors compare.

Store Design: The beautyBOUTIQUE experience is now much more upscale; Shoppers has used many of the design elements featured in its Murale stores and brought them over to the new beautyBOUTIQUE. With the updated fixtures, signage, and lighting, the store design looks strikingly similar to Sephora stores. Products remain merchandised by brand in both stores. 

New beautyBOUTIQUE concept [Image Source]
Sephora Store Interior [Image Source]

Product Offering: The main selling point of the new beautyBOUTIQUE’s are the prestige brands now available. With luxury names like Chanel, Guerlain, and Yves Saint Laurent, Shoppers is much better positioned to compete with industry players like Sephora. This is an amazing feat for the drugstore retailer: Shoppers has come a long way in overcoming the stigma of selling luxury products in its stores through the evolution of its beautyBOUTIQUE concept and the success of their Murale chain. 

Although Sephora offers a much wider range of brands, the one advantage that Shoppers has is its comprehensive line of Chanel products, which are not currently available at Sephora stores in Canada. The beautyBOUTIQUEs also feature new fragrance testing spots and “play stations” for customers to touch the products.

Services: Both Shoppers and Sephora offer specialized services for customers in their stores. As in existing beautyBOUTIQUE locations, beauty advisors are on-hand to provide expert advice and makeup artists are available as well. The area has been given a design upgrade as mentioned above. In Sephora, makeup applications are also available in what they call their “Beauty Studio” section of the store.

Makeup applications available in the new beautyBOUTIQUE [Image Source]
Sephora Beauty Studio [Image Source]

Sales associates in the beautyBOUTIQUE stores focus on cross-selling products across all brands, rather than the traditional department store practice of having individual brand consultants. This is a well-known practice in Sephora stores and allows the associates to provide the most knowledgeable, unbiased service to its customers. 

Customers and Loyalty Programs: Shoppers Drug Mart is one of the most trusted and recognized names in the Canadian retail landscape. The Shoppers Optimum loyalty program boasts over 10 million members (almost one in every three Canadians), representing a wealth of valuable customer data, and Optimum points can be earned and redeemed on almost anything in the store. This is a huge advantage that Shoppers can leverage as it strives to expand its presence in the luxury beauty landscape. While Sephora also has a loyalty program called “Beauty Insider”, including a premium level with exclusive perks for V.I.B. (Very Important Beauty Insider) members, Sephora’s version lacks the scale and flexibility of the Shoppers Optimum program.

E-Commerce: With the expansion of the beautyBOUTIQUE concept, Shoppers has updated its website to include a useful brand finder tool and selected product information on its new brands. However, the website is very limited, and while you can shop for Murale products online at murale.ca, an e-commerce platform for beautyBOUTIQUE is not yet available. Given that the option exists for Murale, it seems like only a matter of time before Shoppers will begin to offer a way to buy beautyBOUTIQUE products online. Doing so will allow the retailer to compete even better with Sephora, who launched its Canadian e-commerce store, sephora.ca, in late 2012.

Conclusion
Overall, the future looks bright for Canadians eager to buy luxury beauty products with the many new offerings being introduced to the market. Shoppers’ enhanced beautyBOUTIQUE concept is visually stunning and presents a definite competitive threat to Sephora. We will be keeping an eye on potential expansions of the concept to more stores, as well as the possibility of an online store being introduced.

Steph Chiu is an Honours Business Administration student, currently attending the Ivey Business School at Western University.  

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