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- Beauty Retailing - UK - January 2012
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“Gaining a competitive edge through the wealth of customer data derived from a loyalty scheme is easier said than done. Moreover retailers must then deliver relevant and useful incentives to shoppers if they are to succeed in generating those all-important repeat purchases. Getting it right procures good value from the marketing budget but getting it wrong is a wasted investment”.
– Hilary Monk, Senior Retail Analyst
Some questions answered in this report include:
Which factors most influence purchasing decisions?
Can Superdrug take on Boots with its loyalty card?
And what does the future hold for loyalty schemes?
How can retailers retain the interest of young people?
The enduring challenge – how can retailers get more men into the grooming market?
Introduction
Beauty and personal care retailing
Beauty specialists
Sources
Abbreviations
Technical notes
Financial definitions
Currencies
Country codes
Figure 1: Country codes
VAT
Figure 2: Europe: Standard VAT rates, 2010/11
Executive Summary
The market
Figure 3: All spending on beauty and personal care products, 2006-16
Economic outlook
The notion of treating will become a harder sell
Winners and losers
Market factors
Competition heats up
Multi-channel steams ahead
M-commerce will gather momentum
Maximising the impact of marketing campaigns
Companies, brands and innovation
Figure 4: Leading retailers: Market shares of all beauty and personal care spending, 2010
Figure 5: Leading specialists: Share of cosmetic & toiletries specialists’ sales, 2010
Innovation – loyalty, digital and collaborative developments
Channels of distribution
Figure 6: Beauty and personal care spending: Channels of distribution, 2009 and 2010
The consumer
Figure 7: Purchase drivers for beauty products, November 2011
Figure 8: Attitudes to beauty shopping, November 2011
Figure 9: Beauty target groups, November 2011
What we think
Issues in the Market
Which factors most influence purchasing decisions?
Can Superdrug take on Boots with its loyalty card?
And what does the future hold for loyalty schemes?
How can retailers retain the interest of young people?
The enduring challenge – how can retailers get more men into the grooming market?
Future Opportunities
Let’s Make a Deal
Why buy?
Who’s Innovating?
Sephora’s mirror app
Superdrug loyalty roadshow
Do not disturb
Figure 10: Clinique’s ‘browsing bracelets’
Harrods Beauty Apothecary and Colour Hall
Taking in-store services further
Figure 11: John Lewis Retreat, Reading
Cadbury’s Blissful treats
Sephora unveils its mobile checkout system
Sensory experiences from Sephora
Figure 12: Sephora’s Sensorium, New York
The Market: Economic and Demographic Background
Key points
Demographic shifts
Ethnic diversity
Figure 13: Number of passengers given leave to enter the UK for work and study by region of nationality, and grants of settlement by region of nationality, 2010
Figure 14: Population estimate, by ethnic group, 2009
Ageing population
Figure 15: UK: Over-65s as a percentage of the total UK population, 1991-2020
Implications for retailers
The economy
Figure 16: UK: Real-terms, year-on-year GDP growth, Q1 2009-Q3 2011(p)
Figure 17: UK: consumer confidence and retail trade confidence, Dec 2010-Nov 2011
Inflation
Figure 18: Consumer prices inflation in selected categories, Dec 2010-Nov 2011
Implications for retailers
The Market: Consumer Spending on Beauty Products
Definitions
Consumer spending breakdown
Figure 19: UK: Consumer spending on selected categories, 2006-11
Beauty spending as a share of all spending
Figure 20: Consumer spending on personal care goods as a percentage of total consumer spending, 2006-11
Spending on goods relative to services
Figure 21: Consumer spending on personal care goods relative to spending at hairdressing salons & personal grooming establishments, 2006-11
Category performance and prospects
The Market: Sector Size and Forecast
Key points
Economic and consumer outlook
Health warning
Economic outlook
Beauty retailers’ prospects
Winners and losers
New investment
Online developing fast
M-commerce will gather momentum too
Maximising the impact of marketing campaigns
Collaborative links
Market size forecast
Figure 22: Personal care spending forecast, 2006-16
Forecast methodology
Sector sales
Figure 23: UK: Estimated total health and beauty retailers’ sales, 2006-10
Outlet data
Figure 24: UK: Retail outlets by sector, 2005-09
The Market: Strengths and Weaknesses
Strengths
Weaknesses
The Retailers: Channels of Distribution
Key points
Figure 25: UK beauty and personal care market, channels of distribution, 2009 and 2010
The Retailers: Leading Retailers
Key points
Technical note
The retailers: Leading beauty specialists
Mixed results
Superdrug initiatives should start to bear fruit
What lies ahead for Savers and The Perfume Shop?
