Table of Contents
Executive Summary
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- The market
- Beauty market dips 0.1% in 2015
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- Figure 1: Market size and forecast: spending on beauty and personal care products (including VAT), 2010-2020
- Health and beauty specialists deliver growth in 2015
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- Figure 2: Health and beauty specialists’ sales (including VAT), 2010-20
- Discount shopping impacts value sales
- Better prospects for prestige brands
- Companies, brands and innovations
- Boots and Superdrug mature businesses
- Beauty specialists account for 36% of the market
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- Figure 3: Estimated distribution of spending on beauty and personal care products, 2015
- Fashion retailers branch out into beauty
- Delivering new experiences
- Online accounts for 10% of BPC spending
- The consumer
- Skincare is the most purchased category
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- Figure 4: Types of product bought either in-store or online, October 2015
- Discount stores are the winners
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- Figure 5: Where they bought beauty products, in-store and online, November 2014 and October 2015
- Young women are most fickle
- Competitive prices are the key driver
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- Figure 6: Key factors in deciding where to shop for beauty products in the last 12 months, October 2015
- Discount shoppers rate their prices and own label
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- Figure 7: Reasons for using discount stores in the last 12 months, October 2015
- Word-of-mouth recommendation more important for prestige than discount shoppers
- Smartphones used for research
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- Figure 8: How beauty buyers have used a smartphone to research and shop for beauty products in the last 12 months, October 2015
- Under-45s men most important prestige buyers
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- Figure 9: Reasons people bought prestige brands in the last 12 months, October 2015
- What we think
Issues and Insights
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- Where next for the value retailers and supermarkets?
- The facts
- The implications
- What are the prospects for the premium end of the market
- The facts
- The implications
- How are smartphones being used for beauty purchases and what are the opportunities for driving engagement?
- The facts
- The implications
The Market – What You Need to Know
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- Beauty market dips 0.1% in 2015
- Specialists sector grows 3.2%
- Discount shopping impacts value sales
- Better prospects for prestige brands
- Growing interest in men’s grooming
- Aging population presents an opportunity
Market Drivers
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- Aging population presents an opportunity
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- Figure 10: Trends in the age structure of the UK population, by gender, 2010-20
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- Figure 11: Trends in the age structure of the UK population, by gender, 2015-20
- Women most concerned with wrinkles
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- Figure 12: Women’s facial skin type, March 2015
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- Figure 13: Men’s facial skin type, March 2015
- Men show growing interest in health and beauty
- Consumers spend their extra money on beauty categories
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- Figure 14: Trends in what extra money is spent on – beauty categories, January 2014 – October 2015
- Better prospects for prestige brands
- Savvy shopping habits
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- Figure 15: Savvy shopping habits in total and BPC markets, August 2015
- Growth of the discounters
- Loyalty card usage
- Smartphone ownership
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- Figure 16: Personal ownership of consumer technology products, by demographics, June 2015
Market Size and Forecast
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- Discounters and promotional activity impact growth in 2015
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- Figure 17: Market size and forecast: consumer spending on all beauty and personal care products (including VAT), 2010-20
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- Figure 18: Market size and forecast: consumer spending on all beauty and personal care products (including VAT), at current and constant prices, 2010-20
- Segment forecast: beauty products
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- Figure 19: Consumer spending on beauty products, 2010-20
- Figure 20: Consumer spending on beauty products, 2010-20
- Category performance in beauty
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- Figure 21: Consumer spending on beauty products, by category, 2014 and 2015
- Colour cosmetics
- Fragrances
- Facial skincare
- Body, hand and foot care
- Segment forecast: other personal care products
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- Figure 22: Consumer spending on personal care products, 2010-20
- Figure 23: Consumer spending on personal care products, 2010-20
- Consumer spending on personal care items
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- Figure 24: Total consumer spending on personal care items (including VAT), 2010-14
- Forecast methodology
Sector Size and Forecast
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- Health and beauty specialists’ sales
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- Figure 25: Health and beauty specialists’ sales (including VAT), 2010-20
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- Figure 26: Health and beauty specialists’ sales (including VAT), at current and constant prices, 2010-20
- Annual growth in beauty specialists sales vs annual growth in BPC spend
