Beauty Retailing - Europe - January 2017

OVERVIEW
Areas covered in this report
 TECHNICAL NOTES
Market size
Mintel’s market sizes
National statistics data
Retail sector sizes
Financial definitions
Abbreviations
VAT rates
Figure 1: VAT rates around Europe, 2012-17
EXECUTIVE SUMMARY – EUROPE – THE MARKET
 THE MARKET
Specialists’ sales
Figure 2: Europe: Health and beauty retailers’ sales, ex VAT, 2012-16
Figure 3: Europe: Health and beauty retailers’ forecast sales, ex VAT, 2017-21
Figure 4: Europe: Drugstores’ forecast sales, ex VAT, 2012-16
Figure 5: Europe: Drugstores’ forecast sales, ex VAT, 2017-21
Spending on personal care goods and services
Figure 6: Europe: Consumer spending on personal care products and services, inc. VAT, 2011-15
Inflation
Figure 7: Europe: Inflation in personal care goods and services, 2011-15
Figure 8: Europe: Estimated inflation rate in personal care goods, 2011-15
 LEADING RETAILERS
Sales
Figure 9: Europe: Top 20 beauty specialists, Sales, 2013/14-2015/16
Outlets
Figure 10: Europe: Top 20 beauty specialists, Outlets, 2013/14-2015/16
Sales per outlet
Figure 11: Europe: Top 20 beauty specialists, Sales per outlet, 2013/14-2015/16
Market shares
Figure 12: Europe: Top 20 beauty retailers, Sales relative to all drugstore sales, 2015/16
 ONLINE
Figure 13: Europe: Estimated online share of all spending on personal care goods, 2015
 WHAT WE THINK
Beauty performing well in good times and bad
The importance of in-store experience
Online accounts for few purchases
Where next?
EXECUTIVE SUMMARY – EUROPE – THE CONSUMER
Who bought beauty products?
Figure 14: Europe: Buyers of beauty products in the last 12 months, November 2016
Figure 15: Europe: Male buyers of beauty products in the last 12 months, November 2016
Figure 16: Europe: Female buyers of beauty products in the last 12 months, November 2016
Where they shop for beauty products
Figure 17: Europe: Pharmacy/drugstore/parapharmacy shoppers for beauty products either in-store or online in the last 12 months, November 2016
Figure 18: Europe: Supermarket/hypermarket shoppers for beauty products either in-store or online in the last 12 months, November 2016
Figure 19: Europe: Perfumery shoppers for beauty products either in-store or online in the last 12 months, November 2016
Attitudes to shopping for beauty products
Figure 20: Europe: Those who agree with attitudes to beauty retailing, November 2016
Figure 21: Europe: Ranking of those who agree with attitudes to beauty retailing, November 2016
EXECUTIVE SUMMARY – EUROPE – INNOVATION AND LAUNCH ACTIVITY
France: Dior and Olay deliver personalised product recommendations
France: Urban Decay opens first permanent store
Netherlands: Plein offers automated subscription service
France: Marionnaud targets the ‘transumer’
Germany: dm-drogerie markt collaborates with popular vlogger
Italy: Kiko Milano integrates technology in new concept
South Korea: Lipstick Lab offers custom two-tone lipstick
US: American beauty brands enlist male ambassadors
FRANCE
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Figure 22: France: Annual percentage growth in spending on personal care articles and all spending, 2011-16
Channels of distribution
Figure 23: France: Estimated channels of distribution for spending on beauty and personal care goods, 2015
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 24: France: Leading beauty specialists: Shares of all beauty retailers’ sales, 2015
Online
The consumer
Where they shop
Figure 25: France: Where they shop for beauty products, in-store and online, November 2016
Attitudes to Shopping for Beauty Products
Figure 26: France: Attitudes to shopping for beauty products, November 2016
What we think
 ISSUES AND INSIGHTS
Stores are important but must move with the times
The facts
The implications
The rise of the green consumer
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Growth in economy and beauty spending is low
Low price rises on personal care items
Grocers and specialist chains are the main channels
Beauty retailers thriving despite weak spending
 SPENDING AND INFLATION
Economic growth is sluggish
Market size and trend
Figure 27: France: Consumer spending on beauty and selected other goods (incl. VAT), 2011-16
Inflation
Figure 28: France: Consumer prices of personal care goods and services items, Annual % change, 2011-15
Figure 29: France: Consumer price inflation on personal care products and services, annual % change, January 2015-November 2016
 PRODUCT MARKET BREAKDOWN
Figure 30: France: Main beauty markets, spending (inc VAT), 2011-16
Figure 31: France: Main beauty markets, spending (inc VAT), forecasts, 2016-20
 CHANNELS OF DISTRIBUTION
Figure 32: France: Where they shop for beauty products, in-store and online, November 2016
Grocers capture most spending
Beauty specialists popular across the board
The parapharmacy concept building strength
Department stores significant, particularly in Paris
Cosmetic ranges in clothing stores try to draw in customers
