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Beauty and Personal Care Retailing - Italy - January 2021

OVERVIEW
Key issues covered in this Report
Areas covered in this Report
EXECUTIVE SUMMARY
The market
Consumer spending
Figure 1: Italy: Annual % change in total consumer spending on beauty and personal care and total consumer spending, 2015-20
Sector size and forecast
Figure 2: Italy: annual % change in retail sales, 2015-20
Channels of distribution
Companies and brands
Key metrics
Market shares
Figure 3: Italy: leading BPC specialists’ estimated share of all spending on beauty and personal care, 2019
Online
The consumer
Beauty and personal care products purchased
Figure 4: ITALY: bEAUTY AND PERSONAL CARE PRODUCTS PURCHASED IN THE LAST 12 MONTHS, November 2019 and October 2020
Online and in-store shopping for beauty and personal care products
Figure 5: Italy: in-store and online buyers of beauty and personal care products, November 2019 and October 2020
Where beauty and personal care products are purchased
Figure 6: Italy: where beauty and personal care products were purchased, November 2019 and October 2020
Attitudes to innovations in BPC retailing
Figure 7: Italy: attitudes towards shopping in-store for beauty/personal care products, October 2020
Figure 8: Italy: attitudes towards shopping online for beauty/personal care products, October 2020
THE IMPACT OF COVID-19 ON BEAUTY AND PERSONAL CARE RETAILING
Short, medium and long term impact on the sector
Figure 9: Short, medium and long term impact of COVID-19 on beauty and personal care retailing, February 2021
 OPPORTUNITIES AND THREATS
But the online experience can go so much further
Virtual consultations
Figure 10: Bobbi Brown Virtual Services Homepage, August 2020
Product recommendations using AI
Figure 11: The Inkey List #askINKEY Campaign, 2020
Figure 12: Boots No7 Personalised Skin Analysis, 2020
Adding the human touch with live-streaming
Making beauty shopping more fun
Making shopping safe will pay off
Cash-strapped consumers may restrict BPC spend
 HOW COVID-19 WILL RESHAPE THE INDUSTRY
Delivery and click-and-collect will continue to ride on convenience
Social media will play a greater role
The store-experience will need to be even better
BPC online audience has grown and specialists must embrace this
Sustainability will continue to be high on the agenda
Health and beauty specialists struggle in 2020
Figure 13: Europe Big Five: total health and beauty specialist retailers’ sales and forecast, 2015-25
Figure 14: Europe Big Five: total health and beauty specialist retailers’ sales and forecast, by country, 2015-25
 THE IMPACT OF COVID-19 ON CONSUMER BEHAVIOUR ACROSS EUROPE
Concerns around exposure to COVID-19 rise as second wave hits
Figure 15: Europe: those extremely worried about the risk of being exposed to COVID-19, March 2020-January 2021*
 THE FINANCIAL IMPACT OF COVID-19
Furlough and job losses
Spending falls and consumers look to save where possible
Figure 16: Europe: financial impact of COVID-19, January 2021*
 CHANGES TO SHOPPING BEHAVIOUR
Non-essential spending reduced
Desire to spend less time in-store
Cash is no longer king
Localism rises up the agenda
Online shopping receives major boost
Second wave leads to renewed stockpiling
Figure 17: Europe: changes to shopping behaviour since the start of the COVID-19 outbreak, January 2021*
Consumers are trying not to handle/touch products in-store
Figure 18: Europe: people who would feel uncomfortable handling/touching products in-store, November 2020*
 SPENDING INTENTIONS
Beauty sector sees planned spending decrease
Figure 19: Net balance* of expected spending on selected items in the next month, January 2021**
German consumers the only group planning to spend more on beauty
Figure 20: Europe: net balance* of expected spending on beauty products and toiletries in the next month, January 2021**
 HOW THE CRISIS IS IMPACTING ON KEY CONSUMER SEGMENTS
Women and older people most concerned about the pandemic
Figure 21: Europe: those extremely worried about the risk of being exposed to COVID-19, by gender and age, January 2021*
Women and older age groups also trying to limit time in-store
Figure 22: Europe: consumers trying to limit the time they spend in-store, by gender and age, January 2021*
Online shopping boom is relatively uniform
Figure 23: Europe: consumers shopping more online, by gender and age, January 2021*
Younger and middle-aged consumers more likely to be cutting back on non-essential spend
Figure 24: Europe: consumers cutting back on non-essential spending, by gender and age, January 2021*
 COVID-19: MARKET CONTEXT
UK
France
Germany
Italy
Spain
ISSUES AND INSIGHTS 
COVID-19 impact on livelihoods and lifestyles will hit BPC retail
Economic impact will drive increased focus on value
Structural shifts will lead to lower store footfall and stronger online demand
A growing localism/nationalism movement
What advantages can multichannel retailers leverage over online-only rivals?
