Fast Five Shorts | Does The World Need Amazon’s New Beauty Store In Italy?
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Simbe, and Ocampo Capital Chris Walton and Anne Mezzenga, along with special guest hosts from the A&M Consumer & Retail group David Brown and Lisa Collier discuss: Whether The World Needs Amazon’s New Beauty Store In Italy?
For the full episode head here: https://www.youtube.com/watch?v=W5GLcP12oeI
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Transcript
Amazon has opened a new beauty and personal care store in Italy.
Speaker A:According to chain Storage, located in Milan's busy city center, the new Amazon Parapharmaca.
Speaker A:I don't even know Parapharma, Parapharmacia and Parapharma.
Speaker A:Parapharmacia.
Speaker A:Okay, all right.
Speaker A:Parapharmacia and Beauty Store provides a curated selection of beauty and personal care products and is part of a broader effort by Amazon to expand its online beauty and personal care product offerings across across Europe.
Speaker A:The store features two distinct areas.
Speaker A:The first, the central hub of the space or the quote main gallery, end quote, showcases a selection of beauty, personal care and dermatologically recommended brand name products.
Speaker B:Wow, way to go with dermatologically.
Speaker B:You nailed it.
Speaker A:I mean, some words I can pronounce clearly.
Speaker A:I must have to go to Milan to work on my Italian.
Speaker A:Chris, I think that's just the pharmacy.
Speaker A:It is.
Speaker A:Yeah.
Speaker A:You know, I know, I know.
Speaker A:I mean, even my Italian heritage is not helping me here.
Speaker A:Okay, then we have the Quote Place and Learn and Quote stations which feature interactive digital displays that enable customers to learn more about products by playing educational videos about select items when they're placed on a designated tray.
Speaker A:The second area, the Derma bar, is an experiential area that provides customers complimentary digital skin analysis using technology and product recommendations from beauty experts.
Speaker A:Using digital tools, customers can obtain a comprehensive report on their skin type and condition by having their skin analyzed at 1of3Digital Skin Analysis stations.
Speaker A:Beauty experts then provide product recommendations based on the results.
Speaker A:David, I know you are very, very stringent about your skin care routine, so I'm going to go to you first.
Speaker A:I want to know, David, what's your hot take on Amazon's new beauty store in Italy?
Speaker A:Does the world need it?
Speaker C:Yes, I actually love this one.
Speaker B:You do?
Speaker A:Oh, wow.
Speaker C:For a couple.
Speaker B:Why?
Speaker C:One beauty space is just a great space and I think will continue to be an interesting space going forward, but I think it's in line with Amazon's premiumization play that they're doing right.
Speaker C:So as they no longer are necessarily the cheapest in anything they do.
Speaker C:I mean, you know, kind of that's well proven out or you know, across the website, across everything else and they go category by category and you know, kind of attract, try to attack categories.
Speaker C:This is a perfect premium play in the category.
Speaker C:You don't want to be in the race to the bottom and you know, open a cheap store full of Maybelline and Revlon and then you're just competing with convenience.
Speaker C:I think this is the way to go.
Speaker C:They're essentially attacking Sephora.
Speaker C:And you know, it's potentially a better version of Ulta because you have the self help, not only the self help, you have experts in the store.
Speaker C:You, you know, you potentially have even higher trained people and higher level pharmacists, et cetera.
Speaker C:So great category, great strategy.
Speaker C:I think this one's a home run.
Speaker A:So wow, is, is the Milan play then you think?
Speaker A:Because they're going after luxury or why do you think they chose Milan as this location, as the first location?
Speaker C:Well, I think the obvious reason they chose is because we were supposed to do this podcast as a store visit.
Speaker A:Clearly I can't even see the word of the store.
Speaker C:But no, I think that's the logic.
Speaker C:I mean the two choices, right, was either Paris.
Speaker C:I wouldn't be surprised if the next one's in Paris.
Speaker A:Really?
Speaker C:So staying international kind of city centers.
Speaker B:Trying to go up market, huh?
Speaker A:Okay, interesting.
Speaker A:Lisa, do you agree?
Speaker D:You know, I, my reaction was I think it is a great, similar to David's.
Speaker D:It's a great play on luxury.
Speaker D:It's a great play on a very hot trend that spans generations.
