The beauty counters of department stores continue to lose share to industry leaders Ulta and Sephora, which have established dominance through digital sophistication and consumer-centric in-store experiences. Both Ulta and Sephora also exhibit SEO prowess. They appear on a respective 86% and 92% of beauty terms, far ahead of Nordstrom and Macy’s, according to L2’s Insight Report assessing the paid search strategies of department stores.
As online retail sales continue to increase, department stores must remain visible on beauty terms to compete. Macy’s aggressive paid strategy demonstrates how department stores can use PLA investments to overcome their SEO shortcomings. By bidding on PLAs like “roll on perfume,” Macy’s shows up at the top of the page for multiple terms, ahead of category leaders.
In other categories, this skip-the-line tactic proves far less effective. Zappos, the category leader for search visibility on shoe terms, allocates spend towards 93% of the terms for which it is organically visible. This defensive strategy helps ensure the brand keeps a top position and mitigates the possibility that another brand can buy AdWords or PLAs to appear ahead of Zappos on terms for which Zappos is organically visible. However, Ulta and Sephora both fail to allocate paid spend towards more than 40% of keywords for which the brands are organically visible — giving brands like Macy’s the opportunity to buy AdWords and PLAs, overcome lower organic visibility, and appear above the category leaders.