On the heels of opening its first brick and mortar outpost—a 140-square foot store-within-a-store in Macy’s in Flushing, Queens—Peach & Lily founder, Alicia Yoon, talks to Beauty Insider about differentiation and plans for the future. Alicia, who introduced her e-tailing site dedicated to Korean beauty in January 2013, saw the store as a natural extension to her concept, which is fitting in well with the Macy’s assortment. According to Muriel Gonzalez, Macy’s Executive Vice President, GMM for Cosmetics, Fragrances and Shoes, “Peach & Lily is a unique addition and concept to our assortment of beauty brands. We have been testing new concepts and expanding our brand offerings with products and services that are relevant to the customer, including the addition of luxury and prestige brands. Consumer demand and demographics in that location tells us that beauty, including a wide assortment of Asian beauty brands, is very important to that customer, and with an in-store destination for an online retailer such as Peach & Lily, we are able to service our customer however and wherever she shops.” Here, a Q&A with Alicia on how she thinks skin care should be merchandised, Korean skin care innovation and her firm’s unique business model.


Beauty Insider: Can you tell us what inspired the collaboration with Macy’s?


Alicia Yoon: How it happened was really organic. I spoke at a WWD Beauty Summit and was soon connected to Macy’s. Before I knew it I was in a meeting with a Macy’s executive and by the end of the conversation we both realized Peach & Lily should be in Macy’s. I’m not a very New Age person but it was one of those things that came very serendipitously.


BI: Can you tell us more about why you wanted a brick and mortar element to your business?


AY: I have always wanted to do a store because I think with skin care there’s a richness from being able to interact with your customers offline. When I thought about doing an offline environment I thought we could do our own brick and mortar, but trying to build a distribution model with a wide footprint is challenging. I thought the first step is to partner with a channel that has great reach, and department stores were first that came to mind. I love that Macy’s is the biggest, with more than 800 locations, plus it’s very data driven and analytic.

BI: Can you explain a bit about skin care innovation in Korea?

AY: In Korea it is really challenging to keep up with the innovation unless you have made that your complete core competency because the rate of innovation there is dizzying, and new brands are coming up like weeds. You have to really look under the covers and have a network of people to cross-reference. That legwork is one of the first things we developed; rigorous product hunting on the ground.

BI: What are you looking for when you stock a new product?

AY: First, we need to make sure companies are committed to quality and have thoughtful formulations. I meet with every brand individually to get a sense of company culture, values, skill sets. We are a very data-driven company, and now have enough information and enough time to have early indicators to see if this innovation is ever going to take off. lf yes, we decide on how we market it. Some brands only take off if done well though social media, some through editorial some through videos, some offline (especially if the price tag is high), people only will purchase after someone walks them through.

BI: An interesting part of your business model is that you also act as a distributor to various retailers. Can you explain how that works? Does this cannibalize your business at all?


AY: We distribute to retailers such as Sephora, QVC, Space NK, Urban Outfitters, Anthropologie, Target and specialty boutiques. We are very thoughtful about how we partner with them and are focused on picking the right things for their customer. All of our partners are well aware when they work with us that we are not only distributors, but also retailers, so from the beginning we’re forthcoming about who we are.

BI: Can you give us an example of one product you’ve found in Korea that resonated here?
AY: One example is Mizon Snail Cream. I picked one up in Korea (a best seller on Korea’s biggest e-tailer) and sought out the company. I went on QVC, which doesn’t typically entice the most adventurous consumer, but it did incredibly well. For a Korean brand to succeed, it has to be something people easily understand. Like [in the case of] the snail cream, the texture is tacky and lightweight, so a customer can see how it helps with firming. Beauty is a very sensorial business.


BI: Let us in on the secret: What’s the magic behind Korean skin care?


AY: What Korean brands do really well is they give hints on what a product will do. For example, there are memory powders that bounce when you press them, showing that they focus on elasticity. What makes Korean brands so special is they get both right; the science and efficacy but also all the bells and whistles; the scent, texture, brand identity, packaging, application, price point. But consumers are smart. If the product offers an amazing experience but doesn’t work, it won’t sell.

BI: Can you tell us your overarching philosophy for the store?


AY: First of all I don’t think skin care should be retailed by brand, I think it has to be in a category format, showing need and benefit, and that’s how it is in the Peach & Lily display. The biggest difference between Korea and the U.S. is that in Korea people are super savvy about skin care, but in the US customers are very overwhelmed and not as knowledgeable. We are going to provide more education (via a highly-trained sales team) to the consumer.

BI: Any common threads between women in the US and in Korea?

AY: Basically women have the same concerns: fine lines, firming, redness, pores. [The] beauty [industry] is providing hope and solutions in a bottle, it’s about the consumer being convinced a certain product will really help her.

BI: Can you tell us about your expansion plan? Are there more Macy’s stores in your future?


AY: We’re definitely exploring the potential to expand. We are serious about being a major skin care retailer, and we will do some color as well, but my hope and dream ultimately is that Peach & Lily is a serious destination among the top beauty players.

BI: What about a Peach & Lily standalone store?
AY: I can’t comment on that at this point, but with Macy’s we are currently exploring the potential to grow.