Beauty and Personal Care Retailing - Europe - January 2018

OVERVIEW
Areas covered in this report
Consumer research
 TECHNICAL NOTES
National statistics data
Retail sector sizes
Financial definitions
Abbreviations
VAT rates
Figure 1: VAT rates around Europe, 2013-18
EXECUTIVE SUMMARY – EUROPE – THE MARKET
 THE MARKET
Sector size and forecast
Figure 2: Europe: health and beauty specialists, sales, excl. VAT, 2013-17
Figure 3: Europe: health and beauty specialists, forecast sales, excl. VAT, 2018-22
Figure 4: Europe: beauty and personal care specialists, sales, 2013-17
Figure 5: Europe: beauty and personal care specialists, forecast sales, 2018-22
BPC specialists market size
Figure 6: Europe: estimated beauty and personal care specialists, market size, 2013-17
Spending on personal care goods and services
Figure 7: Europe: consumer spending on health and beauty products and services, 2012-16
Inflation
Figure 8: Europe: inflation in personal care goods and services, annual % change, 2013-17
Figure 9: Europe: inflation: all items and personal care, annual % change, 2017*
 LEADING SPECIALISTS
Sales
Figure 10: Europe: top 20 beauty and personal care specialists, sales 2014/15-2017/18
Outlets
Figure 11: Europe: top 20 beauty and personal care specialists, outlets 2014/15-2017/18
Sales per outlet
Figure 12: Europe: top 20 beauty and personal care specialists, sales per outlet, 2014/15-2017/18
Market shares
Figure 13: Europe: top 20 beauty and personal care specialists’ shares of all health & beauty retailers’ sales, 2014-17
 WHAT WE THINK
Demand holding up well
But what sort of retailers do customers want?
Online growing, but slowly
Stores should have an advantage
Opportunities in own brands
A changing retail scene
EXECUTIVE SUMMARY – EUROPE – THE CONSUMER
What they bought
Figure 14: Europe: products purchased by country, November 2017
In-store vs online
Figure 15: Europe: in-store vs online buyers of beauty and personal care products, November 2017
Where they shop
Figure 16: Europe: type of retailer used to buy beauty and personal care products, November 2017
Online pureplayers
Figure 17: Europe: usage of online pureplayers, Amazon vs the rest, November 2017
Attitudes to buying beauty and personal care products
Figure 18: Europe: those who agree with selected attitude statements to beauty retailing, November 2017
Figure 19: Europe: ranking of level of agreement with attitude statements, November 2017
EXECUTIVE SUMMARY – EUROPE – LAUNCH ACTIVITY AND INNOVATION
Douglas makes shopping online easier
Essence get personal with new pop-up dedicated to customisation
L’Occitane rolls out new immersive store concept
Figure 20: L'Occitane Paris, 2017
Sephora also investing in “connected” store experiences
Figure 21: Sephora, Spain 2017
Major retailers reiterate ethical and sustainable ties
Brands tap into the Popscape trend
Estée Lauder continues to roll out publishing initiative
Kiehl’s and Kiko celebrate milestone anniversaries in Italy
Department stores up the ante on beauty
Fashion retailers eye growth in the beauty market
UK
 OVERVIEW
What you need to know
Products covered in this Report
 EXECUTIVE SUMMARY
The market
Consumer spending on BPC items continues to rise
Figure 22: Market size and forecast for consumer spending on beauty and personal care products (including VAT), 2012-22
Health and beauty specialists outperforming the market
Figure 23: Health and beauty specialists’ sales (including VAT), 2012-22
Rising inflation puts pressure on UK consumers
Figure 24: Real wage growth – Average weekly earnings vs inflation, January 2014-October 2017
An ageing population threatens growth in the market
Companies and brands
Specialist retailers strengthen position in the BPC market
Figure 25: Estimated distribution of spending on beauty and personal care products, 2017
Boots continues to struggle, whilst Superdrug excels
Market leaders struggle to grow market share
Online sales forecast to reach £1.4 billion by 2022
Beauty retailers investing in store experience
Advertising expenditure thought to have fallen in 2017
Boots and Superdrug benefit from high levels of trust
Figure 26: Attitudes towards and usage of selected brands, November 2017
The consumer
Most consumers shop for beauty or personal care
Figure 27: Beauty and personal care products purchased, October 2017
Tendency for trading up in the fragrance market is high