The Body Shop in need of fresh ideas
Niche players hold up well
Figure 26: UK: Leading beauty specialists, 2010/11
The retailers: Leading non-specialists and non-store retailers
Figure 27: Leading non-specialists, 2010/11
Non-specialist and non-store retailers’ profiles
Tesco
Figure 28: Tesco: Beauty consumer profile (relative to the average), by gender, age and socio-economic group, November 2011
J. Sainsbury
Figure 29: J. Sainsbury exclusive brands, Mandara Spa and Dirty Works, and point-of-sale merchandising
Figure 30: Sainsbury’s: Beauty consumer profile (relative to the average), by gender, age and socio-economic group, November 2011
Asda
Figure 31: Asda: Beauty consumer profile (relative to the average), by gender, age and socio-economic group, November 2011
Morrisons
Figure 32: Morrisons: Beauty consumer profile (relative to the average), by gender, age and socio-economic group, November 2011
Debenhams
Figure 33: Bliss spa, Debenhams, Oxford Street
Figure 34: Debenhams: Beauty consumer profile (relative to the average), by gender, age and socio-economic group, November 2011
John Lewis
House of Fraser
Marks & Spencer
Figure 35: Beauty section, Marks & Spencer, Marble Arch
Figure 36: Marks & Spencer: Beauty consumer profile (relative to the average), by gender, age and socio-economic group, November 2011
Avon Cosmetics
The Retailers: Market Shares
Figure 37: Leading retailers of personal care products’ shares of consumer spending on personal care goods, 2010
Figure 38: Leading cosmetics and toiletries specialists’ shares of the cosmetics/toiletries specialists sector, 2010
The Retailers: Online
Key points
Prospects for beauty online
Market size
Figure 39: Estimated market size and forecast of online consumer spending on cosmetics and toiletries, 2006-11
Figure 40: Estimated distribution of online consumer spending on cosmetics and toiletries, by segment, 2010
Leading pureplay retailers
Figure 41: Leading home shopping retailers’ online beauty and toiletries sales, 2010/11
Website usage
Figure 42: Leading cosmetics/fragrance retail websites, three-month average to October 2011
Figure 43: Leading healthcare retail websites, three-month average to October 2011
The online consumer
Figure 44: Proportion of adult population buying toiletries/cosmetics/fragrances online in the preceding three months, July 2010-July 2011
Figure 45: Proportion of adult population buying toiletries/cosmetics/fragrances online in the preceding three months, by socio-economic group, age and gender, July 2011
The Consumer: Brand Research
Brand map
Figure 46: Attitudes towards and usage of brands in the beauty retail sector, November 2011
Correspondence analysis
Brand attitudes
Figure 47: Attitudes by beauty retail brand, November 2011
Brand personality
Figure 48: Beauty retail brand personality – macro image, November 2011
Figure 49: Beauty retail brand personality – micro image, November 2011
Brand experience
Figure 50: Beauty retail brand usage, November 2011
Figure 51: Satisfaction with various beauty retail brands, November 2011
Figure 52: Consideration of beauty retail brands, November 2011
