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Retail  Disruption  In  Practice:  Brand  Growth  Success  Stories

Barry  Beck,  Founder  and  COO,  Bluemercury

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Friendly  neighborhood  store  where  you  can  get  expert  beauty  advice

Bluemercury Today

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Our Business Model: Friendly Neighborhood Store

PERSONAL  CURATORS

MOM  &  POP  BUSINESS NEIGHBORHOOD  LOCATIONS

SPA  SERVICES ASSISTED  OPEN  SELL

TEAM  OF  BEAUTY  EXPERTS

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She looks to Bluemercury for solutions to her beauty problems

The Bluemercury Customer is affluent, educated, and very busy!

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38%suburban  

power-­‐Mom

2.6%recent  

college  grads  in  cities

6.6%suburban  

professional  superwoman

2.5%urban  family

12%suburban  

empty  nesters

7%suburban  boomers

2%urban  

boomers

29.3%urban  professional  

superwoman

highly educated30% $150k+  

income 80% professionals 12x annual  visits  (best  clients)

1999The  Story  of  Bluemercury’s Founding

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My Partner and Inspiration

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“…only  department  stores  and  drug  stores?”

“Books…  Amazon?”

“Shoes…  Zappos?”

A Serial Entrepreneur

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The Old Way

DEPARTMENT  STORE  COSMETICSDRUGSTORE  COSMETICS

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1999: A Competitor Arrives in Georgetown

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Fast Paced Revenue Growth

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

SALE  TO  MACY’S$210  MM  ALL  CASH

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2016

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Our Innovation Model and Source of Competitive Advantage

PEOPLE PLACE

PRODUCT

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Our Secret Weapon = Our People

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Beauty Junkies

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How The Bluemercury Customer Shops

She  is  coming   in  looking   for  a  specific  brand  and/or  a  product  within   that  brand

She  is  looking   for  a  product  with  a  specific  attribute

She  has  a  general  concern

“Do  you  carry  ………?”

“My  skin  is  dry,  what  should  I  do?”

“I  need  new  makeup  colors  for  spring.”

“I  need  a  sunscreen  with  a  high  SPF.” “I  need  a  hairspray  that  

doesn’t  feel  sticky.”

“Do  you  have  an  eye  cream  for  dark  circles?”

Human Googles

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240 235280

548

134

205 232

375

199

359

142

52

#  of  NEW  PRODUCTS  LAUNCHED  IN  2015

Why Is Innovation Important?WINNER TAKES ALL

of  new  products  launched   in  2015   failed

700  -­

600  -­

500  -­

400  -­

300  -­

200  -­

100  -­

0  -­

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1999: Beauty Products Innovators

SHISEIDO

LVMH

L’OREAL

LVMH

ESTÉE  LAUDER

LVMH

DIEGO  DELLA  VALLE

JAMI  HEIDEGGER

MARCIA   KILGORE

MICHAEL  GORDON

LEV  &  ALINA  GLASSMAN

FRANCOIS  NARS

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Product Criteria ANNUITY SKUS

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Product Criteria LOVE IS ALL WE NEED

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Our land & expand strategyWASHINGTON,  DC  METRO  AREA

Flexible Neighborhood Real Estate Model

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So what’s next?

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What’s extraordinary today will be ordinary tomorrow.

The risk of your business being “Uber-ed”

Near-Term Next GenerationTotal Disruptive

Innovation

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Near-Term Innovation

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Big Data Analysis

Next Generation Innovation

Automating Hyperpersonalization & Omnichannel 3.0

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Geo-Tracking and Geo-Targeting

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Total Disruptive Retail Innovation

CONFIDENTIAL 35Source:  Gartner

It’s projected that 25 billion connected things will be in use by the year 2020

(compared to 5 billion in 2015)

SMARTcarSMARThomeSMARTTVSMARTappliancesSMARTskincareSMARTmakeup…WHAT  ELSE?

The Golden Thread to Purchase

TWEET

BLOG    ARTICLE

INSTAGRAM

EMAIL  CLICK

YOUTUBE  VIDEO

STORE  CHECK-­IN

PURCHASE

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Virtual Reality

3D Printing

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Advanced Robotic Delivery Systems

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How will the consumer behave in the future?

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