Capture consumers and build an emotional bond
A challenging economic environment has created an engaged private label consumer, with 60% of private label BPC buyers wanting to see more options in the smaller stores of larger retailers. Retailers can use this time to build emotional connections to private label BPC through personalised engagement (ie a marketing strategy that tailors efforts to individual consumers) and livestream selling.
Premiumisation is the biggest opportunity, but value is still needed
Premiumisation in BPC is creating opportunities for private label products to undercut in categories where it was once hard to compete, such as deodorants and oral care. Retailers can however still succeed with value ranges, as consumers are concerned about price rises in BPC.
Innovation is needed
Private label brands are doing well in innovation, with retailers such as Aldi and Lidl launching dupe lines, and Boots relaunching its Natural Collection and Botanics ranges with a stronger focus on eco and natural claims. However, private label BPC isn’t keeping up with branded innovation in some areas. For example, private label bodycare could benefit from a heightened focus anti-ageing claims, while more soap, bath and shower with sensitive skin claims could help private label better compete with brands.
This report looks at the following areas:
- Purchase of private label and branded BPC products
- Consumers perception of private label products
- Product categories that could benefit from private label innovation
- Shopping habits among those who buy only private label BPC products, vs those who only buy branded BPC products and those who buy a mixture of branded and private label
- Interest in premium private label innovation
- Strategies to attract branded BPC buyers and how to retain private label BPC buyers
Private label BPC has engaged consumers due to a tough economic environment. Retailers can look to premiumisation and forge emotional connections for sustained loyalty.
Dionne Officer, Research Analyst – BPC Innovation
Market Definitions
This Report focuses on consumer usage and purchasing of beauty products produced by retailers for exclusive sale by them, such as grocery multiples, direct selling outlets, specialist beauty retailers and chemists.
For the purposes of simplicity, the terms ‘private label’ and ‘own-label’ have been used interchangeably. This Report includes the following beauty categories:
Products covered in this report:
- Colour cosmetics
- Fragrances (including body sprays)
- Haircare and styling
- Skincare (including face, body, foot and hand).
- Suncare
- Personal care (including oral, deodorants, and soap, bath and shower)
- Beauty and grooming accessories
The terms ‘own-label only buyer/shopper’ and ‘private label only buyer/shopper’ have been used to describe consumers who buy only private label in at least one beauty/grooming category.
The term ‘mixed buyer/shopper’ has been used to describe consumers who buy both private label and branded products in at least one beauty/grooming category.
The term ‘branded only buyer/shopper’ has been used to describe consumers who buy only branded products in at least one beauty/grooming category.
One consumer may fall into all three categories, as purchase was assessed on a category basis.
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EXECUTIVE SUMMARY
- Opportunities for private label BPC
- Secure long term growth through innovation
- Opportunities exist to explore new BPC categories
- Premiumisation of BPC creates room for private label to undercut
- Market dynamics and outlook
- Market predictions
- What consumers want and why
- Explore dual shopping habits
- Graph 1: purchase of own-label and branded BPC products, 2024
- Boots wins the private label battle…
- Graph 2: retailers where own-label BPC products are purchased, 2024
- …but grocers win the war
- Graph 3: net of retailers where own-label BPC products are purchased, 2024
- Private label and branded buyers are aligned
- Graph 4: most important attributes for BPC products, by type of buyer, 2024
- Interest in cross-category innovation bodes well for private label
- Graph 5: interest in own-label BPC innovation, by category, 2024
- Private label must meet consumers’ high standards
- Graph 6: own-label BPC shopping behaviours, 2024
- Lean into value propositions as price rises cause concern
- Graph 7: attitudes towards own-label BPC, 2024
- Innovation and marketing
- Private label innovation is most pronounced in SBS
- Graph 8: % of private label BPC launches accounted for by each category, 2020-24
- Graph 9: % of BPC launches in each category accounted for by private label BPC products, 2020-24
- Dupes continue to thrive
- There is room for more seasonal launches
- Graph 10: % of private label BPC launches carrying select claims, 2020-24
- Makeup innovation ramps up
- No7 goes premium, while grocers push value
- Retailers bring attention to launches and relaunches
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MARKET DYNAMICS
- Market drivers
- Increasing inequality fuels the need for accessible BPC
- Consumer confidence increases price sensitivity
- Graph 11: the financial confidence index, 2016-24
- Increase in basket spend to temper effects of a stagnant population
- Graph 12: population estimates, 2021 projection, 2004-44
- Prepare for changing population demographics
- Graph 13: predicted change in the age structure of the UK population, 2025-30
- Luxury for less appeals amid dupe culture
- Fragrance dupes appeal
- Unlock growth through emerging sales channels
- Invest in AI to reduce personalisation impact
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WHAT CONSUMERS WANT AND WHY
- Purchase of private label and branded BPC products