Figure 28: Beauty and personal care brand types purchased, October 2017
In-store remains the preferred channel for BPC shoppers
Figure 29: How beauty and personal care products were purchased, October 2017
Supermarkets most used retailer, but specialists capture higher-spending customers
Figure 30: Where beauty and personal care products were purchased, October 2017
Low prices are a priority, but brands are important too
Figure 31: Important factors when buying beauty and personal care products, October 2017
More product recommendations wanted online
Figure 32: Interest in online innovations, October 2017
In-store food and drink facilities are most popular when shopping for beauty and personal care
Figure 33: Interest in in-store innovations, October 2017
Most consumers want to browse without help from store staff
Figure 34: Attitudes towards buying beauty and personal care, October 2017
What we think
 ISSUES AND INSIGHTS
Smaller, niche specialists gain momentum
The facts
The implications
Downward pressure on pricing continues
The facts
The implications
The best way to capture today’s beauty consumer
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
BPC market grows 1.4% in 2017
Beauty continues to outperform personal care
Sales through specialists forecast to rise 3.6% in 2018
Pressure on UK consumer incomes
Retailers need to respond to an ageing population
Beauty trends shaping the market
 MARKET SIZE AND FORECAST
Sales of beauty and personal care set to reach £10.1 billion
Figure 35: Market size and forecast for consumer spending on beauty and personal care products (including VAT), 2012-22
Figure 36: Market size and forecast for consumer spending on beauty and personal care products (including VAT), at current and constant prices, 2012-22
Forecast methodology
 MARKET SEGMENTATION
Beauty continues to see strong growth
Figure 37: Market size and forecast for consumer spending on beauty products (including VAT), 2012-22
Figure 38: Market size and forecast for consumer spending on beauty products (including VAT), at current and constant prices, 2012-22
Beauty category performance
Figure 39: Consumer spending on beauty products (including VAT), by category, 2015-17
Colour cosmetics
Fragrances
Facial skincare
Body, hand and footcare
Personal care market less robust
Figure 40: Market size and forecast for consumer spending on personal care products (including VAT), 2012-22
Figure 41: Market size and forecast for consumer spending on personal care products (including VAT), at current and constant prices, 2012-22
Personal care category performance
Figure 42: Consumer spending on personal care products (including VAT), by category, 2015-17
Haircare
Oral hygiene
Soap, bath and shower
Shaving and hair removal
Deodorants and body spray
Suncare
Hair colourants
ONS consumer spending on personal care items
Figure 43: Total consumer spending on personal care items (including VAT), 2012-16
Forecast methodology
 SECTOR SIZE AND FORECAST
BPC specialists performing well
Figure 44: Health and beauty specialists’ sales (including VAT), 2012-22
Figure 45: Health and beauty specialists’ sales (including VAT), at current and constant prices, 2012-22
Notes on Mintel’s sector size
Outlet and enterprise numbers
Figure 46: Health and beauty specialists’ outlet numbers, 2013-17
Figure 47: Health and beauty specialists’ enterprise numbers, 2013-17
Forecast methodology
 MARKET DRIVERS
Consumer spending power under pressure…
Figure 48: Real wage growth – Average weekly earnings vs inflation, January 2014-October 2017
…but personal care inflation remains low
Figure 49: Annual percentage change in consumer prices, October 2016-October 2017
A decline in consumer confidence
Figure 50: Consumers’ future financial confidence, January 2009-October 2017
Priorities in disposable income
Figure 51: Trends in what extra money is spent on, October 2017
Changes in the structure of the UK population
Figure 52: Trends in the age structure of the UK population, 2016-26
Figure 53: Trends in the age structure of the UK population, 2016-26
Consumers spending more online
Figure 54: Online purchasing levels in the past year, by age, May 2017
Make-up trends boosting sales
Figure 55: Usage and interest in make-up trends, March 2017
Sources of beauty information
Figure 56: Sources of information, March 2017
