In a world where many digital-first brands are finally stepping into the store (hi, Billie), one makeup company is trading shelf space for online’s infinite aisles.

Catrice Cosmetics ended its five-year, exclusive retail partnership with Ulta at the end of 2021 to focus solely on DTC and Amazon starting this month. It hopes the extra elbow room will give it a boost—and better connect with shoppers, Jill Krakowski, CMO of its parent company Cosnova’s US subsidiary, Cosnova Inc., told Retail Brew.

• Privately owned German company Cosnova, which also houses affordable beauty brand Essence, launched Catrice in 2004, and it hit the US in 2016. Its products have an average price point of $8.

Why ditch the store?

Catrice “really valued” its partnership with Ulta—a beauty lovers’ mecca—but it presented the brand with some limitations, Krakowski said.

“We’ve always felt like an indie brand at heart, and we wanted to go back to our roots and really focus our efforts on the consumer,” she said. “It was really just too hard to do with the challenges of being at Ulta at the same time.”

The brand wasn’t carried in every Ulta shop (only about 30% of its 1,200+ locations), which left shoppers confused about where to actually find Catrice’s products. In-store space also felt tight, Krakowski said, so difficult decisions had to be made on what to sell through the retailer.

• It was tough for Catrice, whose face products are its bestsellers, to offer a reduced shade range, she noted. Last year, only half of the foundations and concealers in Catrice’s True Skin line made it to US shelves.
• Plus, the schedule of reset periods around January and July made seasonal and limited release items tricky. Shipping from Germany to Ulta meant delays in getting products on shelf (a summer-themed bronzer might not debut until tans have faded in the fall).

DTC ya: When the pandemic hit, Catrice began to see a bump in sales online (the company declined to provide specific figures), a channel it had previously used as a “research tool” for shoppers, Krakowski said. It began mulling the idea of going online only in late 2020 and spent 2021 executing an exit strategy with Ulta to jump ship shop.

“What we learned when the stores were shot was that the best way to build this brand is really to go online and own the channel.”

Click here to read more about how Catrice is doubling down on e-comm with a website makeover.—EC

Let’s be honest: You want to send back that highlighter-yellow sweater you got for Christmas, but don’t want to go through the hassle. Well, you aren’t the only one.

Nearly all shoppers (95%) said a poor returns experience will make them less likely to buy from a brand again, according to the 2022 Omnichannel Returns Index from market research firm Incisiv and Appriss Retail.

More is on the line for retailers now, as shopping continues to shift online. E-comm purchases are returned at least 3x more frequently than in-store buys, explained Giri Agarwal, Incisiv’s chief strategy officer.

Why does it matter? He called out the costs of the Es: environmental (more packaging and transportation), economic (prices passed onto consumers), and emotional (the potential for more poor experiences).

• Still: “Returns aren’t all bad,” Agarwal told Retail Brew. They’re part of the business, but need to be “optimized” to cut down on the ones that should’ve never happened to begin with, he noted.

Show me: Apparel is the segment furthest along when it comes to “returns flexibility,” the report found.

• All 28 companies assessed in the space let orders be returned in stores, and 90% allow replacement or exchanges.

That makes sense to Agarwal, given the high return rates of the category. But he was surprised by “how relatively immature everybody is.”

Agarwal noted that Amazon is really leading the charge on returns, thanks in part to its thousands of free drop-off options. Many companies will be forced to follow in step.

• “They’re going to push traditional retail to begin to match up to that expectation,” he said.—KM

Robotic fulfillment is on the rise. We’ve seen Amazon open up cashier-free shops and Walmart introduce its Alphabot robotic grocery system. Now, we have more proof that our robot overlords want to help us buy things.

Future vision: Yesterday, Chinese e-comm giant JD.com opened two retail locations in the Netherlands that will be outfitted with robots preparing and delivering packages. The company is branding the robotic shops under the moniker Ochama.

• This is JD.com’s first European endeavor. It plans to open two more stores in Amsterdam and Utrecht.
• Product categories range from food to beauty to home goods and furniture.

Customers visiting Ochama stores will be served by automated vehicles, robotic arms, and conveyor belts, or they can order delivery using the Ochama app.

+1: JD.com’s European expansion, plus its emphasis on logistics and e-comm, might provoke some side-eye from Amazon, which rolled out Amazon Fresh in the UK last year, its first cashierless store outside the US.—JG

Today’s top retail reads.

Role call: Fashion brands want in on the metaverse—that means finding the right talent. Job listings noting the buzzword soared 1,042% between November 2020 and November 2021. (Business of Fashion)

Can’t be contained: Why big-box retailers like Walmart and Target are getting into home organization. (Modern Retail)

You’re my thrill: What’s the deal with estate sales? A look at their quirks and inner workings. (The New Yorker)

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What happened in the world of retail this week in…1964 and beyond? Retail Brew takes you way, way, way back.

Get your party hats (or disco looks) ready—there’s a big birthday coming up:

• On January 9, 1990, Ulta Beauty was founded (makeup lovers, rejoice).
• On January 12, 1964, Jeff Bezos was born. What do you get the man who actually has everything?
• On January 13, 2000, Target as we know it came to be. That’s when Dayton Hudson Corp. said it would change its name and hit the bullseye.
• And on January 15, 1983, Estée Lauder co-founder Joseph Lauder died (makeup lovers, remember).

Catch up on the Retail Brew stories you may have missed.

• NRF 2022: What to be on the lookout for
• DTC razor brand Billie partners with Walmart for its first foray into IRL retail
• Mobile apps must now be more than a checkbox for retailers