The addition of Chanel, Clinique and Estee Lauder labels at Federated Direct's macys.com signals a move by macys.com to position itself as a comprehensive destination for beauty products.
“It's our opinion that without the big brands you cannot drive the kind of volume that is needed,” said Dawn Robertson, president and chief merchandising officer of Federated Direct, New York. “It's always been in our plans to launch these key brands, and we felt that it was critical to get them launched for fourth-quarter and it is essential to our beauty strategy to have these brands.”
Macys.com is the first online department store to sell the three cosmetics leaders. The site now has 5,500 cosmetics SKUs and 150 cosmetics brands.
“Our plan is that we believe that beauty could be somewhere in the neighborhood of 10 percent of our [macys.com] business online with these new brands,” Robertson said. “Before we launched them, it was probably 2 [percent] to 3 percent throughout the year. Of course, it builds in the holiday time.”
While sales are not broken out individually, Federated Direct's macys.com, bloomingdales.com and fingerhut.com stores last year yielded estimated revenue between $200 million and $250 million.
Besides the added e-commerce potential, the inclusion of Clinique, Estee Lauder and Chanel adds a prestige factor. These three brands so far have sold only through their proprietary sites, Robertson said. This fact hobbled many online beauty retailers.
“The online space is still learning and growing,” Robertson said. “These brands are very concerned about their branding image, and they want to go and launch with somebody who is going to be supportive of their brand image and show their brands correctly.”
Alerting customers and prospects about the new brands at macys.com is key in the ramp-up to holidays. Macys.com has dropped 1 million e-mails to customers and prospects. Two more drops of the same size are planned, over the next several weeks.
Radio and television spots will break around Thanksgiving. Outdoor media such as taxi tops, billboards, bus stops and shelters will support the campaign.
“Our goal is always to be an extension of, and integrated with, our [Macy's] retail stores,” Robertson said. “We want to be able to offer those customers several ways to shop. We always want to drive traffic back to the stores.
“In the past, we have dropped the e-mail when the stores are going through a major cosmetics promotion, and it has driven people back to the store,” she said.
Now, as macys.com is seen to have matured, it will launch new fragrance or treatment products or brands in lock step with its offline Macy's East and Macy's West stores.
“We believe it's a great product category to sell online,” Robertson said. “Fragrance, because it is a terrific gift as well as a self-purchase. And treatment, which is really what makes up a large part of the Lauder, Clinique and Chanel business.”
If successful with these three brands, Federated Direct may work with them to consider their sale on bloomingdales.com.
“I think that we will,” Robertson said. “We have not submitted those plans to do so. We've taken a different approach. We're very slow and steady about additions. We make sure that what we do works. We test it and if we're sure it's very successful, we'll roll it out.”