Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- BPC market grows 0.4% in 2016
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- Figure 1: Market size and forecast: consumer spending on all beauty and personal care products (including VAT), 2011-21
- Brexit could lead to a return to the ‘lipstick index’
- Specialists perform in line with the market
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- Figure 2: Health and beauty specialists’ sales (including VAT), 2011-21
- Opportunity for mature shoppers to be better represented
- Companies and brands
- Highly fragmented market
- Superdrug delivers growth, whilst Boots suffers maturity
- Food discounters grow their share of consumer spending
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- Figure 3: Estimated distribution of spending on beauty and personal care products, 2016
- Growth in online BPC sales set to accelerate in 2017
- Specialists invest in technology to elevate the in-store experience
- The consumer
- Facial skincare is the most purchased category
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- Figure 4: Beauty products bought in the last 12 months, October 2016
- Consumers trade up for fragrance
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- Figure 5: Brand types bought for beauty products, October 2016
- Specialists are the preferred retailer
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- Figure 6: Where consumers purchase beauty products, by retailer, October 2016
- Loyalty rewards could be more personal
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- Figure 7: Key drivers of overall satisfaction with beauty retailer used most often to purchase in-store, January 2017
- Demand for try-before-you-buy samples
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- Figure 8: Factors that would make consumers more likely to choose one retailer over another online, October 2016
- Physical stores the preference for discovering new beauty products
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- Figure 9: Attitudes towards purchasing beauty, October 2016
- What we think
Issues and Insights
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- Prestige beauty an opportunity to boost value growth
- The facts
- The implications
- The evolving beauty retail environment
- The facts
- The implications
- Earning loyalty among beauty shoppers
- The facts
- The implications
The Market – What You Need to Know
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- BPC market grows 0.4% in 2016
- Personal care segment in decline, slowing growth for beauty sales
- Specialists perform in line with the market
- Opportunity for mature shoppers to be better represented
- Brexit could lead to a return to the ‘lipstick index’
Market Size and Forecast
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- BPC market grows 0.4% in 2016
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- Figure 10: Market size and forecast: consumer spending on all beauty and personal care products (including VAT), 2011-21
- Spending to top £11 billion by 2021
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- Figure 11: Market size and forecast: consumer spending on all beauty and personal care products (including VAT), at current and constant prices, 2011-21
- Forecast methodology
- The impact of the EU referendum vote
- BPC market historically remains robust during economic downturn
- Consumers are excepting towards price rises
- Market likely to grow regardless of economic uncertainty
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- Figure 12: Alternative market scenarios for the post-Brexit clothing and accessories market, at current prices, 2016-21
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- Figure 13: Detailed Post-Brexit scenarios for the clothing and accessories market, at current prices, 2016-21
Market Segmentation
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- Beauty products: segment forecast
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- Figure 14: Consumer spending on beauty products, 2011-21
- Figure 15: Consumer spending on beauty products, 2011-21
- Beauty category performance
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- Figure 16: Consumer spending on beauty products, by category, 2015 and 2016
- Colour cosmetics
- Fragrances
- Facial skincare
- Body, hand and foot care
- Personal care products: segment forecast
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- Figure 17: Consumer spending on personal care products, 2011-21
- Figure 18: Consumer spending on personal care products, 2011-21
- Consumer spending on personal care items
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- Figure 19: Total consumer spending on personal care items (including VAT), 2011-15
- Forecast methodology
Sector Size and Forecast
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- Health and beauty specialists’ sales
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- Figure 20: Health and beauty specialists’ sales (including VAT), 2011-21
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- Figure 21: Health and beauty specialists’ sales (including VAT), at current and constant prices, 2011-21
- Annual growth in beauty specialists sales vs annual growth in BPC spend
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- Figure 22: Annual growth in specialists’ sector sales and annual growth in spending on beauty and personal care products, 2017-21 (fore)
- Outlet and enterprise numbers
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- Figure 23: Health and beauty specialists: Outlet numbers, 2012-16
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- Figure 24: Health and beauty specialists: Enterprise numbers, 2012-16
Market Drivers
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- Youth population in decline
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- Figure 25: Trends in the age structure of the UK population, 2011-21
- Opportunity for mature shoppers to be better represented
- Consumer financial sentiment remains positive
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- Figure 26: How consumers describe their financial situation, November 2016
- Brexit could lead to a return to the ‘lipstick index’
- Prestige beauty bought as a treat
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- Figure 27: Reasons for choosing premium brands over mass, by gender, October 2016