Figure 33: France: Estimated channels of distribution for spending on beauty and personal care goods, 2015
 SECTOR SIZE AND FORECAST
Total retail sales recovered in 2015, further growth forecast in 2016
Beauty retailers’ sales accelerating
Figure 34: France: Health & beauty retailers sales, excl VAT, 2011-16
Figure 35: France: Health & beauty retailers sales, Forecasts, excl VAT, 2016-21
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
Specialists as a whole are thriving
Top nine generate 70% of sector sales
Online small but growing
Social media a crucial tool amongst younger age groups
 LEADING PLAYERS
Specialists thriving
Low priced cosmetics a key growth area
Integration of beauty services
Natural/green credentials increasingly important
Sephora continues to innovate
Nocibé thrives under Douglas ownership
Marionnaud fighting back
Yves Rocher new store format
Figure 36: France: Leading beauty specialists, Sales, 2013-16
Figure 37: France: Leading beauty specialists, Outlet numbers, 2013-16
Sales per outlet
Figure 38: France: Leading beauty specialists, Sales per outlet, 2013-16
 MARKET SHARES
Figure 39: France: Leading beauty specialists: Shares of all beauty retailers’ sales, 2013-16
 ONLINE
Internet usage
Shopping online
Figure 40: France: Online buyers in last 12 months in key sectors, 2011-16
Online sales
Leading online players
Figure 41: France: Beauty retailers: Transactional websites, December 2016
Social media
Which social media do consumers use for beauty content?
Figure 42: France: Online platforms visited to view beauty content, by age, 2015
What beauty content are consumers interested in?
Figure 43: France: Interest in future beauty content on social media, by gender, 2015
What beauty content activities do they do online?
Figure 44: France: Beauty and personal care social media activities, by age, 2015
What do they think about beauty blogs and vlogs?
Figure 45: France: Attitudes to beauty blogs and vlogs, by age, 2015
 THE CONSUMER – WHAT YOU NEED TO KNOW
Women the key demographic
Grocers the most popular channel
Almost half had bought online
Green and natural the two most important concerns
Online and in-store both valued
Personalisation an opportunity
 WHERE THEY SHOP FOR BEAUTY PRODUCTS
Women the main shoppers
Figure 46: France: Who shops for beauty products, by age, November 2016
Figure 47: France: Where they shop for beauty products, in-store and online, November 2016
Loyalty
Figure 48: France: Repertoire of in-store retailers used, by age, November 2016
Customer profiles
Figure 49: France: Profile of those who bought in-store, by type of retailer used, November 2016
Figure 50: France: Profile of those who bought online, by type of retailer used, November 2016
 ATTITUDES TO SHOPPING FOR BEAUTY PRODUCTS
Figure 51: France: Attitudes to shopping for beauty products, November 2016
“Green” and “natural” top the list of concerns
Figure 52: France: Selected attitudes to shopping for beauty products, by age, November 2016
The influence of online
Figure 53: France: Selected attitudes to shopping for beauty products, by age, November 2016
Many strengths in store environments
Figure 54: France: Selected attitudes to shopping for beauty products, by age, November 2016
Younger shoppers want more personalisation
Figure 55: France: Selected attitudes to shopping for beauty products, by age, November 2016
Attitudes by where people shop
Figure 56: France: Attitudes to shopping for beauty products by where people shop, November 2016
 OTHER CONSUMER RESEARCH
Types of cosmetic brands bought
Figure 57: France: Make-up brands used/bought by women in the last 12 months, by age, 2016
Buying fragrance
Figure 58: France: Interest in trying fragrance tools or concepts if available, 2016
Facial skincare shopping behaviours
Figure 59: France: Women’s purchasing behaviours of facial skincare products, 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
GERMANY
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Figure 60: Germany: Annual % change in total household expenditure and expenditure on personal care, 2012-16
Figure 61: Germany: Consumer price inflation on personal care products and services, annual % change, May 2015-Oct 2016
Channels of distribution
Figure 62: Germany: Estimated channels of distribution for personal care products, 2016
Sector size and forecast
Leading players
dm-drogerie markt extends leadership position
Market shares
Figure 63: Germany: Leading beauty specialists: Shares of all beauty retailers’ sales, 2016
Online small but growing
Social media an important part of the purchase journey
The consumer
Where they shop
Figure 64: Germany: Where they shop for beauty products, in-store or online, November 2016
Attitudes to shopping for beauty products
Figure 65: Germany: Attitudes to shopping for beauty products, November 2016
What we think
 ISSUES AND INSIGHTS
The changing role of the store
The facts
The implications
Greater clarification desired for environmental and health concerns
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Consumer spending on personal care remains strong