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- Figure 27: Annual growth in specialists’ sector sales and annual growth in spending on beauty and personal care products, 2016-20 (fore)
- Notes on the sector size
- Outlet and enterprise numbers
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- Figure 28: Health and beauty specialists: outlet numbers, 2010-15
- Figure 29: Health and beauty specialists: enterprise numbers, 2010-15
Key Players – What You Need To Know
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- Boots and Superdrug mature businesses
- Value retailers excel
- Niche specialists outperform too
- Supermarkets suffer
- Delivering new experiences
- Online beauty spending
Market Shares
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- A fragmented market
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- Figure 30: Leading specialist and non-specialist retailers: estimated market shares, 2014
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- Figure 31: Leading specialist and non-specialist retailers: market shares, 2012-14
- Note on market shares
Leading Specialist Retailers: Financials and Outlets
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- Boots and Superdrug mature businesses
- Boots could do with more in-store experiences
- Superdrug unveils new concepts
- Price-led specialists do well
- Niche players excel too
- Top specialists by sales
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- Figure 32: Leading specialist retailers: net revenues, 2010-14
- Figure 33: Leading pharmacy chains’ net revenues, 2010-14
- Outlet numbers and sales per outlet
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- Figure 34: Leading specialist retailers: store numbers, 2010-14
- Figure 35: Leading specialist retailers: annual sales per outlet, 2010-14
- Operating profits and margins
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- Figure 36: Leading specialist retailers: operating profits, 2010-14
- Figure 37: Leading specialist retailers: operating margins, 2010-14
- Sales area and sales densities
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- Figure 38: Selected leading specialist retailers: estimated total sales area, 2010-14
- Figure 39: Selected leading specialist retailers: estimated annual sales per sq m, 2010-14
Leading Non-Specialist Retailers
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- Aldi and Lidl outpace the market
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- Figure 40: Leading non-specialist retailers: estimated sales growth by segment, 2014
- Leading non-specialists: Estimated beauty revenues
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- Figure 41: Leading non-specialist retailers: estimated beauty and personal care goods sales (excluding VAT), 2012-14
- The supermarkets
- The discounters
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- Figure 42: Leading discounters: Health and beauty space allocation estimates, August 2015
- The department stores
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- Figure 43: John Lewis Liverpool: the retailer’s first Charlotte Tilbury concession
Space Allocation Summary
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- Summary allocation overview
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- Figure 44: Leading health and beauty retailers: Health and beauty products space allocation, December 2015
- Detailed space allocation
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- Figure 45: Leading health and beauty retailers: Estimated health and beauty products space allocation, December 2015
- Figure 46: Leading health and beauty retailers: Estimated health and beauty products space allocation, December 2015
- Beauty versus non health and beauty-related in-store space
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- Figure 47: Department store, supermarket and discount store: Estimated percentage of total in-store space dedicated to health and beauty category, December 2015
Online
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- Online spending accounts for 10% of the market
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- Figure 48: Estimated online consumer spending on BPC products, 2010-16
- Supermarkets most commonly used BPC online retailer
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- Figure 49: Retailer shares of online sales of BPC products, 2013-15
Channels of Distribution
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- Discounters gain share
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- Figure 50: Estimated distribution of spending on beauty and personal care products, 2015
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- Figure 51: Estimated distribution of spending on beauty and personal care products, in percentage and value terms (including VAT), 2014 and 2015
Launch Activity and Innovation
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- Fashion retailers branch out into beauty
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- Figure 52: H&M’s beauty range, 2015
- Harvey Nichols launches beauty concierge
- Tesco teams up with online bloggers
- Bridging the gap between in-store and online
- Boots taps into expanding dermo-cosmetic market
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- Figure 53: The Eau Thermale Avène range in Boots’ Brent cross store
- Harvey Nichols’ customised beauty launches
- Aldi launches caviar skin cream
- Augmented reality app for trying new hair colours
- John Lewis and Elemis ramp up in-store beauty service
- Charlotte Tilbury’s first store
Advertising and Marketing Activity
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- Beauty retailers cut back on advertising in 2014, but spend in 2015
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- Figure 54: Recorded above-the-line, online display and direct mail total advertising expenditure on beauty, personal care and body care, by leading retailers, 2012-15
- Television accounts for half of beauty ad spend