Figure 53: Consumer perceptions of current beauty retail brand performance, November 2011
Figure 54: Beauty retail brand recommendation – Net Promoter Score, November 2011
Brand index
Figure 55: Beauty retail brand index, November 2011
Figure 56: Beauty retail brand index vs. recommendation, November 2011
Target group analysis
Figure 57: Target groups, November 2011
Figure 58: Beauty retail brand usage, by target groups, November 2011
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
The Consumer – Who Shops Where for Beauty Products
Key points
Figure 59: Where they bought beauty products in the last 12 months, November 2011
Shopper numbers fall in 2011
Figure 60: Where they bought beauty products in the last 12 months, November 2009, 2010 and 2011
Figure 61: Trends in those spending extra money on fragrances/toiletries/make-up and beauty treatments/haircuts, January-October 2011
Boots maintains its lead
Superdrug targets younger beauty shoppers
Tesco cranks up its beauty proposition
Other supermarkets…
… and department stores
The internet
Retailer market positioning
Figure 62: UK: Market positioning of leading retailers/channels, November 2011
Repertoire – the young and the affluent are more promiscuous
Figure 63: Repertoire of where they bought beauty products in the last 12 months, by demographics, November 2011
The Consumer – What Drives Beauty Purchasing
Key points
What drove choice in 2011
Figure 64: Purchase drivers for beauty products, November 2011
Location, location
The dichotomy of quality and low prices
Choice drivers by age and affluence
Deals, loyalty cards and own brands more important to women
Figure 65: Select purchase drivers for beauty, by gender, November 2011
Pre-/no family choices driven first and foremost by quality
Figure 66: Select purchase drivers for beauty, by pre-/no family lifestage, November 2011
Low prices are key for families
Figure 67: Select purchase drivers for beauty, by family lifestage, November 2011
Third age choices driven by deals and promotions
Figure 68: Select purchase drivers for beauty, by third age lifestage, November 2011
Variety stores and supermarket shoppers most sensitive to price
Figure 69: Those driven by low prices, by where they shop, November 2011
Specialist beauty store shoppers most driven by quality
Figure 70: Those driven by good quality, by where they shop, November 2011
The power of the internet for personal recommendations
Figure 71: Those driven by personal recommendation, by where they shop, November 2011
The Consumer – Attitudes towards Beauty Shopping
Key points
Figure 72: Attitudes to beauty shopping, November 2011
The gender divide
Figure 73: Attitudes to beauty shopping, by gender, November 2011
The Consumer – Target Groups
Figure 74: Beauty target groups, November 2011
Figure 75: Attitudes towards beauty purchasing, by target groups, November 2011
Group 1: The Loyalists (24%)
Who are The Loyalists?
Group 2: The Canny Treaters (11%)
Who are The Canny Treaters?
Group 3: The Enthusiasts (9%)
Who are The Enthusiasts?
Group 4: The Indifferent (56%)
Who are The Indifferent?