Changes in women’s facial skincare routines
Figure 57: Behavioural changes amongst female facial skincare users in the last 12 months, March 2017
Changes in men’s skincare regimes
Figure 58: Behavioural changes amongst male facial skincare users in the last 12 months, March 2017
Natural hair trends impact the market
Figure 59: Changes in hair washing habits in the last 12 months, November 2016
 COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Beauty specialists and supermarkets continue to dominate
Boots struggling, whilst Superdrug grows
Department stores benefit from investment
Many leading retailers losing market share
Online accounting for a bigger share of total BPC spending
Innovation focused on in-store experience
Advertising spend up in 2016, but looks to have fallen in 2017
Lush differentiates itself with ethics and innovation
 CHANNELS TO MARKET
Specialists growing market share
Figure 60: Estimated distribution of spending on beauty and personal care products, 2017
Figure 61: Estimated distribution of spending on beauty and personal care products (including VAT), 2015-17
 LEADING SPECIALISTS
Robust growth sustained at Superdrug
Boots continues to struggle
Kiko Milano sales up as expansion continues
Leading specialists by sales
Figure 62: Leading specialist retailers’ net revenues (excluding VAT), 2012-16
Online retailers strengthening position
Figure 63: Leading online/home shopping specialist retailers’ net revenues (excluding VAT), 2012-16
Leading pharmacies by sales
Figure 64: Leading pharmacy chains’ net revenues (excluding VAT), 2012-16
Outlet numbers and sales per outlet
Figure 65: Leading specialist retailers’ outlet numbers, 2012-16
Figure 66: Leading specialist retailers’ estimated sales per outlet, 2012-16
Operating profits and margins
Figure 67: Leading specialist retailers’ operating profits, 2012-16
Figure 68: Leading specialist online/home shopping retailers’ operating profits, 2012-16
Figure 69: Leading specialist retailers’ operating margins, 2012-16
Figure 70: Leading specialist online/home shopping retailers’ operating margins, 2012-16
 LEADING NON-SPECIALISTS
Department stores outperform the market
Figure 71: Leading non-specialist retailers’ estimated sales growth, by segment, 2016
Discount grocers continue to strengthen position
Figure 72: Leading non-specialist retailers’ estimated beauty and personal care goods sales (excluding VAT), 2014-16
Non-specialists’ space allocation
The supermarkets
Figure 73: Leading department stores’ estimated health and beauty space allocation, 2017
The department stores
Figure 74: Leading department stores’ estimated health and beauty space allocation, 2017
The discounters
Figure 75: Leading discounters’ estimated health and beauty space allocation, 2017
Fashion specialists disrupt the beauty market
 MARKET SHARE
Leading retailers lose market share, while smaller retailers gain
Figure 76: Leading specialist and non-specialist retailers’ estimated market shares, 2016
Figure 77: Leading specialist and non-specialist retailers’ estimated market shares, 2014-16
Note on market shares
 SPACE ALLOCATION SUMMARY
Figure 78: Leading health and beauty retailers: Health and beauty products estimated space allocation, December 2017
Boots closing photo labs, The Body Shop focusing on in-store attractions, Superdrug and Savers expanding store network
Department stores experience-led beauty shopping
Figure 79: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2017
Figure 80: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2017
Health and beauty space as a percentage of total floor space in non-specialists
Figure 81: Non-specialists: Estimated health and beauty space as a percentage of total floor space, December 2017
 ONLINE
Online beauty spending set to reach £1.2 billion in 2018
Figure 82: Estimated market size and forecast of online consumer expenditure on beauty products, 2012-22
Department stores growing share of online spending
Figure 83: Estimated retailer shares of online sales of BPC products, 2015-17
 LAUNCH ACTIVITY AND INNOVATION
Beauty masterclasses highlight expertise
Rising use of chatbots
When fashion and beauty collide
Figure 84: ASOS Make-Up, 2017
Figure 85: Boohoo Beauty, 2017
When music and beauty collide
Male grooming continues to gain momentum
Driving seasonal sales of BPC products
Bolstering reward schemes
