Beauty giants invest heavily in physical stores

Major beauty brands are betting big on physical stores, defying predictions of retail’s decline. Rituals Cosmetics is leading the charge with a €40 million investment to revamp 1,500 boutiques across 30 countries in just 30 days. This ambitious move by the Amsterdam-based brand stands in stark contrast to the multi-year phased refits typically undertaken by retailers. Despite the rise of digital sales, Rituals is not retreating from physical retail but instead leveraging it as a cornerstone of its brand experience.

The project will unify skincare, makeup, hair care, and fragrance under a ‘Beauty World’ concept. Gregory Bruyer, Rituals’ CCO, emphasizes the importance of physical retail in delivering their brand experience.

A Race Against Time: Rituals’ Rapid Renovation

Rituals’ renovation involves 100 teams working simultaneously, transforming over 40 stores daily. The logistical challenge is immense, requiring precise coordination of materials, labor, and design across multiple countries and time zones. The project’s success hinges on meticulous planning and execution, with each team operating like a well-oiled machine to meet the tight deadline.

Despite 20% of Rituals’ €2.43 billion revenue coming from digital sales, the brand is doubling down on its physical presence. This strategy reflects a broader trend among beauty retailers, who recognize the unique value of in-store experiences in building brand loyalty and driving sales.

Beauty Giants Follow Suit

Douglas, Europe’s largest beauty retailer with a 23% market share in its core markets, plans to open 200 new stores and refurbish 400 existing ones by 2026. Their CEO, Sander van der Laan, highlights their ambition to grow through store expansion and market penetration. Douglas’s strategy includes a focus on premium brands and K-Beauty, catering to evolving consumer preferences. The new Luxury Flagship Store in Amstelveen, the Netherlands, exemplifies this approach, offering an raised shopping experience that blends luxury with accessibility.

Sephora is also adapting to changing shopping habits with a new boutique format, debuting in London’s Carnaby Street. This smaller, localized concept contrasts with traditional big-box stores, reflecting a shift toward more intimate and personalized shopping experiences. By reducing store size, Sephora aims to increase its presence in high-footfall urban areas, where convenience and accessibility are key.

These moves signal a shift in what beauty brands seek from physical spaces. They demand high-footfall locations, larger experiential areas for services like consultations and product trials, and faster fit-out turnarounds. This evolution in retail design shows the importance of creating memorable in-store experiences that cannot be replicated online. Landlords and developers must adapt to these changing demands, offering flexible spaces that can accommodate the unique needs of beauty retailers.

The Enduring Power of Physical Stores

Industry data reveals that physical stores remain integral to 80% of beauty customer journeys. The inability to return opened products and the desire to test before buying drive this trend. The tactile nature of beauty products makes the in-store experience invaluable, allowing customers to see, touch, and try products before making a purchase. This hands-on approach builds trust and confidence, which are critical in a category where personal preference and individual needs vary widely.

For retail landlords, this wave of investment from beauty brands is a welcome surprise. It indicates that these stores are seen as valuable marketing channels, not legacy cost centers. Beauty retailers are willing to invest in prime locations and innovative store designs to create destinations that attract and engage customers. This shift in perception has significant implications for the retail real estate market, as beauty brands become sought-after tenants capable of driving footfall and enhancing the overall appeal of shopping centers.

As e-commerce fatigue sets in, the sensory, in-person experience offered by beauty retailers is regaining its appeal. This makes beauty one of the most reliable anchor categories in prime European retail locations. The resurgence of physical stores in the beauty sector reflects a broader consumer desire for authentic, immersive experiences that go beyond transactional shopping. For retail professionals, this trend shows the enduring value of physical retail in an increasingly digital world.

The next 12 months will likely see beauty and wellbeing brands negotiating favorable terms for prime units. Their ability to drive footfall in an omnichannel world gives them a strong position in leasing negotiations. As landlords compete to attract these high-performing tenants, beauty brands are poised to secure premium locations at advantageous terms. This dynamic highlights the shifting power balance in retail real estate, where brands that can demonstrate their ability to enhance a property’s value are in high demand.