Mecca’s Moment

As a long-time beauty writer, I’d been aware of Mecca co-founder and CEO Horgan, widely regarded as a visionary, for ages. From Sephora-beating exclusives and its uniquely experiential, events-driven approach to capturing the attention and wallets of discerning beauty junkies, there’s a lot of buzz around this homegrown retail hero.

Founded by Horgan in Melbourne in 1997, the privately-held retailer is now up to 110 stores across Australia and New Zealand. These stores are currently carved into three separate retail entities: Mecca Cosmetica, its luxury-centric, boutique concept which centers niche offerings such as Augustinus Bader and Diptyque; Mecca Maxima, its trend-forward, Gen Z-friendly format featuring blockbusters like Glossier and Drunk Elephant; and MECCA, its “large store” flagship combining both Cosmetica and Maxima, as well as its Mecca Aesthetica skincare services boutiques.

On the digital front, Mecca’s stunning, editorially driven and info-packed website currently ships only to Australia and New Zealand. In the interest of eliminating the consumer friction of having to visit separate stores to get their luxury and trend-driven beauty fixes, Mecca is moving increasingly toward the MECCA flagship model. Case in point, the massive new flagship (2,400 square meters!) in Chadstone, consolidating three existing stores.

In terms of total brand count, Mecca hovers around 220, which is considerably lower than Sephora’s estimated 500 and Ulta Beauty’s 600-plus. These include several beloved house brands, including the luxe Mecca Cosmetica, the trend-driven Mecca Max, the wellness-driven Kit, and Mecca-essentials, a line of cosmetic tools and bags.

Compared to its competitors, Mecca’s hyper-curation clearly works in its favor with a true “if you know, you know” insider vibe.

And maybe the biggest “if you know, you know” brand of the moment? Hailey Bieber’s Rhode, which e.l.f. cosmetics bought for a cool $1 billion last year. While Sephora was turning cartwheels over its brick and mortar and online Rhode exclusive in the U.S. and Canada, Mecca recently nabbed the exclusive for Australia. Its win over Sephora is further emblematic of its growing clout.

Strategic Exposure

In partnership with Heinemann, Mecca made its duty-free debut at the Sydney Airport in July. And when you think about it, it’s a genius move. The retailer gains access to international travelers without actually having to move out of its home country. Since Mecca currently only ships to ANZ customers, it’s a way to both expose its retail vision and get its ultra-curated product assortment into potentially many more hands.

“It’s a good move for Mecca, building customer awareness as they consider a fuller launch into other countries beyond Australia and New Zealand,” says Kevin Roche, architect, retail strategist and fellow TRR contributor. “The duty-free debut is also a great move for the airport and a path of least resistance for Heinemann, as it relieves them from creating and operating a standalone beauty-category store.”

Monster Flagship Model

The big story is the in-the-works Chadstone monster flagship, following the mega-model of the retailer’s Bourke Street outpost in Melbourne. Comprising three separate floors, it serves up a highly experiential mix of makeup, hair, nail and brow and lash services; an in-house naturopath, clinical skin treatments via Mecca Aesthetica, and a fragrance Scentsorium. In other words, this store is a beauty junkie’s paradise.

“Brands are everywhere, and most nonessential retailers sell stuff no one really needs,” says Roche. “The key to a meaningful retail, hospitality, and entertainment destination is to offer more than the transaction of the core product or service.” Easier said than done. Roche notes, “It takes inspired leadership for a retailer to create, operate, and maintain relevance beyond being a retail outlet and product distributor. When you can strike or discover a unique balance between your branded experience and the brands you sell, you have the potential to create differentiated relevance.”

Three hustling, bustling beauty floors spread out over 2,400 square meters and a packed, infotainment-rich event calendar defines Mecca’s “differentiated relevance.” And the monster flagship model is in play in New Zealand, too; the just-opened Ponsonby outpost in Auckland is triple the size of the original location.

Sephora Fights Back

Of course, there’s no way Sephora is going to idly stand by and allow Mecca to eat its lunch in ANZ. In late August of this year, the LVMH-owned beauty stalwart announced a competitive beauty exclusive in Australia: Merit, the sleek, minimalist makeup brand millennials and Gen X tend to gravitate toward once they’ve outgrown Glossier.

Despite Sephora’s tit for tat approach, Roche isn’t worried about Mecca’s ability to continue to own the beauty experiential-retail zeitgeist in ANZ, and beyond, when and if it chooses to expand into other markets. Roche adds, “Mecca hasn’t tried to copy anyone else; many tried to be a Sephora look-alike in its early expansion days. For longevity, it’s critical for every retailer to find its own way based on its leadership, vision, talent, and resources. Other beauty retailers, as well as most retail categories, should take inspiration and confidence from Mecca to find their own way toward innovation and maintaining relevance.”