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- Figure 55: Recorded above-the-line, online display and direct mail total advertising expenditure on beauty, personal care and body care, by leading retailers, 2014
- Nielsen Media Research coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 56: Attitudes towards and usage of selected brands, November 2015 and December 2015
- Key brand metrics
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- Figure 57: Key metrics for selected retail brands, November 2015 and December 2015
- Brand attitudes: Lush has advantage on environmental and social responsibility
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- Figure 58: Attitudes, by brand, November 2015 and December 2015
- Brand personality: L’Occitane has a particularly exclusive image
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- Figure 59: Brand personality – macro image, November 2015 and December 2015
- Superdrug has an association with being basic
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- Figure 60: Brand personality – micro image, November 2015 and December 2015
- Brand analysis
- Amazon continues to enjoy a strong position
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- Figure 61: User profile of Amazon, December 2015
- John Lewis leads direct competitors on customer service and online offering
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- Figure 62: User profile of John Lewis, November 2015
- Boots is noted for reliability and accessibility
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- Figure 63: User profile of Boots, November 2015
- Lush offers a fun and vibrant option
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- Figure 64: User profile of Lush, November 2015
- Marks & Spencer still has a strong reputation but is more likely to be seen as boring and tired than others
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- Figure 65: User profile of Marks & Spencer, November 2015
- Superdrug is considered a value option but some see it as basic
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- Figure 66: User profile of Superdrug, November 2015
- Debenhams lags behind other department stores
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- Figure 67: User profile of Debenhams, November 2015
- L’Occitane has premium connotations but exclusivity means it lacks trust and usage
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- Figure 68: User profile of L’Occitane, November 2015
- World Duty Free’s image and usage is limited by locations
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- Figure 69: User profile of World Duty Free, November 2015
Alliance Boots
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- What we think
- Spending spree
- Restructuring the US business
- Implications for Boots
- Boots strategy
- Company background
- Company performance
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- Figure 70: Alliance Boots: Group financial performance, 2010/11-2014/15
- Figure 71: Alliance Boots: Outlet data, 2010/11-2014/15
- Retail offering
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- Figure 72: Boots: UK Sales mix, 2008/09-2013/14
A. S. Watson UK
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- What we think
- Superdrug recovers in 2014
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- Figure 73: Superdrug’s Beauty Studio store in Cardiff
- The Perfume Shop opens up store environment
- Savers expands store network
- Company background
- Company performance
- Group financial performance
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- Figure 74: A. S. Watson UK: Group financial performance, 2010-14
- Outlet data
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- Figure 75: A. S. Watson UK: Outlet data (part estimated), 2010-14
- Retail offering
- Superdrug
- The Perfume Shop
- Savers
The Body Shop
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- What we think
- Pushing its ethical credentials in an increasingly crowded market
- New loyalty scheme
- Rush-hour makeovers
- Company background
- Company performance
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- Figure 76: The Body Shop - Retail Sales: Group financial performance, 2010-14
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- Figure 77: The Body Shop: Estimated UK sales performance, 2010-14
- Figure 78: The Body Shop - Retail Sales: Outlet data, 2010-14
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- Figure 79: The Body Shop: Outlet breakdown, 2010-14
- Retail offering
Debenhams
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- What we think
- In-store experience and beauty exclusives
- Conveniently located stores
- Multichannel improvements aimed at making online beauty purchasing more convenient
- Customer service
- Company background
- Company performance
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- Figure 80: Debenhams: Group financial performance, 2010/11-2014/15
- Figure 81: Debenhams: Estimated beauty sales, 2011/12-2013/14
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- Figure 82: Debenhams: Outlet data, 2010/11-2014/15
- Retail offering
The Fragrance Shop
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- What we think
- Affordable prices
- Free gifts and samples
- Making online fragrance shopping risk-free and as convenient as possible
- Authentic scents direct from the fragrance houses
- Wide selection of brand names and exclusives
- Perfumery expertise
- New product categories
- Company background
- Company performance
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- Figure 83: The Fragrance Shop: Group financial performance, 2010/11-2014/15
- Figure 84: The Fragrance Shop: Outlet data, 2010/11-2014/15
- Retail offering
House of Fraser
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- What we think
- Refurbished beauty halls to attract new prestige brands
- Beauty Confidential
- Expanding online beauty offering
- Enhanced multi-channel shopping experience
- Ancillary beauty services
- House Brand beauty opportunity?