Personal care category has an inflationary impact
Colour cosmetics the fastest growing segment
Drugstores continue to dominate the market
Strong but slowing growth in retail sales
 SPENDING AND INFLATION
Economy healthy
Consumer spending
Figure 66: Germany: Consumer spending on personal care products and services (incl. VAT), 2011-16
Inflation
Figure 67: Germany: Harmonised index of consumer prices, annual % change, 2011-15
Figure 68: Germany: Consumer price inflation on personal care products and services, annual % change, May 2015-Oct 2016
 PRODUCT MARKET BREAKDOWN
Figure 69: Germany: Main beauty markets, Spending (inc VAT), 2011-16
Figure 70: Germany: Main beauty markets, Spending (inc VAT), Forecasts, 2016-20
 CHANNELS OF DISTRIBUTION
Specialists dominate
Discounters grow their influence
Department stores losing relevance
Online dominated by pureplays
Figure 71: Germany: Estimated channels of distribution for personal care products, 2016
 SECTOR SIZE AND FORECAST
Strong but slowing growth
Figure 72: Germany: Health & beauty retailers’ sales, excl VAT, 2011-16
Figure 73: Germany: Health & beauty retailers sales, forecasts, excl VAT, 2016-21
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
dm-drogerie market extends its dominant position
Rossmann looks to acquire Budni
dm-drogerie markt enjoys market share gains
Online remains small for beauty retailers
 LEADING PLAYERS
dm-drogerie markt cements its leading position
New store openings drive sales growth at Rossmann
A calmer year for Douglas
Budnikowsky eyed by Rossmann
Kiko Milano small but growing
Figure 74: Germany: Leading beauty specialists, Sales, 2013-16
Figure 75: Germany: Leading beauty specialists, Outlets, 2013-16
Figure 76: Germany: Leading beauty specialists, Sales per outlet, 2013-16
 MARKET SHARES
Figure 77: Germany: Leading beauty specialists: Shares of all beauty retailers’ sales, 2013-16
 ONLINE
Internet usage
Shopping online
Figure 78: Germany: Online buyers in last three months in key sectors, 2007-16
Figure 79: Germany: Proportion of beauty shoppers that have bought beauty products online in the past 12 months, by age, November 2016
Online beauty sales
Leading online players
Social media
Bloggers trump in-store staff for a third of 16-24 year olds
16-24 year olds not fazed by bloggers/vloggers being paid
Facebook most used but 16-24s prefer YouTube
Freebies and advice drive engagement
Figure 80: Germany: Interest in future beauty content on social media, by gender, 2015
Competitions hold wide appeal
16-24s: the selfie generation
Figure 81: Germany: Beauty and personal care social media activities, by age, 2015
 THE CONSUMER – WHAT YOU NEED TO KNOW
Drugstores remain the firm favourite
More information wanted
Personalisation desired by 16-24 year olds
The internet as a source of advice and inspiration
 WHERE THEY SHOP FOR BEAUTY PRODUCTS
Women still the main purchasers
Figure 82: Germany: Who shops for beauty products, by age and gender, November 2016
Drugstores remain the firm favourite
Figure 83: Germany: Where they shop for beauty products, November 2016
Lack of loyalty among young shoppers
Figure 84: Germany: Repertoire of in-store retailers used, by age group, November 2016
Specialists attract the most affluent
Figure 85: Germany: Profile of those who bought either in-store or online, by type of retailer used, November 2016
97% of beauty buyers shop in-store
Figure 86: Germany: Where they shop for beauty products in-store, November 2016
Multichannel retailers fall behind online
Online beauty is about more than just sales
Figure 87: Germany: Where they shop for beauty products online, November 2016
Product interaction still important
Figure 88: Germany: Women’s purchasing behaviours for facial skincare products, 2016
 ATTITUDES TO SHOPPING FOR BEAUTY PRODUCTS
Consumers want more information
Figure 89: Germany: Attitudes to shopping for beauty products, November 2016
Online an important source of information for young consumers
Figure 90: Germany: Selected attitudes to shopping for beauty products, by age, November 2016
Customisation appeals to 16-24 year olds
Figure 91: Germany: Selected attitudes to shopping for beauty products, by age, November 2016
Experience and experimentation remain important
Figure 92: Germany: Selected attitudes to shopping for beauty products, by age, November 2016
Desire for information extends across the age brackets
Figure 93: Germany: Selected attitudes to shopping for beauty products, by age, November 2016
Attitudes by where they shop
Figure 94: Germany: Attitudes to shopping for beauty products by where they shop, November 2016
 WHAT THEY BOUGHT
Figure 95: Germany: Make-up brands bought by women in the last 12 months, by age, 2016
German consumer interest in fragrance changing technology
Figure 96: Germany: Interest in trying fragrance tools or concepts if available, 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
ITALY