The Consumer – What You Need to Know
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- Facial skincare is the most purchased category
- Consumers trade up for fragrance
- Specialists are the preferred retailer
- Loyalty rewards could be more personal
- Boots’ staff expertise sets it apart
- Demand for try-before-you-buy samples
- Personalised recommendations could boost purchases among young men
- Demand for natural beauty boosted by clean-eating trend
- Physical stores the preference for discovering new beauty products
Beauty Products Bought
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- Facial skincare most purchased category
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- Figure 28: Beauty products bought in the last 12 months, October 2016
- Fragrance popular among all demographics
- Older men the least engaged with skincare
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- Figure 29: Beauty products bought in the last 12 months among men, by age, October 2016
- Young men prioritise facial skincare
Brand Types Bought
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- Consumers trade up for fragrance
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- Figure 30: Brand types bought for beauty products, October 2016
- Mass-market skincare brands preferred
- More money spent on mass-market brands
Retailers Purchased From
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- Specialists are the preferred retailer
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- Figure 31: Where consumers purchase beauty products, by retailer type, October 2016
- Boots retains its dominant position
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- Figure 32: Where consumers purchase beauty products, by retailer, October 2016
- Superdrug gains an increase in shoppers
- Discount supermarkets also make gains
- Men opt for supermarkets over the specialists
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- Figure 33: Where consumers purchase beauty products in-store or online, by gender, October 2016
- Amazon attracts the most online
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- Figure 34: Where consumers purchase beauty products, in-store or online, October 2016
- Repertoire analysis
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- Figure 35: Repertoire of retailers used for purchasing beauty products in the last 12 months, October 2016
Customer Satisfaction
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- Overall satisfaction levels high
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- Figure 36: Satisfaction with the retailer shopped at most often for beauty products, October 2016
- Key drivers analysis
- Loyalty rewards could be more personal
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- Figure 37: Key drivers of overall satisfaction with beauty retailer used most often to purchase in-store, January 2017
- Customer service needs prioritising
- Expanding beauty services outside London
- Store environment most closely correlates with satisfaction
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- Figure 38: Overall satisfaction with beauty retailers used most often to purchase in-store - Key driver output, January 2017
Satisfaction by Retailer
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- Boots’ staff expertise sets it apart
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- Figure 39: Satisfaction of customers who purchase beauty products from Boots most often, in relation to the overall average, October 2016
- Superdrug scores above average for value of own-brands
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- Figure 40: Satisfaction of customers who purchase beauty products from Superdrug most often, in relation to the overall average, October 2016
- Tesco shoppers content with loyalty rewards
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- Figure 41: Satisfaction of customers who purchase beauty products from Tesco most often, in relation to the overall average, October 2016
Factors to Encourage Online Purchases
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- Demand for try-before-you-buy samples
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- Figure 42: Factors that would make consumers more likely to choose one retailer over another online, October 2016
- Emails are an incentive to shop online
- Personalised recommendations could boost purchases among young men
Attitudes towards Buying Beauty
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- Demand for natural beauty boosted by clean-eating trend
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- Figure 43: Attitudes towards purchasing beauty, October 2016
- Environmental concerns heighten
- Opportunity for more diverse beauty collaborators
- Stores the preference for discovering new beauty products
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- Figure 44: Attitudes towards purchasing beauty, October 2016
- Technology to boost the in-store experience
Key Players – What You Need to Know
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- Highly fragmented market
- Superdrug delivers growth, whilst Boots suffers maturity
- Department stores gain market share
- Food discounters grow their share of consumer spending
- Growth in online BPC sales set to accelerate in 2017
- Using apps to attract online beauty shoppers
- Specialists invest in technology to elevate the in-store experience
- Advertising spend on the rise
- Boots benefits from a good reputation
Market Share
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- Highly fragmented market
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- Figure 45: Leading specialist and non-specialist retailers: Estimated market shares, 2015
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- Figure 46: Leading specialist and non-specialist retailers: Estimated market shares, 2013-15
- Note on market shares
Leading Specialist Retailers
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- Superdrug growing despite maturity
- Boots lacks a compelling online offer
- Prestige beauty retailers outperform
- Leading specialists by sales
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- Figure 47: Leading specialist retailers: Net revenues (excluding VAT), 2011-15
- Leading pharmacies by sales