- Company background
- Company performance
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- Figure 85: House of Fraser Plc: Group financial performance, 2010/11-2014/15
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- Figure 86: House of Fraser Plc: Estimated beauty sales, 2011/12-2014/15
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- Figure 87: House of Fraser Plc: Outlet data, 2010/11-2014/15
- Retail offering
John Lewis
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- What we think
- Price promise pledge
- Refurbished beauty departments attract new brands
- New lifestyle shopping concept
- In-store beauty services
- Impact of click-and-collect charge on online beauty sales
- Company background
- Company performance
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- Figure 88: John Lewis Plc (department store): Group financial performance, 2010/11-2014/15
- Figure 89: John Lewis: Estimated beauty and personal care goods sales (excluding VAT), 2011/12-2013/14
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- Figure 90: John Lewis Plc (department store): Outlet data, 2010/11-2014/15
- Retail offering
Lush Retail
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- What we think
- Unique and innovative product offering
- Bigger stores to showcase brand uniqueness and full product range
- Online sales growth on back of fully responsive website launch
- In-store digital customer engagement
- Scent and mood shopping app
- In-store spa experience
- Company background
- Company performance
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- Figure 91: Lush Retail Ltd: Group financial performance, 2010/11-2014/15
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- Figure 92: Lush Retail Ltd: Outlet data, 2010/11-2014/15
- Retail offering
The Consumer – What You Need To Know
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- Discount stores are the winners
- Young woman are most fickle
- Smartphones used for research
- Competitive prices are the key driver
- Discount shoppers rate their prices and own-label
- Word-of-mouth recommendation more important for prestige than discount shoppers
- Delivering on claims
Types of Beauty Products Bought
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- Skincare is the most purchased category
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- Figure 93: Types of product bought either in-store or online, October 2015
- Women’s beauty purchases
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- Figure 94: Types of product bought either in-store or online – by women, October 2015
- Men’s beauty purchases
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- Figure 95: Types of product bought either in-store or online – by women, October 2015
Where They Bought
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- Beauty/health stores most popular channel
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- Figure 96: Main channels where they bought beauty products in the last 12 months, October 2015
- Boots dominates the market
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- Figure 97: Where they bought beauty products in the last 12 months, either in-store or online, October 2015
- Gender preferences
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- Figure 98: Where they bought beauty products in the last 12 months, by gender, October 2015
- Online versus in-store
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- Figure 99: Beauty/health specialists: where they bought beauty products in the last 12 months, October 2015
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- Figure 100: Supermarkets and discounters: where they bought beauty products in the last 12 months, October 2015
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- Figure 101: Other retailers: Where they bought beauty products in the last 12 months, October 2015
- Consumer usage by age and affluence
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- Figure 102: Where they bought beauty products in the last 12 months, by age and affluence, October 2015
- Trend data
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- Figure 103: Where they bought beauty products, in-store and online, November 2014 and October 2015
- Men, the elderly and the retired shop around less
- Young women are the most fickle
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- Figure 104: Buying repertoire (in-store and online) in the last 12 months by gender, age and socio-economic group, October 2015
- The less affluent shop around more
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- Figure 105: Buying repertoire (in-store and online) for those who shop at five or more stores in the last 12 months by gender, age and socio-economic group, November 2014 and October 2015
- Boots has the most loyal customers
- Opportunity for Wilkinsons
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- Figure 106: Buying repertoire (in-store and online) by where they buy, October 2015
Why They Use Discount Stores
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- Price the number one driver
- Word-of-mouth recommendation could become more important
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- Figure 107: Reasons for using discount stores in the last 12 months, October 2015
- Men more influenced by advertising
- Women rate the discounters’ own-labels
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- Figure 108: Reasons for using discount stores in the last 12 months, by gender, October 2015
- Brands are cheaper at other discount stores
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- Figure 109: Reasons for using discount stores in the last 12 months, crossed by discount stores used, October 2015
Key Drivers Analysis
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- Price the most important driver in all product categories
- A promotions driven market
- Fragrance and aftershave – quality counts
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- Figure 110: Key factors in deciding where to shop for beauty products in the last 12 months, October 2015
- Loyalty cards and staff expertise
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- Figure 111: Further factors in deciding where to shop for beauty products in the last 12 months, October 2015
- Own-label is a key driver for older shoppers
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- Figure 112: Key factors in deciding where to shop for skincare in the last 12 months, by age and affluence October 2015
- Convenient opening hours matter to younger shopper
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- Figure 113: Key factors in deciding where to shop for Make-up in the last 12 months, by age and affluence October 2015
- Competitive prices on fragrance and aftershave
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- Figure 114: Key factors in deciding where to shop for fragrance/aftershave in the last 12 months, by age and affluence, October 2015
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- Figure 115: Key factors in deciding where to shop for men’s shaving cream in the last 12 months, by age and affluence October 2015
Smartphone Usage
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- Smartphones predominantly used for researching purposes
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- Figure 116: How beauty buyers have used a smartphone to research and shop for beauty products in the last 12 months, October 2015
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- Figure 117: How beauty buyers have used a smartphone to research and shop for beauty products in the last 12 months – 16-24s, by gender, October 2015
- Opportunity for more personalised approach in apps
- Alert services could be used to offer guidance for men
- Using virtual reality to encourage product testing
- Department store shoppers use their phone for research purposes
Prestige Beauty Buyers
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- Under-45s men most important prestige buyers
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- Figure 118: Those who had bought prestige brands in the last 12 months, by gender/age, October 2015
- Buying also skewed to the most affluent
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- Figure 119: Those who had bought prestige brands in the last 12 months, by household income, October 2015
- London centric
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- Figure 120: Those who had bought prestige brands in the last 12 months, by region, October 2015
- Quality tops the bill
- Personal recommendations are influential
- Packaging matters to the young and to men
- Delivering on claims
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- Figure 121: Reasons people bought prestige brands in the last 12 months, October 2015
- Figure 122: Reasons for people buying prestige brands in the last 12 months, by age and affluence, October 2015
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Market size
- National statistics data
- Market shares
- Retail sector size
- Forecast methodology
- Usage of IRI data
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