Online-only penetration is growing fast
Amazon increases its penetration of the beauty market
Expertise combined with personal and personalised service
Online can complement the offline offer
Blurring the lines between physical and digital
The ability to personalise products and offers
Multi-channel business models cover all bases but role of stores is changing
THE MARKET – KEY TAKEAWAYS
Italian consumer spending power under pressure
Retailers are having to adjust their product mix
Sector declines by 7.1% in 2020
Pandemic reverses trend away from supermarkets
CONSUMER SPENDING
Figure 25: Italy: consumer spending on beauty and personal care (including VAT), 2015-20
SECTOR SIZE AND FORECAST
Figure 26: Italy: health & beauty specialists’ sales (excluding VAT), 2015-20
Figure 27: Italy: health & beauty specialists’ sales, Forecasts (excluding VAT), 2021-25
INFLATION
Figure 28: Italy: consumer prices * of personal care items, annual % change, 2015-19
Figure 29: Italy: consumer price inflation (HICP *) on personal care products and services, annual % change, January 2019-December 2020
CHANNELS OF DISTRIBUTION
COMPANIES AND BRANDS – KEY TAKEAWAYS
Increased online presence should be a priority for Acqua & Sapone
Douglas and Tigotà have performed the best
Other players have sought to differentiate themselves
Online
LEADING PLAYERS
Acqua & Sapone at online disadvantage…
…while Tigotà embraced the online channel
Douglas Group recognises importance of online for the future
Other players
Figure 30: Italy: leading beauty specialists, sales, 2015-19
Figure 31: Italy: Leading beauty specialists, outlets, 2015-19
MARKET SHARES
Figure 32: Italy: leading BPC specialists’ estimated share of all spending on beauty and personal care, 2015-19
ONLINE
Online activity 
Shopping online
Online BPC sales
Leading online players
Figure 33: Italy: search interest on Google, selected BPC retailers, last 12 months, January 2020-January 2021
THE CONSUMER – KEY TAKEAWAYS
COVID pandemic drives strong shift to online
Online buying shifts towards m-commerce
Strong appetite for contactless technology in-store
Opportunities in trying to replicate the in-store experience online
Sustainability is high on consumer agendas
BEAUTY AND PERSONAL CARE PRODUCTS PURCHASED
Beauty and personal care product purchasing is universal
Figure 34: Italy: beauty and personal care products purchased in the last 12 months, November 2019 vs October 2020
Women are principal buyers of haircare, skincare and beauty products
Figure 35: ITALY: bEAUTY AND PERSONAL CARE PRODUCTS PURCHASED IN THE LAST 12 MONTHS, by gender, October 2020
ONLINE AND IN-STORE SHOPPING FOR BEAUTY AND PERSONAL CARE PRODUCTS 
Dramatic increase in online shopping in 2020
Figure 36: Italy: in-store and online buyers of beauty and personal care products, November 2019 vs October 2020
Women more likely to shop online
Figure 37: Italy: in-store and online buyers of beauty and personal care products, by gender, October 2020
Online purchasing still concentrated on younger groups
Figure 38: Italy: in-store and online buyers of beauty and personal care products, by age, October 2020
Strongest growth in online purchasing among over-55s
Figure 39: Italy: online buyers of beauty and personal care products, by age, November 2019 vs October 2020
WHERE BEAUTY AND PERSONAL CARE PRODUCTS ARE PURCHASED
Specialists still the preferred outlet but generalists made strong gains in 2020
Figure 40: Italy: where beauty and personal care products were purchased, November 2019 vs October 2020
Where people shopped and what they bought
Figure 41: Italy: where beauty and personal care products were purchased (specialist retailers), by beauty and personal care products purchased, October 2020
Figure 42: Italy: where beauty and personal care products were purchased (non-specialist retailers), by beauty and personal care products purchased, October 2020
ATTITUDES TO INNOVATIONS IN BPC RETAILING
In-store
Hygienic in-store testing is a key priority
Payment innovation offers customer and business benefits
Product refill stations tap into growing sustainability trend
Product information particularly important to older buyers
Figure 43: Italy: attitudes towards shopping in-store for beauty/personal care products, October 2020
Figure 44: Italy: attitudes towards shopping in-store for beauty/personal care products, by products purchased, October 2020
Online
Sustainability in online packaging is an issue
Personalisation trend continues to offer opportunities
Online tools have potential to bridge gap between stores and digital
Figure 45: Italy: attitudes towards shopping online for beauty/personal care products, October 2020
Figure 46: Italy: attitudes towards shopping online for beauty/personal care products, by products purchased, October 2020
APPENDIX
Abbreviations
Data sources

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