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Figure 97: Italy: Annual % change in total household expenditure and expenditure on personal care goods and services, 2011-16
Figure 98: Italy: Consumer price inflation on personal care products and services, annual % change, Jun 2015-Nov 16
Channels of distribution
Figure 99: Italy: Channels of distribution for personal care products, 2015
Sector size and forecast
Figure 100: Italy: Annual % change in all retail sales (excl. fuel) and beauty specialists’ retail sales, 2011-16
Leading players
Leading retailers strengthen position
Specialists growing share of personal care spending
Figure 101: Italy: Estimated leading beauty specialists’ shares of consumer spending on personal care goods, 2016
Online remains small but is growing
Figure 102: Italy: Any online purchases made in the last 12 months, by country, 2007-16
The consumer
Who shops for beauty products
Where they shop
Figure 103: Italy: Where they shop for beauty products, November 2016
Figure 104: Italy: Where they shop for beauty products, in-store or online, November 2016
Attitudes to shopping for beauty products
Figure 105: Italy: Attitudes to shopping for beauty products, November 2016
What we think
 ISSUES AND INSIGHTS
Using online to engage beauty consumers and drive sales
The facts
The implications
Growing demand for natural and environmentally-friendly beauty products
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Consumer spending on personal care remains weak
Colour cosmetics set to become the biggest segment
Pharmacies steal greater share of consumer spending
Retail sales continue to rise, up 2.8% in 2015
 SPENDING AND INFLATION
General economy
Consumer spending
Figure 106: Italy: Consumer spending on personal care goods and services (incl. VAT), 2011-16
Inflation
Figure 107: France: Consumer prices of personal care goods and services, Annual % change, 2011-15
Figure 108: Italy: Consumer price inflation on personal care products and services, annual % change, Jun 2015-Nov 16
Figure 109: Italy: Breakdown of consumer price inflation on personal care products and services, annual % change, Jun 2015-Nov 16
 PRODUCT MARKET BREAKDOWN
Figure 110: Italy: Main beauty markets, spending (inc VAT), 2011-16
Figure 111: Italy: Main beauty markets, spending (inc VAT), Forecasts, 2016-20
 CHANNELS OF DISTRIBUTION
Pharmacies grow in strength
Figure 112: Italy: Estimated channels of distribution for personal care products, 2013-15
Grocers continue to dominate
Figure 113: Italy: Estimated channels of distribution for personal care products, 2015
Department stores losing share
Figure 114: Italy: Where they shop for beauty products, November 2014/2016
 SECTOR SIZE AND FORECAST
Specialists’ retail sales rise 2.8% in 2015
Figure 115: Italy: Health & beauty retailers sales (excl VAT), 2011-16
Figure 116: Italy: Health & beauty retailers sales, Forecasts, excl VAT, 2016-21
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
Acqua & Sapone’s maintains market leading position
Tigotá further establishes position in the market
Specialists enjoy market share gains
Online retailing remains underdeveloped
 LEADING PLAYERS
Acqua & Sapone continues to dominate
Figure 117: Italy: Leading beauty specialists, Estimated sales, 2013-16
Wycon rapidly expanding store network
Figure 118: Italy: Leading beauty specialists, Estimated outlet numbers, 2013-16
Sales per outlet
Figure 119: Italy: Leading beauty specialists, Sales per outlet, 2013-16
 MARKET SHARES
Consolidation in the specialist beauty market
Figure 120: Italy: Estimated leading beauty specialists’ shares of consumer spending on personal care goods, 2016
Figure 121: Italy: Leading beauty specialists’ estimated share of consumer spending on personal care goods, 2013-16
 ONLINE
Internet usage
Shopping online
Figure 122: Italy: Any online purchases made in the last 12 months, by country, 2007-16
Figure 123: Italy: Any online purchases made in the last three months, by sector, 2007-16
Beauty shopping: In-store vs online
Figure 124: Italy: Where they shop for beauty products, in-store or online, November 2016
Leading online players
Figure 125: Italy: Beauty retailers: Transactional websites, January 2016
Social media
Beauty and personal care social media activities
Figure 126: Italy: Beauty and personal care social media activities, 2015
Interest in future beauty content on social media
Figure 127: Italy: Interest in future beauty content on social media, 2015
 THE CONSUMER – WHAT YOU NEED TO KNOW
Women drive beauty purchasing
Specialist beauty stores attract the most shoppers
In-store remains more popular than online
Consumers want personal product recommendations
 WHERE THEY SHOP FOR BEAUTY PRODUCTS
Women remain the biggest purchasers
Figure 128: Italy: Who shops for beauty products, by age and gender, November 2016
Consumers favour specialist retailers
Figure 129: Italy: Where they shop for beauty products, November 2016
Young shoppers show less retailer loyalty
Figure 130: Italy: Repertoire of in-store retailers used, by age, November 2016
Department stores attract affluent consumers