Where people shop by typology
Figure 76: Where they bought beauty products in the last 12 months, by target groups, November 2011
Boots UK
Figure 77: Boots UK beauty and toiletries sales: as share of all UK spending on beauty and personal care, 2006-10
Strategic evaluation
Background
Company performance
But continues to gain market share in beauty/toiletries
Figure 78: Alliance Boots UK Health and Beauty Division: Financial performance, 2006/07-2010/11
Figure 79: Boots UK: Outlet data, 2006/07-2010/11
Store formats
Consumer profile
Figure 80: Boots shoppers in last 12 months, by gender, age and socio-economic group, November 2011
Figure 81: Boots shoppers in last 12 months, by region and ACORN group, November 2011
Retail offering
e-commerce
Figure 82: Boots: Online consumer demographics, three month average to October 2011
A.S. Watson (UK)
Figure 83: A. S. Watson (UK): Sales as share of beauty and cosmetics specialists’ sales in UK, 2006-10
Strategic evaluation
Investment in own-brand and exclusive products
Figure 84: Superdrug: Optimum products, and brand-similar products, launched 2011
Figure 85: Reformatted Superdrug stores at Manchester (with brand ambassador Joanna Page) and Uxbridge
The Perfume Shop
Savers
Background
Company performance
Figure 86: A. S. Watson UK: Financial performance, 2006-10
Figure 87: A. S. Watson UK: Outlet data, 2006-10
Consumer profile
Superdrug
Figure 88: Superdrug shoppers in last 12 months, by gender, age and socio-economic group, November 2011
Figure 89: Superdrug shoppers in last 12 months, by region, November 2011
Figure 90: Superdrug shoppers in last 12 months, by ACORN group, November 2011
Retail offering
e-commerce and home shopping
Figure 91: A.S. Watson: Online consumer demographics for Superdrug.com, three month average to October 2011
Figure 92: A.S. Watson: Online consumer demographics for ThePerfumeShop.com, three month average to October 2011
Lush Retail Ltd
Figure 93: Lush Retail Ltd: Sales as share of beauty and cosmetics specialists’ sales in UK, 2006-09
Strategic evaluation
Background
Company performance
Figure 94: Lush Retail Ltd: Group financial performance, 2005/06-2009/10
Figure 95: Lush Retail Ltd: Outlet data, 2006-10
Store formats
Retail offering
e-commerce
Figure 96: Lush: Online consumer demographics, three month average to October 2011
Space NK Ltd
Figure 97: Space NK Ltd: Sales as share of beauty and cosmetics specialists’ sales in UK, 2006-10
Strategic evaluation
Background
Company performance
Figure 98: Space NK Ltd: Group financial performance, 2006/07-2010/11
Figure 99: Space NK Ltd: Outlet data, 2006/07-2010/11
Store format
Retail offering
e-commerce
Figure 100: Space NK: Online consumer demographics, three month average to October 2011
The Body Shop
Figure 101: The Body Shop UK: Estimated sales as share of UK cosmetics and toiletries specialists’ sales, 2006-10
Strategic evaluation
Background
Company performance
Figure 102: The Body Shop: Financial performance, 2006-10
Figure 103: The Body Shop: Estimated UK and RoI sales performance 2006-10
Figure 104: The Body Shop: Outlet data, 2006-10
Store formats
Consumer profile
Figure 105: The Body Shop shoppers in last 12 months, by gender, age and socio-economic group, November 2011
Figure 106: The Body Shop shoppers in last 12 months, by region and ACORN group, November 2011
Retail offering
e-commerce and home shopping
Figure 107: The Body Shop: Online consumer demographics, three month average to October 2011
Appendix – The Market
Population
Figure 108: Europe: Population, by age group, 2005
Figure 109: Europe: Population, by age group, 2010
Figure 110: Europe: Population, by age group, 2015
Figure 111: Europe: Population, by age group, 2020
GDP
Figure 112: Europe: GDP (current prices), 2010
Figure 113: Europe: GDP growth rates (current prices), 2001-Q3 2011
Figure 114: Europe: GDP growth rates (constant prices), 2001-Q3 2011
Consumer spending
Figure 115: Europe: Households’ consumer spending (current prices), 2010
Figure 116: Europe: Households’ consumer spending growth rates (current prices), 2001-Q3 2011
