Dive Brief:

• Saks Fifth Avenue on Tuesday moved its beauty department from the first floor of its New York City flagship to the second — a major symbolic and operational step away from hallowed department store tradition. On social media the company tagged its revamp “the future of beauty on 2” and “beauty 2.0.” The move is part of Saks' "Grand Renovation" of its New York flagship, the company said in a press release.
• The new space is 32,000-square-feet, 40% larger than the one dedicated to beauty sales on the ground floor, and includes 15 spa salons, including ones for brow shaping and facial services, according to Saks. The remodel also includes an 850-square-foot flexible event area where the company said it will host beauty and wellness events. A new Jewelry on 2 department is also located on the second floor, according to a floor plan provided by Saks.
• Beauty experts staffed by the store provide advice on more than 120 brands, according to a Wall Street Journal report. Some brands, including Estée Lauder, are less than pleased with the change, according to the Journal.

Dive Insight:

Department stores are updating how they approach key categories to better compete with an onslaught of competitors who chipped away at core business lines. The beauty counter — really a collection of beauty counters often helmed by representatives of the brands sold there — has been a feature of most department store first floors, often near the entrance, for decades.

New specialty players, notably Sephora, in recent years have disrupted that by sweeping away the controlled, compartmentalized experience with a more democratic display of high-end cosmetics, self-service trials and expert, brand-agnostic staff. "Cosmetics are the last bastion of the department stores," Nick Egelanian, retail analyst and president of retail development consultants SiteWorks International, told Retail Dive last year.

The future of beauty is almost here. Coming soon, the new beauty floor on 2 at our NY Flagship. Stay tuned for more. #SaksBeauty pic.twitter.com/dbu65dC1kt

— Saks Fifth Avenue (@saks) May 1, 2018

Department stores are getting creative as they fight back against competitors with updates to both physical spaces and business models in key product categories. Saks said moving the beauty department from its traditional location was part of its overall growth strategy. "The bold decision to move Beauty to the second floor, from the traditional main floor model, allowed us to build a one-of-a-kind destination enabling Saks to create the epitome of an experiential beauty floor,” said Marc Metrick, president, Saks Fifth Avenue, in the press release announcing the move.

Saks isn't the only department store looking at traditional categories in new ways. Macy's established a foothold with its stand-alone Bluemercury stores, one of its best-performing segments. The retailer also offers a Macy's Beauty Box for $15 a month, including five deluxe beauty samples, plus a bonus sample and $5 coupon to use in-store or on Macys.com. More recently, Macy's also turned its attention to its flagship stores and revamped how it sells beauty with updated displays and a brand-agnostic approach to the category. The move marked a major departure from the days when brand-employed experts kept beauty offerings siloed. Instead, Macy's new beauty advisors, like those in the new Saks' space, have the ability to advise across brands and categories. 

Last year Hudson's Bay Company-owned Saks opened The Wellery concept shop — more than 16,000 square feet of immersive experiences dedicated to wellness also located on the second floor. The Saks Wellery featured curated products, classes and services for a limited time through last October. The new beauty space has now taken over.