Beauty services take centre stage
Speeding up online delivery services
London becomes the home to new flagship stores
Figure 86: L’Occitane London Flagship, 2017
Figure 87: Aēsop London flagship store, 2017
Increasing use of in-store technology
Pop-ups generate brand hype
Subscription services get a bricks-and-mortar makeover
Figure 88: Birchbox Carnaby Street Pop-up store, 2017
Tapping into the rise in veganism
The importance of personalised and inclusive beauty
Figure 89: Fenty Beauty homepage, December 2017
Moral Make-up
 ADVERTISING AND MARKETING ACTIVITY
Total beauty advertising spend decreases, but top retailers increase spend
Figure 90: Recorded above-the-line advertising expenditure on beauty and personal care, total market, 2012-16
Figure 91: Recorded above-the-line, online, display and direct mail total advertising expenditure on beauty and personal care, by leading retailers, 2014-17
Key campaigns
Boots relies on familiarity and nostalgia with Christmas 2017 campaign
Superdrug’s new direction
Figure 92: ‘That Superdrug Feeling’ campaign video still, 2017
Digital increases in importance
Figure 93: Recorded above-the-line advertising expenditure percentage on beauty and personal care, by media type, total market, 2016
Nielsen Ad Intel coverage
 BRAND RESEARCH
What you need to know
Brand map
Figure 94: Attitudes towards and usage of selected brands, November 2017
Key brand metrics
Figure 95: Key metrics for selected brands, November 2017
Brand attitudes: Boots is the most trustworthy retailer
Figure 96: Attitudes, by brand, November 2017
Brand personality: Jo Malone seen as exclusive
Figure 97: Brand personality – Macro image, November 2017
Savers has an impersonal and basic brand image
Figure 98: Brand personality – Micro image, November 2017
Brand analysis
Boots benefits from high levels of brand awareness
Figure 99: User profile of Boots, November 2017
Lush attracts a young shopper with its fun, ethical brand image
Figure 100: User profile of Lush, November 2017
Superdrug’s value pricing resonates with consumers
Figure 101: User profile of Superdrug, November 2017
Savers also benefits from its low-price proposition
Figure 102: User profile of Savers, November 2017
Jo Malone expensive but worth paying more for
Figure 103: User profile of Jo Malone, November 2017
Lookfantastic.com popular among affluent Millennials
Figure 104: User profile of lookfantastic.com, November 2017
 THE CONSUMER – WHAT YOU NEED TO KNOW
Almost all UK consumers are BPC buyers
Mass-market brands still dominate
Most still shop in-store
Supermarkets remain popular
Consumers want consistent pricing more than promotions
Strong demand for product recommendations online
The appeal of in-store beauty services
Most trade down in tough times
 WHAT THEY BUY
High levels of BPC purchasing in the UK
Figure 105: Beauty and personal care products purchased, October 2017
Deodorants and body sprays most purchased
Figure 106: Beauty and personal care products purchased, October 2017
Women still drive BPC purchasing
Figure 107: Beauty and personal care products purchased, by gender, October 2017
Young people less likely to buy personal care
Figure 108: Beauty and personal care products purchased, by age, October 2017
Young women buy a wide range of products
Figure 109: Repertoire of beauty and personal care products purchased, October 2017
 BRAND TYPES PURCHASED
Consumers willing to invest in premium fragrances
Figure 110: Beauty and personal care brand types purchased, October 2017
Encouraging higher value purchases
 HOW AND WHERE THEY SHOP
In-store remains the most popular channel
Figure 111: How beauty and personal care products were purchased, October 2017
Convenience and price attract people online
Supermarkets attract most shoppers
Figure 112: Where beauty and personal care products were purchased, October 2017
The popularity of Booth and the non-specialists further highlighted in qualitative research
Young people prefer the specialists
Figure 113: Where beauty and personal care products were purchased, by age, October 2017
Department stores popular with affluent shoppers
Figure 114: Where beauty and personal care products were purchased, by socio-economic group, October 2017
Amazon holds dominant position in online market
Figure 115: Where beauty and personal care products were purchased, October 2017
