Beauty Retailing - UK - January 2010
Promotions and special offers resonated with very large numbers of shoppers, equivalent to 22 million adults – 2009 was the year of the ‘deal-conscious shopper’. Retailers have responded to changing consumer needs during the recession by increasing their promotional activity, offering deals like 3 for 2's or buy one get one free or straight discounts.
Own brands are appealing more to shoppers in the current economic climate. Some 9 million consumers have bought more own brand in the last 12 months with retailers anticipating this demand by stepping up own brand development.
Loyalty cards do drive repeat business particularly among women, but should be viewed as part of a wider package of competitive tools. Almost three times as many people prefer deals to loyalty card schemes. While deals deliver instant rewards that may or may not be the case with loyalty cards. But loyalty schemes are popular too, with 15% going out of their way to use them.
Young people seem to be actively managing their budgets, cutting back selectively in order to spend on those ‘special extras’ deemed to be worth it. This treating element may weaken in 2010 as youth unemployment hits harder.
The online channel remains very small in beauty and we don’t expect to see major change there. There are low levels of buying from fragrance/cosmetics/toiletries sites (7% for the period July to October 2009) and limited growth. Nevertheless, we expect to see more niche online specialists emerging in the next five years and with current usage skewed to AB consumers and those aged 35-54 which are the consumers we expect to see most targeted.
Boots remains by far the most popular destination for beauty purchases with over half of all adults choosing this option. The stores are certainly well liked for their wide choice, loyalty points, good deals and knowledgeable staff.
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