Figure 131: Italy: Profile of those who bought either in-store or online, by type of retailer used, November 2016
Young people drive online beauty purchasing
Figure 132: Italy: Where they shop for beauty products, in-store vs online, by age, November 2016
Grocers failing to attract online shoppers
Figure 133: Italy: Where they shop for beauty products, in-store and online, November 2016
Purchasing behaviour
Figure 134: Italy: Women’s purchasing behaviours for facial skincare products, 2016
 ATTITUDES TO SHOPPING FOR BEAUTY PRODUCTS
Consumers still prefer to browse and test in-store
Demand for personalised recommendations is high
Figure 135: Italy: Attitudes to shopping for beauty products, November 2016
Young shoppers want in-store beauty services
Older Millennials want to customise their beauty products
Figure 136: Italy: Selected attitudes to shopping for beauty products, by age, November 2016
Mature consumers prefer natural products
Figure 137: Italy: Consumer who look for beauty products that are made with natural ingredients, by age, November 2016
Attitudes by where they shop
Figure 138: Italy: Attitudes to shopping for beauty products by where they shop, November 2016
 WHAT THEY BOUGHT
Mass market brands dominate
Figure 139: Italy: Make-up brands bought by women in the last 12 months, by age, 2016
Big demand for fragrance wipes
Figure 140: Italy: Interest in trying fragrance tools or concepts if available, 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
SPAIN
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Figure 141: Spain: Consumer prices, annual % change, monthly data, 2015-16
Product market breakdown
Channels of distribution
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 142: Spain: Leading beauty specialists: Shares of all beauty retailers’ sales, 2015/16
Online
The consumer
Who buys?
Where they shop
Figure 143: Spain: Where they shop for beauty products, November, 2016
Customer profiles
Figure 144: Spain: Profile of those who bought in-store, by type of retailers used, November 2016
Attitudes to shopping for beauty products
Figure 145: Spain: Attitudes to shopping for beauty products, November 2016
What we think
 ISSUES AND INSIGHTS
The growth potential in environmental concerns
The facts
The implications
The growth of the specialists
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Beauty spending on the rise
Makeup gaining ground
Supermarkets account for one third of beauty spend
Clarel brings growth to the sector
 SPENDING AND INFLATION
General economy
Market size and trend
Figure 146: Spain: Consumer spending on beauty and selected other goods and services (inc VAT), 2011-16
Inflation
Figure 147: Spain: Consumer prices of personal care goods and services, Annual % change, 2011-16
Figure 148: Spain: Consumer prices, annual % change, monthly data, 2015-16
 PRODUCT MARKET BREAKDOWN
Figure 149: Spain: Main beauty markets, Spending (inc VAT), 2011-16
Figure 150: Spain: Main beauty markets, spending (inc VAT), Forecasts, 2016-20
 CHANNELS OF DISTRIBUTION
Figure 151: Spain: Estimated channels of distribution of spending on beauty and personal care products, inc VAT, 2013-15
 SECTOR SIZE AND FORECAST
Figure 152: Spain: Health & beauty retailers’ sales, (ex VAT) 2011-16
Figure 153: Spain: Health & beauty retailers’ sales (ex VAT), Forecasts, 2016-21
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
Clarel leads the sector
Market shares
Online remains small
 LEADING PLAYERS
Clarel leadership to be challenged
Figure 154: Spain: Leading beauty retailers, Sales, 2012/13-2015/16
Figure 155: Spain: Leading beauty retailers, Outlets, 2012/13-2015/16
Figure 156: Spain: Leading beauty retailers, Sales per outlet, 2012/13-2015/16
 MARKET SHARES
Figure 157: Spain: Leading beauty specialists: Shares of all beauty retailers’ sales, 2013/14-2015/16
 ONLINE
Internet usage
Figure 158: Spain: 16-74 year olds who regularly use the internet, 2005-16
Shopping online
Figure 159: Spain: Online buyers in key sectors, 2007-16
 THE CONSUMER – WHAT YOU NEED TO KNOW
Supermarkets, perfumeries and department stores most popular channels
Shoppers looking for environmentally friendly products and good service
 WHERE THEY SHOP FOR BEAUTY PRODUCTS
Bias to women
Where they shop
Figure 160: Spain: Where they shop for beauty products, November, 2016
Who shops where
Figure 161: Spain: Profile of those who bought in-store, by type of retailer used, November 2016
Figure 162: Spain: Profile of those who bought online, by type of retailer used, November 2016
Women’s buying habits
Figure 163: Spain: Women’s purchasing behaviours for facial skincare products, 2016
 ATTITUDES TO SHOPPING FOR BEAUTY PRODUCTS
Figure 164: Spain: Attitudes to shopping for beauty products, November 2016
Attitudes by where people shop
An opportunity for drugstores
Figure 165: Spain: Attitudes to shopping for beauty products by where they shop, November 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
UK
 OVERVIEW
What you need to know
Products covered in this Report
