Beauty brand Glossier may officially be expanding beyond its own stores and website for the first time with Sephora, but savvy shoppers have taken to social media to report that they’ve found the brand sought elsewhere – and discounted to boot – at TJ Maxx and Marshall.
Other social media users have also recently found bargains at a mix of low-cost retailers on premium brands including: Laneige, Briogeo, Supergoop, Fenty Beauty, Smashbox, Estée Lauder, First Aid Beauty, Kylie Cosmetics and Nars, just to name a few.
While beauty has long been in the off-price category, TJ Maxx, Marshalls, Nordstrom Rack and others have gained more access to in-demand beauty products over the past five years, and there are several reasons why. to that.
“Off-price retailers are the most opportunistic whenever there’s some kind of dislocation and there’s clearly been a major dislocation in 2020, so they’ve gotten their hands on a lot of incoming inventory, which allows them to store in these sections with more consistency. It felt more like a traditional merchandising assortment than this one-off sale,” Jefferies analyst Steph Wissink said.
“Going even further, you now have brands that are open to the concept of selling at a discount,” she continued. “The channel has been legitimized just like the club channel or the dollar channel, and you see brands strategizing. If you walk into a Nordstrom Rack store today, you’ll see bold displays of beauty brands and these aren’t out of stock. These are products designed for the off-price channel, just like fashion companies. The evolution is exactly the same.
In Glossier’s case, select TJ Maxx and Marshalls stores, both part of The TJX Companies Inc., recently stocked items like Generation G matte lipsticks and Cloud Paint liquid blush, along with reports that they were stealing shelves.
A spokesperson for The TJX Cos. declined to comment. A representative for Glossier, which recently named Kyle Leahy as general manager and plans to open a store in Williamsburg, Brooklyn, New York, also declined to comment, but a source familiar with the matter confirmed that Glossier is available in off-price retailers for a limited time.
According to Wissink, the reason more and more brands are selling directly to the off-price channel is that in recent years these stores have gained access to more frequent customers with family incomes that are beginning to challenge larger stores.
“For a lot of these beauty companies, it’s not just an inventory cleanup destination, but in some cases it’s a strategic growth destination in terms of consumer destination,” she added. . “It’s not so much negative as it used to be. When we found brand name products at bargain prices five or six years ago, we worried about their inventory management. Now that’s a by-product of the supply chain, but it’s also because off-price retailers have built stronger customer databases that actually legitimize their customer frequency and the average income of their housework.
When it comes to the planned buying model, brands and retailers sit down with shoppers in the off-price category and they strategize around which products in the assortment would make the most sense, according to Wissink.
More recently, there has been another factor in the mix. After months of shipping delays triggered by the global COVID-19 pandemic, there has been a massive influx of orders, leading to oversupply, with anecdotal evidence that this is more of an issue for retailers than brands. themselves. As a result, this led to more products ending up in the off-price channel.
In an earnings call with analysts to coincide with The TJX Cos. second quarter fiscal 2023 results, when describing the favorable buying environment, Chairman and Chief Executive Officer Ernie L. Herrman said, “I hesitate to use the word unprecedented, but I would say it’s on a different level than what we’ve seen and it’s across our good, better and best zones…for Q4 giveaways I think we’re going to have some of the best branded content that we’ve had for a while. And on another earnings call, Burlington Stores CEO Michael B. O’Sullivan told analysts the buying backdrop is now “better than it has been in years.”
“Many retailers and suppliers have over-ordered and over-produced compared to what they are currently seeing in their sales trends,” O’Sullivan said of the increased supply. “Also, I think retailers and sellers have probably built a cushion into their orders to account for shipping delays, and those shipping delays have now eased, so they have too much merchandise. And finally, the mix of goods that the consumer buys has really changed, and I think that took some sellers by surprise. So there are certain categories where there is now what I would call a glut of supply.
When asked if this buying environment will last, he said it was hard to know. “If the economy weakens, we could see even more durability of goods. The other complicating factor however is COVID[-19] situation in China. It’s unclear what impact the recent closures there might have. But they could create shortages later in the year. It’s possible. But on the other hand, if sellers overcompensate, they could increase the availability of goods. We will have to see.
But with an oversupply of products, there is also fear of a gray market when items are traded through unofficial distribution channels, with the risk of products expiring or even being counterfeit. To avoid this, experts advise consumers to always check labels carefully – especially expiration dates – before purchasing.