Harrods' move into standalone beauty stores, will it be an H for happy one?
Would a rose by any other name smell as sweet? That’s a question surrounding the announcement that Harrods, arguably the most famous shop in the world, is opening a network of beauty stores.
The new concept is going to be called “H Beauty” in a move away from the green and gold of the familiar Harrods branding. The first store will launch in spring 2020 at the intu Lakeside shopping centre in Thurrock, closely followed by a second store in Milton Keynes.
At the same time, Harrods also opened an “H Café” in Henley-on-Thames. Opened last month, it aims to be somewhere you can enjoy the Knightsbridge department store's food while also having a selection of food, drink and home accessories to shop from. You can also shop on the Harrods website and use click and collect to pick up your purchases.
What both these concepts have in common is the lack of the Harrods name; arguably their greatest asset. Is this a branding mistake?
Eric Musgrave, fashion industry commentator and former editor of Drapers, says: “Apart from its less-than-impressive airport shops, which always seem like upmarket tourist boutiques, Harrods has resisted the chance to open stores beyond Brompton Road. I am sure the airport shops take loads of money, but the strategy of maintaining just one ‘real’ Harrods seems eminently sensible.
“Harrods did not open regional satellites like its direct upmarket department store rivals, Harvey Nichols (six UK regional stores plus one in Dublin) and Selfridges (three regional stores, including two in Manchester). If you want the Harrods experience, there is only one place to go. It’s a compelling argument,” he says.
“With reference to its two ventures into beauty and into a café, it is significant it is not using the Harrods name,” says Musgrave. “It is using H. That seems sensible to me. Will the connection to consumers be obvious? These are clearly an experiment that could be quietly closed down if they don’t work and gently extended if they do. On the face of it, it is a curious move, but I do not think it is danger of diluting the main Harrods brand,” he says.
The new beauty boutiques will host new brands to Harrods and offer services such as blow-dries and facials plus a “coffee-to-cocktail” bar for the complete shopping experience. Harrods said the launch is part of its efforts to “disrupt the UK beauty retail landscape” by bringing its brand to a wider audience across the UK. No doubt they’ve looked at the demise of the traditional department store and the success of Sephora globally, but not in the UK.
Annalise Fard, director of beauty at Harrods, said: “Nobody is doing or investing more to showcase to customers what is possible in the world of 21st-century beauty than Harrods. H beauty is an opportunity to bring our mission to more beauty lovers across the UK. This investment demonstrates our belief in the strength of our beauty authority and the opportunities within the beauty industry here in the UK and represents a major extension to our current beauty business.”
David M Watts, industry consultant, says: “It’s potentially a great money spinner as beauty is fast becoming the entry into luxury (whereas it was accessories and fragrance). Designer brands (Chanel/Dior/Gucci), celebrity-led Fenty Beauty and professional brands from Pat McGrath and Charlotte Tilbury have sold out in stores like Bergdorf Goodman in NYC. Beauty is a smart way to engage with customers with try before you buy, makeovers and allowing experimentation in store.”
“H Café is a good idea for brand extension again if done right. Ivy Club/Restaurant have done it and Vogue Magazine has created its café brand in overseas territories like Dubai, Moscow and Berlin,” says Watts.
Is it a mistake not to use the full Harrods name? “Possibly, but one assumes it will ally itself to the Harrods brand in some way with branding-colour design. Plus, they want to identify with a new market so a rebrand of the new offering is not a wholly bad idea.
“Beauty is an exciting category with big margins. The recent Gucci lipstick in vintage packaging is estimated to have sold 1 million lipsticks in its first month of launch at £34 per unit,” he says.
What advice would you offer them? "Include men's beauty – hugely growing sector, underdeveloped and a perfect opportunity to test customer reaction. ‘Men's Beauty’ (not grooming) is estimated to be $1.14 billion in 2019.
“Develop new experiential in-store concepts for men’s and women’s that gets customer engagement and generates buzz, allowing customers to create assets for Instagram and other social media platforms,” says Watts.
Julien Sheridan, Co-Founder & CEO www.sheridanandco.com, a global retail design agency, says: “I think it is a great idea. People like to buy luxury products in luxury surroundings, and I imagine that this will be a great success. They are extending an offering that they are already excellent at, not ‘having a go’ at something new.
“The brands that they sell can only be delighted, as they know that Harrods will have studied intelligently the data they hold before deciding to take this step,” she says.
“I like H Beauty. It gives them an opportunity to do their thing a little differently in here without upsetting the brand guidelines that they have in Knightsbridge. Harrods is Harrods, and H Beauty will be a little ‘lighter’ perhaps and a plus side of being out of Central London and with parking at intu this may be being positioned with a different customer in mind.
“Beauty, as a category is flying, and a career in beauty is now a very respectable, highly paid, arena to be in. I love the fact that they will be offering training, a beauty concierge and masterclasses,” she says.
“The advice I would offer them is ‘carry on Harrods, you know what you are doing, and you do it brilliantly’ so do not listen to the doubters. Beauty belongs to beauty, it is its own category, and a buying it in chemist shops does not ‘do it’ for a lot of people,” says Sheridan.
Other retailers will be watching what and how Harrods does here. Globally, the Harrods name is as strong as other great British luxury brands, regardless of ownership, such as Rolls Royce and Cunard, but, until now, and apart from the airport stores, it hasn’t tried to expand its footprint.
Why now? It’s a tough time in retail and many people say the beauty market, particularly the colour segment, has become saturated and is struggling.
Many people may wonder why Harrods isn’t putting its efforts into harrods.com. This has the potential to be a huge global player in e-commerce rather than a shop window for the Knightsbridge store.
“They have tried I understand, but inside sources tell me that it's so political and departmentalised that the e-commerce has always faced insurmountable obstacles,” says Watts.
“In terms of the business doing more online, I would counsel against that,” says Musgrave. “Except for a tiny bit of own-label merchandise (and more in food, obviously), Harrods sells only third-party brands. What it sells – and this is unique – is the Harrods experience that requires a visit to the store at Knightsbridge. I’d leave it at that,” he says.
With so much bad news in retail it will be very welcome, especially for the regional shopping store owners like intu, to have a new successful chain, regardless of the name. Harrods aren’t the first people to think of this beauty idea though, you only have to look at the new fancy Boots in Covent Garden, which has become something of an unofficial centre of beauty brands in London, with its beauty hall and YouTube studio, to prove how people are piling into specific beauty retail.
While there is scope to pick up the slack from the closing department stores, offer something fresher and more contemporary than, say, Space NK, and get in there early before the rumoured relaunch of Sephora in the UK, it is becoming more competitive. The Harrods' H could just swing it.