- Explore dual shopping habits
- Graph 14: purchase of own-label and branded BPC products, 2024
- Functional categories see high private label purchasing
- Consumers look to private label in functional categories
- Graph 15: purchase of exclusively own-label in select BPC categories, by gender, 2024
- Younger consumers dominate in aesthetic categories…
- Graph 16: purchase of select own-label BPC products, by age, 2024
- …while purchase is more even in functional categories
- Graph 17: purchase of select own-label BPC products, by age, 2024
- Branded products = higher quality
- Graph 18: purchase of exclusively brands in select BPC categories, 2024
- Learn from Zara’s approach to fragrance
- Retailers where private label BPC products are purchased
- Boots wins the private label battle…
- Graph 19: retailers where own-label BPC products are purchased, 2024
- …but grocers win the war
- Graph 20: net of retailers where own-label BPC products are purchased, by gender, 2024
- Discount supermarkets appeal to all ages…
- Graph 21: select retailers where own-label BPC products are purchased, by age, 2024
- …while online-only appeals to younger consumers
- Graph 22: select retailers where own-label BPC products are purchased, by age, 2024
- Graph 23: select retailers where own-label BPC products are purchased, by age, 2024
- Grocery stores are the go-to for many private label buyers
- Social media is driving young consumers to shop around
- Graph 24: repertoire of retailers where own-label BPC are purchased, 2024
- Most important attributes for BPC products
- Private label and branded buyers are aligned
- Graph 25: most important attributes for BPC products, by type of buyer, 2024
- Consumers look for scent, naturalness and reputation
- Create bespoke fragrances to stand out
- Use storytelling to build brand reputation
- Attract branded buyers with natural ingredients
- Focus on creating a cohesive brand image
- Multifunctional products can help consumers simplify their routine
- Graph 26: interest in BPC products with specific ingredients, by gender and age, 2024
- Interest in private label BPC innovation
- Interest in cross-category innovation bodes well for private label
- Graph 27: interest in own-label BPC innovation, by category, 2024
- Focus on functional category innovation
- Space to compete in deodorants
- Innovate with natural and sensitive claims SBS
- Graph 28: soap, bath and shower launches by selected claims, 2024
- Offer affordable luxury through fragrance
- Graph 29: interest in own-label fragrance innovation, by generation, 2024
- Keep up with the skinification of bodycare
- Graph 30: bodycare launches, by top five beauty enhancing claims, 2024
- Spice up oral care with flavours beyond mint
- Opportunities in benefit-driven haircare
- Graph 31: hair product launches, by top five beauty enhancing claims, 2024
- Private label BPC shopping behaviours
- Private label must meet consumers’ high standards
- Graph 32: own-label BPC shopping behaviours, 2024
- First impressions are important for private label brands
- Offer consumers premium quality within reach
- Expectations are high for private label
- Drive impulse buys to boost private label sales
- Graph 33: impulse spending on own-label BPC products, by type of buyer, 2024
- Attract shoppers with budget-friendly gift options
- Connect with consumers on an emotional level to build lasting relationships
- Engage with older consumers via Facebook
- Graph 34: purchase of own-label BPC products after seeing them on social media, by generation, 2024
- Attitudes towards private label BPC
- Lean into value propositions as price rises cause concern
- Graph 35: attitudes towards own-label BPC, 2024
- Lock-in prices to stave off price-paranoia
- Graph 36: agreement that the rising price of BPC products is concerning, by household income, 2024
- Premium is a significant opportunity
- Premiumise to attract branded buyers
- Private label buyers crave innovation
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INNOVATION AND MARKETING
- Launch activity and innovation
- Private label launches see YOY increase
- Graph 37: % of BPC launches accounted for by private label BPC products, 2020-24
- Private label innovation is most pronounced in SBS
- Graph 38: % of private label BPC launches accounted for by each category, 2020-24
- Graph 39: % of BPC launches in each category accounted for by private label BPC products, 2020-24
- Makeup private label innovation ramps up
- Ensure natural is also effective
- Target men with gender specific NPD
- Celebrate more occasions
- Kiko and H&M dominate NPD
- Graph 40: UK private label BPC products, by top 10 ultimate companies and other (based on 2024), 2023-24
- Boots boasted a wide range of new launches…
- …and its relaunches had a eco/natural focus
- Lidl provides premium scents at affordable price points…
- …and Aldi follows suit
- Grocers can ramp up innovation
- Zara shakes up the hair styling segment
- Lush has a battle of the icons…
- …but also gained viral status
- Online retailers have scope to widen reach
- Add a touch of luxury to own label
- Superdrug succeeded in Christmas gifting
- Advertising and marketing activity
- Beauty Pie shows its inclusivity
- Retailers bring attention to launches and relaunches
- A spotlight on supermarket suncare savings
- No7 provides a premium private label experience
- H&B retailers go after gifters
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APPENDIX
- Supplementary data
- Trends in the age structure of the UK population
- CHAID analysis
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Consumer research methodology
- Nielsen Ad Intel coverage
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