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- Figure 48: Leading pharmacy chains: Net revenues (excluding VAT), 2011-15
- Outlet numbers and sales per outlet
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- Figure 49: Leading specialist retailers: Outlet numbers, 2011-15
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- Figure 50: Leading specialist retailers: Annual sales per outlet (excluding VAT), 2011-15
- Operating profits and margins
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- Figure 51: Leading specialist retailers: Operating profits, 2011-15
- Figure 52: Leading specialist retailers: Operating margins, 2011-15
Leading Non-Specialist Retailers
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- Discount grocers continue in strength
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- Figure 53: Leading non-specialist retailers: Estimated sales growth by segment, 2015
- Leading non-specialists: Estimated beauty revenues
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- Figure 54: Leading non-specialist retailers: Estimated beauty and personal care goods sales (excluding VAT), 2013-15
- The supermarkets
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- Figure 55: Leading grocers: Health and beauty space allocation estimates, October 2016
- The discounters
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- Figure 56: Leading mixed goods discounters: Health and beauty space allocation estimates, August 2016
- The department stores
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- Figure 57: Leading department stores: Health and beauty space allocation estimates, March 2016
- QVC launches Beauty iQ
Space Allocation Summary
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- Figure 58: Leading health and beauty retailers: Health and beauty products estimated space allocation, December 2016
- Specialist personal care and beauty retailers
- Supermarkets’ in-store space largely occupied by toiletry essentials
- Department stores focus on core beauty products
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- Figure 59: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2016
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- Figure 60: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2016
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Channels to Market
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- Specialists struggle to grow share
- Aldi and Lidl gain share
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- Figure 61: Estimated distribution of spending on beauty and personal care products, 2016
- Department stores drive value growth
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- Figure 62: Estimated distribution of spending on beauty and personal care products, in percentage and value terms (including VAT), 2015 and 2016
Online
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- Online BPC market forecast to grow 8.8% in 2017
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- Figure 63: Estimated online consumer spending on BPC products, 2011-17
- The specialists gain momentum online
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- Figure 64: Retailer shares of online sales of BPC products, 2014-16
Launch Activity and Innovation
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- Estée Lauder targets Millennials with new London store
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- Figure 65: The Estée Edit, Carnaby Street 2016
- Department stores improve beauty experience instore
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- Figure 66: Harvey Nichols Beauty Lounge, 2016
- The rise of magic mirrors
- Personalising the online experience
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- Figure 67: Feel Unique Platinum, 2016
- Try before you buy gets a digital make-over
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- Figure 68: Feel Unique Make Up Live App, 2016
- Sephora rewards loyal social media followers
- Ocado partners with Marie Claire on new beauty store
- Missguided taps into high-street beauty trend
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- Figure 69: Missguided Beauty Range, 2016
- Lush hosts instore beauty and fitness sessions
- Superdrug draws attention to own-brand with vending machines
- WAH Nails new flagship boasts virtual reality technology
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- Figure 70: WAH London Soho Store, 2016
- The Good Ship Benefit
Advertising and Marketing Activity
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- Product category advertising spend up 14% in 2015
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- Figure 71: Recorded above-the-line, online display and direct mail total advertising expenditure on beauty, personal care and body care, by leading retailers, 2013-16
- TV and Press accounts for the vast majority of advertising spend
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- Figure 72: Recorded above-the-line, online display and direct mail total advertising expenditure on beauty, personal care and body care, by leading retailers, 2015
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 73: Attitudes towards and usage of selected brands, December 2016
- Key brand metrics
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- Figure 74: Key metrics for selected brands, December 2016
- Brand attitudes: Superdrug offers value for money
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- Figure 75: Attitudes, by brand, December 2016
- Brand personality: The Body Shop retains its ethical reputation
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- Figure 76: Brand personality – Macro image, December 2016
- Boots has a reliable and welcoming image
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- Figure 77: Brand personality – Micro image, December 2016
- Brand analysis
- Boots has an opportunity to boost appeal amongst men
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- Figure 78: User profile of Boots, December 2016
- Superdrug benefits from a reputation of reliability
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- Figure 79: User profile of Superdrug, December 2016
- Lush attracts young consumers with its trendsetting image
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- Figure 80: User profile of Lush, December 2016
- The Perfume Shop struggles to differentiate itself