 EXECUTIVE SUMMARY
The market
BPC market grows 0.4% in 2016
Figure 166: 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
Figure 167: 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
Figure 168: 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
Figure 169: Beauty products bought in the last 12 months, October 2016
Consumers trade up for fragrance
Figure 170: Brand types bought for beauty products, October 2016
Specialists are the preferred retailer
Figure 171: Where consumers purchase beauty products, by retailer, October 2016
Loyalty rewards could be more personal
Figure 172: Key drivers of overall satisfaction with beauty retailer used most often to purchase in-store, January 2017
Demand for try-before-you-buy samples
Figure 173: 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
Figure 174: Attitudes towards purchasing beauty, October 2016
What we think
 ISSUES AND INSIGHTS
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
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
BPC market grows 0.4% in 2016
Figure 175: Market size and forecast: consumer spending on all beauty and personal care products (including VAT), 2011-21
Spending to top £11 billion by 2021
Figure 176: 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
Figure 177: Alternative market scenarios for the post-Brexit clothing and accessories market, at current prices, 2016-21
Figure 178: Detailed Post-Brexit scenarios for the clothing and accessories market, at current prices, 2016-21
 MARKET SEGMENTATION
Beauty products: segment forecast
Figure 179: Consumer spending on beauty products, 2011-21
Figure 180: Consumer spending on beauty products, 2011-21
Beauty category performance
Figure 181: 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
Figure 182: Consumer spending on personal care products, 2011-21
Figure 183: Consumer spending on personal care products, 2011-21
Consumer spending on personal care items
Figure 184: Total consumer spending on personal care items (including VAT), 2011-15
Forecast methodology
 SECTOR SIZE AND FORECAST
Health and beauty specialists’ sales
Figure 185: Health and beauty specialists’ sales (including VAT), 2011-21
Figure 186: 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
Figure 187: Annual growth in specialists’ sector sales and annual growth in spending on beauty and personal care products, 2017-21 (fore)
Outlet and enterprise numbers
Figure 188: Health and beauty specialists: Outlet numbers, 2012-16
Figure 189: Health and beauty specialists: Enterprise numbers, 2012-16
 MARKET DRIVERS
Youth population in decline
Figure 190: Trends in the age structure of the UK population, 2011-21
Opportunity for mature shoppers to be better represented
Consumer financial sentiment remains positive
Figure 191: How consumers describe their financial situation, November 2016
Brexit could lead to a return to the ‘lipstick index’
Prestige beauty bought as a treat
Figure 192: Reasons for choosing premium brands over mass, by gender, October 2016
 THE CONSUMER – WHAT YOU NEED TO KNOW
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
Facial skincare most purchased category
Figure 193: Beauty products bought in the last 12 months, October 2016
Fragrance popular among all demographics
Older men the least engaged with skincare
Figure 194: Beauty products bought in the last 12 months among men, by age, October 2016
Young men prioritise facial skincare
 BRAND TYPES BOUGHT
Consumers trade up for fragrance
Figure 195: Brand types bought for beauty products, October 2016
Mass-market skincare brands preferred
More money spent on mass-market brands
 RETAILERS PURCHASED FROM
Specialists are the preferred retailer
Figure 196: Where consumers purchase beauty products, by retailer type, October 2016
Boots retains its dominant position
Figure 197: 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
Figure 198: Where consumers purchase beauty products in-store or online, by gender, October 2016
Amazon attracts the most online
Figure 199: Where consumers purchase beauty products, in-store or online, October 2016
Repertoire analysis
Figure 200: Repertoire of retailers used for purchasing beauty products in the last 12 months, October 2016
 CUSTOMER SATISFACTION
Overall satisfaction levels high
Figure 201: Satisfaction with the retailer shopped at most often for beauty products, October 2016
Key drivers analysis
Loyalty rewards could be more personal
Figure 202: 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
Figure 203: Overall satisfaction with beauty retailers used most often to purchase in-store - Key driver output, January 2017
 SATISFACTION BY RETAILER
Boots’ staff expertise sets it apart
Figure 204: 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
Figure 205: 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
Figure 206: Satisfaction of customers who purchase beauty products from Tesco most often, in relation to the overall average, October 2016
 FACTORS TO ENCOURAGE ONLINE PURCHASES
Demand for try-before-you-buy samples
