This retail channel is in a high-growth mode

Beauty stores are hot — and shoppers around the globe can’t seem to get enough of them. 



With hundreds of new door openings during 2015-2016, boutique beauty stores remain on a high growth trajectory, according to an upcoming study from market intelligence and research firm Kline.



Vertically integrated beauty specialty stores offering an immersive, single brand experience and supported by cult-like followings of younger generations, including millennials, are seeing expansion across multiple countries, the report finds.



These freestanding stores offer unique concepts, a fun environment, and highly knowledgeable staff. They also give customers the advantage of trying out products and in-store guidance.



“Boutique retailers offer a fun and interactive environment that isn’t found in other channels, which is appealing to younger, digital consumers,” noted Ewa Grigar, the study’s manager.



“It is almost like a cult, the followership is often buying into the exciting concepts of these stores virtually more than the products themselves.”



According to the Boutique Beauty Retailers: Channel Analysis and Opportunities report, many brands are opening their first stores or dramatically expanding their existing number of openings, particularly in Europe and the United States. 



Also, several large, multinational brands are also opening their first beauty boutiques. British designer Burberry opened a high-tech beauty boutique in Covent Garden. L’Oréal’s recently acquired NYX Professional Makeup brand has grown from one store to 20 in a single year, while its L’Oréal Paris brand opened its first branded cosmetics store in Paris in September. And in November, Estée Lauder debuted its first store with its millennial-focused collection, Estée Edit, in London’s Carnaby Street.



There is also fast expansion of retailers from abroad. Players, such as Israeli Sabon or Dutch Rituals, which is among the fastest growing retailers in terms of sales and door counts, have recently focused on international expansion.



The success of this new wave of beauty stores depends on whether brands can keep up with the pace of younger consumers’ digital needs, as well as keep a store’s levels of innovation and engagement high, according to Kelly Alexandre, a key analyst for the report.