Speaker D:I think it's important we know from 10 year olds to, you know, 70 year olds, everyone wants to look and feel good and are really spending a lot of time thinking about skin care and how they look and taking care from a health perspective as well.
Speaker D:And I think the interactive part is amazing and I do think it is a play on luxury.
Speaker D:But I, the question I thought is, do we need it?
Speaker D:I don't think we need it.
Speaker D:That's the only difference.
Speaker D:I think it's an interesting play for them.
Speaker D:I think it makes them smart.
Speaker D:The other thought I had last night as I was thinking about it, they're probably doing this research to figure out what their Amazon private label play is in the beauty space because they're doing testing etc and so that was a last minute thought I had.
Speaker D:Like, are they really thinking about how to do private label lab work and information and get insights on other brands and products?
Speaker A:Yeah, that makes a ton of sense.
Speaker A:Actually, Lisa, I just following your thread, I mean I, I honestly think this is a research project for Amazon.
Speaker A:I don't even know that.
Speaker A:I mean all the telltale signs are there, the interactive, you know, experiences.
Speaker A:This is like a glorified pop up to me for Amazon to test, you know, what's the demand in Europe for especially some of the American skincare brands and some of the other American makeup brands.
Speaker A:It's, in some cases it is a lower price point than you might be able to get for some things that are in Europe right now.
Speaker A:So I think it's, it's 100% a test.
Speaker A:Just like the, you know, the salon.
Speaker A:Like, we haven't talked about the salon that they opened in London for.
Speaker A:You know, that was four years ago.
Speaker A:It's still open.
Speaker A:I think this is a testing ground where, just like you said, they're getting information about what products are in demand in those areas, what's being tested.
Speaker A:Like, they can gather all of this information and then decide what they're going to do with it.
Speaker A:But, Chris, I, I'm going to let you close out because I've got a feeling that you don't agree here.
Speaker D:I don't know what it is.
Speaker A:Maybe just years of working with you, but, but what are your thoughts on.
Speaker A:On the Amazon beauty store in Milan?
Speaker A:Chris?
Speaker B:Yeah, I'm actually, I'm kind of gobsmacked that everyone is kind of positive about this.
Speaker B:Like, I mean, I mean, Lisa sounds like she's kind of hedging a little bit.
Speaker B:Like she said the world doesn't need it.
Speaker B:And I tend to agree with that.
Speaker B:I mean, I just look at, I mean, my take on this is, like, I looked at the pictures, the environment looks so sterile and unappealing to me, which is my main issue with every store that Amazon opens.
Speaker B:The devil's in the details.
Speaker B:Like, is it a concept that could work?
Speaker B:Yes, but you have to, you have to create the store in the right way.
Speaker B:And this store feels like it's designed by tech nerds to showcase technology as opposed to actually merchandising products.
Speaker B:And that's what the whole press release was about.
Speaker B:So.
Speaker B:So I'm skeptical of them being successful in the long run opening any store, you know, when that's the approach that they take.
Speaker B:And I remember listening to an interview with Jeff Bezos, like, a few years ago.
Speaker B:He's like, we're only going to go into physical stores if there's a real, real differentiation play to us being in that physical store.
Speaker B:And, and these tech gimmicks are not that to me.
Speaker B:Like, I just, I just don't see it working.
Speaker B:I don't see them being able to capture the luxury market because Amazon just doesn't.
Speaker B:Just doesn't connote luxury, even though they may want to move up that way, you know, as David said.
Speaker B:But I don't know.
Speaker B:That's my.
Speaker A:Chris, do you.
Speaker A:Does that change for you?
Speaker A:If you look at this not as like we're rolling out multiple stores and it's a one store experiment.
Speaker A:Like they are gathering data on.
Speaker A:Like are you putting La Roche posay on the, on the, you know, skin care demonstration?
Speaker B:Got to get a lot of people into the store to do that.
Speaker B:And from their past store experiments, they haven't had that much traffic to pull that off either.
Speaker B:And the other thing that pisses me off too, just to get on my soapbox, is I get tired of giving Amazon license to do anything they want just as an experiment.
Speaker B:Some experiments just aren't smart.
Speaker B:And I don't know, this could be one of them in my mind.
Speaker A:Interesting.