Figure 207: 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
Demand for natural beauty boosted by clean-eating trend
Figure 208: Attitudes towards purchasing beauty, October 2016
Environmental concerns heighten
Opportunity for more diverse beauty collaborators
Stores the preference for discovering new beauty products
Figure 209: Attitudes towards purchasing beauty, October 2016
Technology to boost the in-store experience
 KEY PLAYERS – WHAT YOU NEED TO KNOW
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
Highly fragmented market
Figure 210: Leading specialist and non-specialist retailers: Estimated market shares, 2015
Figure 211: Leading specialist and non-specialist retailers: Estimated market shares, 2013-15
Note on market shares
 LEADING SPECIALIST RETAILERS
Superdrug growing despite maturity
Boots lacks a compelling online offer
Prestige beauty retailers outperform
Leading specialists by sales
Figure 212: Leading specialist retailers: Net revenues (excluding VAT), 2011-15
Leading pharmacies by sales
Figure 213: Leading pharmacy chains: Net revenues (excluding VAT), 2011-15
Outlet numbers and sales per outlet
Figure 214: Leading specialist retailers: Outlet numbers, 2011-15
Figure 215: Leading specialist retailers: Annual sales per outlet (excluding VAT), 2011-15
Operating profits and margins
Figure 216: Leading specialist retailers: Operating profits, 2011-15
Figure 217: Leading specialist retailers: Operating margins, 2011-15
 LEADING NON-SPECIALIST RETAILERS
Discount grocers continue in strength
Figure 218: Leading non-specialist retailers: Estimated sales growth by segment, 2015
Leading non-specialists: Estimated beauty revenues
Figure 219: Leading non-specialist retailers: Estimated beauty and personal care goods sales (excluding VAT), 2013-15
The supermarkets
Figure 220: Leading grocers: Health and beauty space allocation estimates, October 2016
The discounters
Figure 221: Leading mixed goods discounters: Health and beauty space allocation estimates, August 2016
The department stores
Figure 222: Leading department stores: Health and beauty space allocation estimates, March 2016
QVC launches Beauty iQ
 SPACE ALLOCATION SUMMARY
Figure 223: 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
Figure 224: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2016
Figure 225: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2016
 CHANNELS TO MARKET
Specialists struggle to grow share
Aldi and Lidl gain share
Figure 226: Estimated distribution of spending on beauty and personal care products, 2016
Department stores drive value growth
Figure 227: Estimated distribution of spending on beauty and personal care products, in percentage and value terms (including VAT), 2015 and 2016
 ONLINE
Online BPC market forecast to grow 8.8% in 2017
Figure 228: Estimated online consumer spending on BPC products, 2011-17
The specialists gain momentum online
Figure 229: Retailer shares of online sales of BPC products, 2014-16
 LAUNCH ACTIVITY AND INNOVATION
Estée Lauder targets Millennials with new London store
Figure 230: The Estée Edit, Carnaby Street 2016
Department stores improve beauty experience instore
Figure 231: Harvey Nichols Beauty Lounge, 2016
The rise of magic mirrors
Personalising the online experience
Figure 232: Feel Unique Platinum, 2016
Try before you buy gets a digital make-over
Figure 233: 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
Figure 234: 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
Figure 235: WAH London Soho Store, 2016
The Good Ship Benefit
 ADVERTISING AND MARKETING ACTIVITY
Product category advertising spend up 14% in 2015
Figure 236: 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
Figure 237: 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
What you need to know
Brand map
Figure 238: Attitudes towards and usage of selected brands, December 2016
Key brand metrics
Figure 239: Key metrics for selected brands, December 2016
Brand attitudes: Superdrug offers value for money
Figure 240: Attitudes, by brand, December 2016
Brand personality: The Body Shop retains its ethical reputation
Figure 241: Brand personality – Macro image, December 2016
Boots has a reliable and welcoming image
Figure 242: Brand personality – Micro image, December 2016
Brand analysis
Boots has an opportunity to boost appeal amongst men
Figure 243: User profile of Boots, December 2016
Superdrug benefits from a reputation of reliability
Figure 244: User profile of Superdrug, December 2016
Lush attracts young consumers with its trendsetting image
Figure 245: User profile of Lush, December 2016
The Perfume Shop struggles to differentiate itself
Figure 246: User profile of The Perfume Shop, December 2016
Space NK proves popular with older Millennials
Figure 247: User profile of Space NK, December 2016
The Body Shop’s ethics set it apart
Figure 248: User profile of The Body Shop, December 2016
The Fragrance Shop needs to increase engagement
Figure 249: User profile of The Fragrance Shop, December 2016
