Adore Beauty’s next chapter: omnichannel, premiumisation and loyalty in a crowded market

When Adore Beauty announced its FY25 results, it signalled more than just another set of numbers. For one of Australia’s most well-known successful pureplay retailers, these results are a window into how brands are adapting to a more complex retail landscape – one where profitability, omnichannel expansion, premiumisation, and loyalty are inextricably linked.   

Adore Beauty’s journey is fascinating because it sits at the crossroads of digital and physical retail. As one of the few Australian eCommerce players to build a nationally recognised brand before moving into bricks-and-mortar, its strategy is something the broader retail sector is watching closely. 

So, what stood out in the results – and what does it mean for the future of beauty retail in Australia? 

Profitability in an Era of Efficiency 

Despite investing heavily in new initiatives, Adore Beauty strengthened its profitability in FY25. This is no small feat in a market where customer acquisition costs are rising, and where most retailers are battling margin pressure. 

Two factors were central to this shift: 

→ Smarter marketing spend – Adore Beauty has pulled back on above-the-line and digital ad spend as their retail media proposition grows, which allows brands to co-fund campaigns. That means the business is extracting more value from each marketing dollar, while maintaining visibility and growth.  

→ A sharper focus on owned brands – These now account for around 8% of sales. Owned and exclusive lines deliver higher margins and reduce cost of sales, strengthening profitability at a time when topline growth is more muted. 

Revenue growth itself was relatively flat, and while four new stores were opened in the period, topline sales didn’t jump as much as to be expected. That gap underscores a broader challenge: physical retail rollouts take time to shift the dial, particularly when competitors like Mecca and Sephora already have well-established networks. 

Why Omnichannel Matters in Beauty 

Adore Beauty’s move into physical stores has been met with strong customer response – and for good reason. 

While beauty is one of the most digitally penetrated categories, the reality is that most spend still flows through physical stores. Customers want to swatch, sample, and experience beauty products in person before they buy. For a brand that already has national awareness, adding bricks-and-mortar gives customers the best of both worlds: convenience online, and sensory engagement offline. 

But what makes Adore Beauty unique is that it’s one of the first Australian retailers to go from digital-first to physical expansion at scale. That reversal of the traditional retail playbook makes it an experiment worth watching. If they can prove the model, it could change how other online-first players think about growth locally. 

The Push into Luxury: Premiumisation as Strategy 

One of the most notable moves in the FY25 results was the decision to add 60 new brands, including prestige heavyweights like Hermès, Prada Beauty, and Gucci Beauty. 

At first glance, this might look like a surprising shift for a brand that built its reputation on accessibility and inclusivity in beauty. But dig deeper, and the logic is clear. 

Competition at the mass end of the market is intensifying. Pharmacies, supermarkets, discount chemists, and online marketplaces like Amazon are all vying for wallet share. Competing on price alone is a race to the bottom. 

Premiumisation, by contrast, does three things for Adore Beauty: 

1. Differentiates the brand – By offering luxury and exclusive lines, it creates a clear point of difference from pharmacies and mass retailers. 

2. Attracts higher-value customers – Shoppers who buy prestige beauty are typically more engaged, more loyal, and spend more per basket. 

3. Strengthens margins – Luxury products come with higher price points and stronger unit economics, helping counteract rising operating costs. 

In other words, the shift isn’t just about prestige for prestige’s sake. It’s about future-proofing their position in a market where the middle is increasingly squeezed. 

Reinventing Loyalty: From Points to Cashback 

If premiumisation is about attracting new, high-value customers, loyalty is about keeping them. 

In FY25, Adore Beauty relaunched its loyalty program with a spend-and-earn cashback model. Instead of abstract points, members now earn cash-equivalent rewards (vouchers) that can be directly redeemed on future purchases. 

This is particularly compelling in today’s value-driven climate. Consumers are more discerning, budgets are tighter, and shoppers want rewards that feel tangible and immediate. Cashback models or cash-based rewards that can be redeemed for dollars off deliver exactly that – clarity, transparency, and utility. 

With an 8% give-back rate, Adore Beauty’s scheme is especially generous. It not only drives repeat purchases but also encourages larger basket sizes, as shoppers know they’re getting something back with every transaction. 

Of course, the question is sustainability. As the program scales and more revenue flows through member transactions, balancing customer appeal with long-term profitability will be critical. But the strategy may prove valuable, as Adobe Beauty starts well behind Mecca, its competition, in loyalty members, a highly compelling reward rate might just be what the doctor ordered to drive acquisition of the member base, and over time those generous rewards might be peeled slightly back.  

Building Retention and Share of Wallet 

When you step back, these big moves – omnichannel expansion, premiumisation, and a retooled loyalty program – all ladder up to one central goal: retention and share of wallet. 

→ Stores give Adore Beauty new touchpoints with customers, increasing brand visibility and accessibility. 

→ Luxury brands drive higher spend per customer and deepen emotional engagement. 

→ Cashback loyalty builds stickiness and rewards frequency. 

Together, these levers create a more defensible position in a crowded market, where customer acquisition costs continue to climb, and long-term growth hinges on retaining existing customers rather than constantly chasing new ones. 

The Road Ahead: Growth with Differentiation

So, is Adore Beauty well-positioned to continue on its current growth trajectory? 

The short answer: it has the right building blocks, but execution will be everything. 

Competition remains fierce. Mecca, for example, has close to 3 million members in its Beauty Loop program, which remains one of the most compelling loyalty schemes in the country. Sephora, department stores, and global marketplaces are all continuing to innovate. 

For Adore Beauty, success will depend on how well it can carve out a truly differentiated proposition: 

• Can it scale its retail media arm while ensuring strong ROI for brands? 

• Can its loyalty program evolve to remain generous yet sustainable? 

• Can physical retail grow fast enough to shift revenue meaningfully, without diluting the digital strengths that built the brand? 

• And is its owned brand strategy, combined with more premium brands, the winning formula to compel customers to choose Adore over its rivals?

If it can answer those questions while staying true to its customer base, Adore Beauty has a clear runway for growth. But the battle for beauty retail in Australia is far from settled. 

What Other Retailers Can Learn 

Adore Beauty’s story isn’t just relevant to the beauty category – it offers lessons for any retailer navigating today’s environment: 

• Investing for growth and ensuring efficiency are both key. Many retailers are making the mistake of driving efficiency without a longer-term investment approach – and you unfortunately can’t cut your way to growth.  

• Omnichannel is no longer optional. Even digitally native brands benefit from physical touchpoints in categories where sensory experience matters. Know the role and value that each channel plays. 

• Premiumisation is a path out of the price war. Differentiating through exclusivity and luxury helps protect margin and attract high-value customers, but be careful not to alienate the everyday shopper if the scale of network and online reach are paramount for success. 

• Loyalty must evolve with consumer expectations. Cashback and tangible rewards resonate more strongly than abstract points in today’s value-conscious market. 

• Defensibility lies in integration. The interplay between channels, loyalty, and product mix is where retailers can build true stickiness. 

Final Thoughts 

Adore Beauty’s FY25 results tell the story of a retailer in transition: from pureplay digital to true omnichannel, from mass accessibility to premiumisation, from abstract loyalty to tangible rewards. 

It’s a playbook designed for long-term relevance in a crowded, competitive space. But whether the brand can sustain momentum will depend on how well it balances growth with profitability, and innovation with execution. 

One thing’s certain: its next chapter will be watched closely by retailers across categories – because in many ways, their experiment is also a blueprint for the future of omnichannel retail in Australia. 

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