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- Figure 81: User profile of The Perfume Shop, December 2016
- Space NK proves popular with older Millennials
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- Figure 82: User profile of Space NK, December 2016
- The Body Shop’s ethics set it apart
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- Figure 83: User profile of The Body Shop, December 2016
- The Fragrance Shop needs to increase engagement
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- Figure 84: User profile of The Fragrance Shop, December 2016
- Avon’s tired brand image fails to attract young shoppers
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- Figure 85: User profile of Avon, December 2016
A. S. Watson (Europe)
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- What we think
- Solid performance
- Service
- New outlets
- Marionnaud
- Company background
- Marionnaud
- Company performance
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- Figure 86: A. S. Watson (Europe): Group financial performance, 2011-15
- Figure 87: A. S. Watson (Europe): Outlet data, 2011-15
- Retail offering
- Continental Europe
- UK
The Body Shop
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- What we think
- Enrich Not Exploit
- Skincare products driving sales
- Maximising mobile opportunities
- New UK store concept offering an enhanced beauty shopping experience
- Company background
- Company performance
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- Figure 88: The Body Shop: Retail and consolidated sales, 2011-15
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- Figure 89: The Body Shop: Estimated UK sales performance, 2011-15
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- Figure 90: The Body Shop – Retail sales: Estimated outlet data, 2011-15
- Retail offering
Debenhams
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- What we think
- Relying on exclusivity to boost beauty sales
- Providing beauty treatments could offer further opportunities to showcase products
- Beauty Club generates loyalty and valuable data
- Company background
- Company performance
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- Figure 91: Debenhams: Group financial performance, 2011/12-2015/16
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- Figure 92: Debenhams: Outlet data, 2011/12-2015/16
- Retail offering
The Fragrance Shop
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- What we think
- Personalised app to help choose the perfect scent
- Record sales driven by affordable on-trend scents
- New home delivery service to capitalise on last minute fragrance purchases
- Convenient on-the-move fragrance product boosts sales
- Company background
- Company performance
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- Figure 93: The Fragrance Shop: Group financial performance, 2011/12-2015/16
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- Figure 94: The Fragrance Shop: Outlet data, 2011/12-2015/16
- Retail offering
House of Fraser
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- What we think
- Senior management departures
- Beauty to be targeted in 2017
- Company background
- Company performance
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- Figure 95: House of Fraser Plc: Group financial performance, 2011/12-2015/16
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- Figure 96: House of Fraser Plc: Outlet data, 2011/12-2015/16
- Retail offering
John Lewis
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- What we think
- Scope to grow beauty revenues
- Stores rather than online underperforming in beauty category
- Spas help to create a virtuous circle
- Company background
- Company performance
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- Figure 97: John Lewis Plc (department store): Group financial performance, 2011/12-2015/16
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- Figure 98: John Lewis Plc (department store): Outlet data, 2011/12-2015/16
- Retail offering
Kiko Milano
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- What we think
- An authentic sensory in-store beauty shopping experience
- Professional make-up artists’ recommendations bolster quality credentials
- New smart technology-led store aimed at Millennials
- Company background
- Company performance
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- Figure 99: Kiko Milano: Group sales performance, 2011-16
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- Figure 100: Kiko Milano: Estimated outlet data, 2011-16
- Retail offering
Lush Retail
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- What we think
- Distinctive USP that resonates with the 50% of consumers looking for natural beauty products
- Transparency and authenticity
- Enhanced store experience
- Targeting fresh growth opportunities
- Building a global open-source platform to connect its growing online community
- Company background
- Company performance
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- Figure 101: Lush Retail Ltd: Group financial performance, 2010/11-2014/15
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- Figure 102: Lush Retail Ltd: Outlet data, 2010/11-2014/15
- Retail offering
Walgreens Boots Alliance
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- What we think
- Growth is going to have to come from core retail operations
- Strategy focusing on cost reduction and improving efficiency
- Growth of online grocery shopping may be hurting Boots
- A reason to visit
- Boots to become less significant within Walgreens after Rite-Aid completion
- Company background
- Company performance
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- Figure 103: Walgreens Boots Alliance: Group financial performance, 2011/12-2015/16
- Figure 104: Walgreens Boots Alliance: Outlet data, 2011/12-2015/16
- Retail offering
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
Appendix – Key Driver Analysis
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- Methodology
- Interpretation of results
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- Figure 105: Overall satisfaction with beauty retailers used most often to purchase in-store - Key driver output, January 2017
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- Figure 106: Satisfaction with beauty retailers used most often to purchase in-store, January 2017
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