Avon’s tired brand image fails to attract young shoppers
Figure 250: User profile of Avon, December 2016
ACQUA & SAPONE
What we think
Product assortment and widespread distribution
dm-drogerie markt’s planned Italy launch will boost competition
Online site rich in content, but missing out on online sales
Company background
Company performance
Figure 251: Acqua & Sapone: Estimated group sales performance, 2012-16
Figure 252: Acqua & Sapone: Estimated outlet data, 2012-16
Retail offering
A. S. WATSON (EUROPE)
What we think
Solid performance
Service
New outlets
Marionnaud
Company background
Marionnaud
Company performance
Figure 253: A. S. Watson (Europe): Group financial performance, 2011-15
Figure 254: A. S. Watson (Europe): Outlet data, 2011-15
Retail offering
Continental Europe
UK
THE BODY SHOP
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
Figure 255: The Body Shop: Retail and consolidated sales, 2011-15
Figure 256: The Body Shop: Estimated UK sales performance, 2011-15
Figure 257: The Body Shop: Estimated outlet data, 2011-15
Retail offering
CLAREL (DIA)
What we think
A good start
Where next
Company background
Company performance
Figure 258: Dia: Group financial performance, 2011-15
Figure 259: Dia: Outlet data, 2011-15
Retail offering
DEBENHAMS
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
Figure 260: Debenhams: Group financial performance, 2011/12-2015/16
Figure 261: Debenhams: Outlet data, 2011/12-2015/16
Retail offering
DM-DROGERIE MARKT
What we think
Renovating the store estate
Online development
Utilising social media to attract younger shoppers
Company background
Company performance
Figure 262: dm-drogerie markt: Group sales performance, excl tax, 2011/12-2015/16
Figure 263: dm-drogerie markt: Outlet data, 2011/12-2015/16
Retail offering
DOUGLAS GROUP
What we think
Perfumes and fragrances market under pressure
E-commerce growth
Private label expansion
Exclusive brands on the rise
New store formats
Growth through acquisitions and store openings
Professional beauty potential
Company background
Company performance
Figure 264: Douglas Group: Group financial performance, 2011/12-2015/16
Figure 265: Douglas Group: Outlet data, 2011/12-2015/16
Retail offering
THE FRAGRANCE SHOP
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
Figure 266: The Fragrance Shop: Group financial performance, 2011/12-2015/16
Figure 267: The Fragrance Shop: Outlet data, 2011/12-2015/16
Retail offering
HOUSE OF FRASER
What we think
Senior management departures
Beauty to be targeted in 2017
Company background
Company performance
Figure 268: House of Fraser Plc: Group financial performance, 2011/12-2015/16
Figure 269: House of Fraser Plc: Outlet data, 2011/12-2015/16
Retail offering
JOHN LEWIS
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
Figure 270: John Lewis Plc (department store): Group financial performance, 2011/12-2015/16
Figure 271: John Lewis Plc (department store): Outlet data, 2011/12-2015/16
Retail offering
KIKO MILANO
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
Figure 272: Kiko Milano: Group sales performance, 2011-16
Figure 273: Kiko Milano: Estimated outlet data, 2011-16
Retail offering
LUSH RETAIL
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
Figure 274: Lush Retail Ltd: Group financial performance, 2010/11-2014/15
Figure 275: Lush Retail Ltd: Outlet data, 2010/11-2014/15
Retail offering
MüLLER
What we think
More than a just a drugstore
Alnatura deal bolsters Müller’s natural credentials
Everyday low prices to fight off competition from discounters
Multichannel offering
Company background
Company performance
Figure 276: Müller: Group sales performance, 2011/12-2015/16
Figure 277: Müller: Outlet data and estimated sales per outlet, 2011/12-2015/16
Retail offering
ROSSMANN
What we think
Store development
Modernisation
E-commerce opportunities
The chance to make a quantum leap
Company background
Company performance
Figure 278: Rossmann: Group sales performance, 2012-16
Figure 279: Rossmann: Outlet data, 2012-16
Retail offering
SEPHORA
What we think
Revolutionising the beauty shopping experience…
…store concepts
…virtual and augmented reality
…mobile
Beauty-to-go
A new way to shop Sephora
New social media reward and mobile messaging e-gifting scheme
Company background
Company performance
Figure 280: LVMH: Selective Retailing sales and estimated Sephora retail sales, 2011-15
Figure 281: Sephora: Outlet data, 2011-15
Retail offering
WALGREENS BOOTS ALLIANCE
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
Figure 282: Walgreens Boots Alliance: Group financial performance, 2011/12-2015/16
Figure 283: Walgreens Boots Alliance: Outlet data, 2011/12-2015/16
Retail offering
YVES ROCHER
What we think
Natural beauty
Environmentally-friendly option
New app bridging the online and offline experience
New experienced-based retail concept rolled out across more stores
Company background
Company performance
Figure 284: Rocher Groupe: Estimated group sales performance, 2011-15
Figure 285: Rocher Groupe: Estimated outlet data, 2011-15
Retail offering