Figure 117: Europe: Households’ consumer spending growth rates (constant prices), 2001-Q3 2011
Consumer prices
Figure 118: Europe: Harmonised index of consumer prices, 2001-10
Unemployment
Figure 119: Europe: Average rate of unemployment, 2001-10
Interest rates
Figure 120: Europe: Interest rates, 2005-Q4 2011
Consumer confidence
Figure 121: Europe: Consumer confidence, Jan 2011-Dec 2011
Appendix – The Consumer – Brand Research
Figure 122: Brand usage, November 2011
Figure 123: Brand commitment, November 2011
Figure 124: Brand momentum, November 2011
Figure 125: Brand diversity, November 2011
Figure 126: Brand satisfaction, November 2011
Figure 127: Brand recommendation, November 2011
Figure 128: Brand attitude, November 2011
Figure 129: Brand image – macro image, November 2011
Figure 130: Brand image – micro image, November 2011
Figure 131: Profile of target groups, by demographics, November 2011
Figure 132: Psychographic segmentation, by target groups, November 2011
Figure 133: Brand usage, by target group, November 2011
Brand index
Figure 134: Brand index, November 2011
Appendix – The Consumer – Who Shops Where for Beauty Products
Figure 135: Most popular where they bought beauty products in the last 12 months, by demographics, November 2011
Figure 136: Next most popular where they bought beauty products in the last 12 months, by demographics, November 2011
Figure 137: Other where they bought beauty products in the last 12 months, by demographics, November 2011
Figure 138: Repertoire of where they bought beauty products in the last 12 months, by demographics, November 2011
Appendix – The Consumer – What Drives Beauty Purchasing
Figure 139: Most popular important factors in the purchasing decision, by demographics, November 2011
Figure 140: Next most popular important factors in the purchasing decision, by demographics, November 2011
Appendix – The Consumer – Attitudes towards Beauty Purchasing
Figure 141: Most popular attitudes towards beauty purchasing, by demographics, November 2011
Figure 142: Next most popular attitudes towards beauty purchasing, by demographics, November 2011
Appendix – The Consumer – Target Groups
Figure 143: Target groups, by demographics, November 2011
- A. S. Watson (Europe)
- Abercrombie & Fitch Co
- Alliance Boots UK Retail
- Amazon.co.uk
- Apple Retail UK
- Asda Group Ltd
- ASOS UK
- Aveda
- Avon Cosmetics Ltd
- Bank of England
- Bebo Inc
- Bhs Plc
- British Broadcasting Corporation (BBC)
- Cadbury Trebor Bassett
- Carrefour Europe
- Champneys Health Resorts
- Chanel Ltd (UK)
- Christian Dior
- Clarins UK Ltd
- Clinique Laboratories Ltd (UK)
- Co-operative Group
- Coop Schweiz
- Coty Inc
- D&A Eyewear Ltd
- Debenhams Total
- Dermalogica
- Donna Karan International Inc.
- Elemis Ltd.
- Elizabeth Arden, Inc.
- Estée Lauder Companies Inc. (The)
- Eve Lom Limited
- Facebook, Inc.
- Feelunique.com
- FriendsReunited
- Google UK
- Groupon, Inc.
- Harrods Group Total
- Harvey Nichols UK
- Häagen-Dazs
- HBOS plc (Halifax Bank of Scotland)
- Healthspan
- House of Fraser Plc
- Hutchison Whampoa (retail)
- J Sainsbury
- Jamie Oliver
- John Lewis Partnership
- Kelkoo S.A.
- Kellogg Company of GB Limited
- Kruidvat (Benelux)
- L'Occitane Ltd
- L'Oréal (UK)
- L'Oréal SA
- Lancôme
- Liberty Retail PLC
- Liz Earle
- London Stock Exchange plc
- Lush Retail Ltd
- Marionnaud Portugal
- Marks & Spencer
- Maximuscle Ltd
- McCann Erickson
- Molton Brown
- MySpace.com
- Neal's Yard Agency
- Ocado
- Office for National Statistics
- Origins Natural Resources, Inc.
- Poundland Ltd
- Prada (I Pellettieri d'Italia S.p.A.)
- Procter & Gamble UK & Ireland
- QVC
- Regis Europe Ltd
- Savers Health & Beauty Plc
- Schlecker
- Selfridges Retail Ltd
- Sephora
- Shiseido International
- Space NK Ltd
- Superdrug Stores Plc
- Ted Baker
- Tesco Plc
- The Body Shop
- The Fragrance Shop
- The Perfume Shop Ltd
- Toni & Guy
- Twitter, Inc.
- Waitrose Ltd
- Wilkinson Hardware Stores Ltd
- Wm Morrison Supermarkets
- YouTube, Inc.
- Yves Saint Laurent
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