Specialists attract beauty and haircare shoppers
Figure 116: Where beauty and personal care products were purchased, by products purchased, October 2017
Repertoire
Figure 117: Repertoire of where beauty and personal care products were purchased, October 2017
 IMPORTANT FACTORS
Demand for consistent pricing
Figure 118: Important factors when buying beauty and personal care products, October 2017
Women more drawn in by promotions
Figure 119: Important factors when buying beauty and personal care products, by gender, October 2017
Perceptions of Boots 3 for 2 promotions resoundingly positive
Brand selection important to young consumers
Figure 120: Important factors when buying beauty and personal care products, by age and income, October 2017
Make-up buyers most interested in loyalty schemes
Figure 121: Important factors when buying beauty and personal care products, by products purchased, October 2017
Department stores need knowledgeable staff
Figure 122: Important factors when buying beauty and personal care products, by retailer used, October 2017
Brand ethics aren’t a priority
 INTEREST IN ONLINE INNOVATIONS
Personalised recommendations most likely to resonate
Figure 123: Interest in online innovations, October 2017
Women show more interest in online innovations
Figure 124: Interest in online innovations, by gender, October 2017
Subscription services tap into older Millennials
Figure 125: Interest in online innovations, by age, October 2017
Affluent want to see more online tutorials
Figure 126: Interest in online innovations, by socio-economic status, October 2017
Interest in buying via social media peaks among those who buy electrical BPC devices
Figure 127: Interest in online innovations, by products purchased, October 2017
 INTEREST IN IN-STORE INNOVATIONS
Demand for in-store facial treatments high
Figure 128: Interest in in-store innovations, October 2017
Women want a range of beauty services in-store
Figure 129: Interest in in-store innovations, by gender, October 2017
Young shoppers most engaged with in-store innovation
Figure 130: Interest in in-store innovations, by age, October 2017
Innovations also show higher appeal among affluent
Figure 131: Interest in in-store innovations, by age, October 2017
Toiletries shoppers show little interest in store experience
Figure 132: Interest in in-store innovations, by products purchased, October 2017
 ATTITUDES TOWARDS BUYING BEAUTY AND PERSONAL CARE
Most don’t want staff interaction
Figure 133: Attitudes towards buying beauty and personal care, October 2017
Incentives to purchase capture female shoppers
Figure 134: Attitudes towards buying beauty and personal care, by gender, October 2017
Two thirds of 16-24s research online ahead of purchase
Figure 135: Attitudes towards buying beauty and personal care, by age, October 2017
Less affluent more overwhelmed by choice
Figure 136: Attitudes towards buying beauty and personal care, by socio-economic status, October 2017
Millennials unsatisfied with recommendations
Figure 137: Attitudes towards buying beauty and personal care, by age, October 2017
The lack of trust in store staff confirmed by qualitative research
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
 APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
FRANCE
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Figure 138: France: consumer spending on personal care goods, 2012-17
Sector size and forecast
Channels of distribution
Figure 139: France: estimated channels of distribution for spending on beauty and personal care goods, 2016
Companies and brands
Key metrics
Market shares
Figure 140: France: leading specialists’ shares of all beauty specialists’ sales, 2016
Online
The consumer
Beauty and personal care products purchased
Figure 141: France: BPC products purchased in the last 12 months – broad categories, November 2017
Online and in-store shopping
Figure 142: France: how beauty and personal care products were purchased, online vs in-store, November 2017
Where they shop
Figure 143: France: where beauty and personal care products were purchased, November 2017
Attitudes to buying beauty and personal care
Figure 144: France: attitudes to buying beauty and personal care, November 2017
What we think
 ISSUES AND INSIGHTS
How can beauty specialists adapt to changing shopping behaviour?
The facts
The implications
Is ethical BPC gaining momentum?
