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How The Three P's Work For Bluemercury Featured

  • Written by  Debbie Hauss
How The Three P's Work For Bluemercury

He was told his business plan wouldn't work, by a key business strategist. A specialty chain focused on personalized service can't maintain the desired quality of service across more than five stores, the business strategist said. But Barry Beck proved him wrong.

Bluemercury has delivered consistent success as a "friendly neighborhood store" offering "expert honest advice," said Beck during the 2015 Texas A&M Retailing Summit in Dallas.

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Recently celebrating its 16th anniversary, Bluemercury is now on track to be operating up to 150 stores in 2016; and the company was acquired by Macy's in March 2015 for $210 million.

Wait…Bluemercury was acquired by a Tier 1 department store chain? Yes, that irony is not lost on Beck. In an exclusive interview with Retail TouchPoints, he stressed that he and his wife, Bluemercury CEO Marla Malcolm Beck, will continue to run the day-to-day operations of the company.

With Macy's backing, Bluemercury will be adding mobile technology to the in-store mix, integrating a mobile platform to facilitate an omnichannel supply chain, including in-store pickup. Shoppers also should be on the lookout for Bluemercury stores-within-the store at Macy's locations in the near future.

The Three P's: People, Product, Place

Beck's three P's have helped secure Bluemercury as a fast-growing specialty retail business:

  • People = An innovative human resource model employing "Beauty Junkies";

  • Product = An ever-changing product lineup featuring private brand creation; and

  • Place = A "laser-focused" real estate strategy.

People

First and foremost, Bluemercury focuses on its people, said Beck. Every employee is offered a full-time position, with benefits and "a true career path," he noted. "They are the most powerful asset in our arsenal." In fact, 100% of the company's district managers were once Bluemercury store managers.

Because more than 50% of Bluemercury customers are coming in to the store to solve a specific problem, having access to knowledgeable store associates — or Beauty Junkies — is vital to the success of the company. "If our people solve problems for our clients, they will be customers for life," Beck asserted. "Our associates need to be human 'Googles' for our products."

Product

Beck and his team are not afraid to test and fail. Banking on the core concept of "newness," Bluemercury introduces many new products each year, knowing that most will fail. In 2014, the company launched more than 1,800 new SKUs, yet only 350 were successful. The good news is: those 350 SKUs garnered 80% of total revenue.

One of the goals for new products at Bluemercury is to uncover an "annuity SKU" —a product that customers return to purchase year after year, "something they can't live without," according to Beck.

Many of the new products introduced at Bluemercury are produced by M-61 Laboratories, a company founded by the Becks in 2006. The M-61 Skincare line — proprietary to Bluemercury — is one of the most popular brands in the stores.

Place

While much of Beck's approach to finding the best real estate for Bluemercury seems logical, at least one aspect is a bit atypical. Often several Bluemercury stores are clustered relatively nearby each other, which begs the question: Aren't you cannibalizing your own business? But, according to Beck, this clustered approach benefits the company by increasing brand awareness. "We are building a moat of convenience around our customers," he explained.

Unlike many chain store businesses, Bluemercury store formats are flexible and adaptable to their location and environment. They can range from 1,000 to 2,500 square feet. And this is a very hands-on approach for Beck, who visits and hand picks every new store location.

Beck's Humble Beginnings And Powerful Future

Beck's confidence and business prowess stem from both intuition and a lot of hard work. He was inspired at a young age by his father, who refused to take the easy way out and accept a position at his father-in-law's clothing manufacturing business. Instead, Beck's father built his own future as an intellectual property attorney. In turn, Beck cultivated a strong motivation to work for himself as an entrepreneur.

"My father said to me: 'I don't care what you do as long as you own it,'" he explained. Beck certainly took that advice to heart.

Prior to Bluemercury, Beck was a founder of Tower Systems, Inc., now known as U.S. Maintenance, a contract maintenance business serving national retail chains, which was acquired by The Emcor Group.

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