PORTFOLIO COMPANY NEWS
February 28, 2017
For 40 years, Cos Bar has run a small operation selling expensive creams, serums and cosmetics to wealthy women in vacation destination cities like Vail, Aspen and Carmel. To its affluent customer base, who typically fall in the 35 and up range, a $795 night cream is nothing to bat a well-moisturized eye at.
Now, Cos Bar is going through a growth spurt, fueled by a newly digital strategy. Founder Lily Garfield, who had self-funded her 14-store fleet since its launch in 1976, took her first outside funding from private equity firm Tengram in 2015. Soon after, Cos Bar launched an e-commerce store. Last year, Garfield brought on David Olsen as CEO, the former global vp of Yoox Net-a-Porter, the company that sells a similar set of luxury beauty brands in its online store.
Cos Bar's driving its growth through a focus on digital, but don't consider it a Sephora copycat. At the core of Cos Bar's digital renovations isn't e-commerce, or augmented reality, or a jazzy mobile app. At Cos Bar, according to Olsen, changes are made to support top-notch customer service.
"We want to give the customer the same experience, no matter where she is or how she wants to shop," said Olsen. "At the center of that is customer service. It's essential for us."
Cos Bar stores are manned by beauty and skincare specialists who often know clients by name, according to Olsen. Unlike department stores, which outsource cosmetics department staff to brand sales reps working on commission, Cos Bar encourages shoppers to mix and match products for the best results. And unlike Sephora and Ulta, Cos Bar locations are small and tailored to their neighborhood environment. Sales reps who know the community are hired to run stores. As a result of that concentrated customer service, orders add up: According to the company, it's not unheard of for Cos Bar customers to drop $10,000 on one order.
"The conversation in stores goes: 'Hi, Sue. Are you out of your La Mer? Have you seen this new lipstick we got in? This color would look great on you,'" said Olsen.
Olsen's steps to grow Cos Bar's digital footprint revolve around the company's staff. Cos Bar uses Retail Next data as a physical iteration of Google Analytics (something that hip, millennial brand Reformation has also tested). The data reports how many people enter the store each day, where they linger and whether or not they ultimately chose to buy. Using wifi, the tool pulls customer profiles from shoppers' phones. It's all a bit Big Brother, but Olsen said he's already seen average order values increase. The reports are shared with store managers so they can figure out how to best organize their merchandise.
"I don't know if other stores share this type of information with their managers, but I believe in sharing with the entire company," said Olsen. "It gives managers the ability to re-merchandise their own stores and make educated decisions."
Store associates also work with the Cos Bar marketing team to give input on what products are trending and should be included in customer emails and on social media. In the retailer's Facebook Live debut, two store managers and beauty specialists gave Valentine's Day gift ideas on camera. Olsen said 50-somethings were making purchases based on what they saw. Cos Bar gives sales associates commission for online sales. Cos Bar now has digitized its loyalty program to encourage cross-channel shopping.
Cos Bar is opening seven stores in 2017, focusing their brick-and-mortar efforts on areas that are a little bit pricey. Next up, Olsen will focus on implementing same-day shipping and click-and-collect, two tools he thinks harbor a community feel.
"We're heavily focused on opening new stores, so equally important is making sure we get the right staff in place and roll out these tools to give them the ability to provide the best service," Olsen said. "This is why we've survived for 40 years."