The issues
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Economy picks up speed after prolonged period of subdued growth
BPC, a low growth market
BPC retailers doing well
Deflation holding back spending growth
Grocers and specialist chains are the main channels
 CONSUMER SPENDING
Signs of growth in the French economy
Beauty and personal care, a low growth market
Figure 145: France: consumer spending on beauty and personal care (incl. VAT), 2012-17
 PRODUCT MARKET BREAKDOWN
Figure 146: France: main beauty and personal care markets, spending (incl. VAT), 2012-17
Figure 147: France: main beauty and personal care markets, forecast spending (incl. VAT), 2018-21
 SECTOR SIZE AND FORECAST
Total retail sales recovering, further growth forecast in 2017
Beauty retailers’ sales accelerating
Figure 148: France: health & beauty specialists, sales (excl. VAT), 2012-17
Figure 149: France: health & beauty specialists, forecast sales (excl. VAT), 2017-22
 INFLATION
Figure 150: France: consumer prices * of personal care items, annual % change, 2012-16
Figure 151: France: consumer price inflation (HICP *) on personal care products and services, annual % change, January 2016-October 2017
 CHANNELS OF DISTRIBUTION
Figure 152: France: where beauty and personal care products were purchased, France, November 2017
Grocers dominate, especially at lower end of the market
Pharmacies and parapharmacies significant
Department stores in the premium space
Figure 153: France: estimated channels of distribution for spending on beauty and personal care goods, 2016
 COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Specialists are thriving
Sephora leads
Leading groups generate three quarters of sector sales
BPC not well suited to buying online
 LEADING PLAYERS
Sephora benefitting from digital developments
Marionnaud struggling
Passion Beauté goes online
Beauty brands are opening their own dedicated stores
L’Occitane
Figure 154: France: leading beauty specialists, sales, 2013-17
Figure 155: France: leading beauty specialists, outlets, 2013-17
Figure 156: France: leading beauty specialists, sales per outlet, 2013-17
 MARKET SHARES
Figure 157: France: leading specialists’ shares of all beauty specialists’ sales, 2013-16
 ONLINE
Online activity
Shopping online
Figure 158: France: online buyers in last 12 months in key sectors, 2011-17
Online sales
Leading online players
Figure 159: France: beauty retailers: transactional websites, December 2016
Social media usage
A quarter have viewed beauty content
Figure 160: France: consumers that have seen beauty-related content on social media in the last six months, 2017
 THE CONSUMER – WHAT YOU NEED TO KNOW
BPC, a partly non-discretionary market
Women shopping more online
In-store wins for the experience
Online primarily for repeat purchasing
Electricals the most popular category bought online
Grocers the dominant channel
Samples and free gifts are popular
Provenance an important concern
Help me to choose
 BEAUTY AND PERSONAL CARE PRODUCTS PURCHASED
Partly non-discretionary
Figure 161: France: beauty and personal care products bought in the last 12 months – broad categories, November 2017
Male beauty a growth area
Figure 162: France: beauty and personal care products bought in the last 12 months – detailed categories, November 2017
Older men buy most
Figure 163: France: beauty and personal care products bought in the last 12 months by men, November 2017
 ONLINE AND IN-STORE SHOPPING FOR BEAUTY AND PERSONAL CARE PRODUCTS
Women shopping more online
In-store wins for the experience
Online primarily for repeat purchasing
Figure 164: France: in-store vs online shoppers for beauty and personal care products, November 2017
Figure 165: France: online beauty and personal care shoppers, November 2017
Figure 166: France: beauty and personal care products bought in the last 12 months, in-store vs online, November 2017
 WHERE BEAUTY AND PERSONAL CARE PRODUCTS ARE PURCHASED
Figure 167: France: where beauty and personal care products were purchased, November 2017
Men more likely to grab-and-go while women seek options
Figure 168: France: where beauty and personal care products were purchased, by gender, November 2017
Where people shopped and what they bought
What consumers bought from the specialists
Figure 169: France: where beauty and personal care products were purchased, by where they shopped, November 2017
What consumers bought from the non-specialists
Figure 170: France: where beauty and personal care products were purchased, by where they shopped, November 2017
Customer profiles
Figure 171: France: usage of retailers for buying beauty and personal care products, by average age and income, November 2017
 ATTITUDES TO BUYING BEAUTY AND PERSONAL CARE PRODUCTS
Freebies please…..
Provenance an important concern
Help me to choose
Figure 172: France: attitudes to buying beauty and personal care products, November 2017
Attitudes to buying beauty and personal care products by shops used
Figure 173: France: attitudes to buying BPC products by retailers used, November 2017
 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 174: Germany: spending on personal care products as % all consumer spending 2011-17
Figure 175: Germany: consumer price inflation on personal care products and services, annual % change, January 2016-November 2017
Sector size and forecast
Figure 176: Germany: cosmetics and perfumery retailers’ sales as % all non-food retailers’ sales, 2012-17
Channels of distribution
Figure 177: Germany: estimated channels of distribution for beauty and personal care products, 2017
Companies and brands
Drugstores dominant
Market shares
Figure 178: Germany leading specialists’ shares of all cosmetics and perfumery specialists’ sales, 2017
Online
The consumer
Beauty and personal care products purchased
Figure 179: Germany: BPC products bought in the last 12 months, November 2017
Online and in-store shopping for beauty and personal care products
Figure 180: Germany: in-store vs online shoppers for beauty and personal care products, November 2017
Where beauty and personal care products are purchased
Figure 181: Germany: where beauty and personal care products were purchased, November 2017
Attitudes to buying beauty and personal care products
Figure 182: Germany: attitudes to buying beauty and personal care products, November 2017
What we think
 ISSUES AND INSIGHTS
Is there a crisis building in the drugstore sector?
The facts
What it means
Just how big a challenge is online?
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Personal care spending losing share of all spending
Signs that the drugstore sector is going ex-growth
Inflation above average
Drugstores by far the biggest players
 CONSUMER SPENDING
Figure 183: Germany: consumer spending on beauty and personal care (incl. VAT), 2012-17
 PRODUCT MARKET BREAKDOWN
Figure 184: Germany: main beauty and personal care markets, spending (incl. VAT) 2012-17
Figure 185: Germany: main beauty and personal care markets, forecast spending (incl. VAT) 2018-21
 SECTOR SIZE AND FORECAST
Drugstores gaining share
Figure 186: Germany: health & beauty specialists, sales (excl. VAT), 2012-17
Figure 187: Germany: health & beauty specialists, sales forecasts, excl. VAT, 2018-22
 INFLATION
Figure 188: Germany: consumer prices of personal care items, annual % change, 2012-17
Figure 189: Germany: consumer price inflation on personal care products and services, annual % change, January 2016-November 2017
 CHANNELS OF DISTRIBUTION
Specialists dominant
Department stores struggling
Supermarkets not a major force
Online and other non-store
Figure 190: Germany: estimated channels of distribution for spending on beauty and personal care products, 2017
 COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Drugstores dominant
Three retailers share 85% of the market
Online takes 7% of the market
 LEADING PLAYERS
Drugstores dominant
Specialists growing as well.
Figure 191: Germany: leading beauty specialists, sales, excl. VAT, 2013-17
Figure 192: Germany: leading beauty specialists, outlets, 2013-17
Figure 193: Germany: leading beauty specialists, sales per outlet, 2013-17
 MARKET SHARES
Figure 194: Germany: leading specialists’ shares of all beauty and personal care specialists’ sales, 2013-17
 ONLINE
Online usage
Shopping online
Figure 195: Germany: online buyers in last 12 months in key sectors, 2011-17
Online sales and leading online players
 THE CONSUMER – WHAT YOU NEED TO KNOW
Almost everyone beauty and personal care products
Almost all purchasers buy at least something instore.
Drugstores the most used retailers
Attitudes to buying beauty and personal care products
 BEAUTY AND PERSONAL CARE PRODUCTS PURCHASED
Beauty and personal care products widely bought.
Figure 196: Germany: BPC products bought in the last 12 months, November 2017
Figure 197: Germany: BPC products bought in the last 12 months, by gender, November 2017
 ONLINE AND IN-STORE SHOPPING FOR BEAUTY AND PERSONAL CARE PRODUCTS
Figure 198: Germany: in-store vs online shoppers for beauty and personal care products, November 2017
Figure 199: Germany: profile of online and in-store buyers of beauty and personal care products, November 2017
 WHERE BEAUTY AND PERSONAL CARE PRODUCTS ARE PURCHASED
Figure 200: Germany: where beauty and personal care products were purchased, November 2017
Customer profiles
Figure 201: Germany: usage of retailers for buying beauty and personal care products, by average age and income, November 2017
Where people shopped and what they bought
Products and drugstores
Figure 202: Germany: purchasers of BPC products by drugstores and specialists, November 2017
Products and other retailers
Figure 203: Germany: purchasers of BPC products by food retailer, department store and pharmacies, November 2017
 ATTITUDES TO BUYING BEAUTY AND PERSONAL CARE PRODUCTS
Figure 204: Germany: attitudes to shopping for beauty products, November 2017
Figure 205: Germany: profile of those agreeing with the attitude statements, November 2017
Attitudes to buying beauty and personal care products by shops used
Figure 206: Germany: attitudes to buying beauty products by retailers used, November 2017
 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
Consumer spending
Figure 207: Italy: annual percentage change in total consumer spending and consumer spending on personal care, 2012-17
Inflation
Figure 208: Italy: consumer price inflation on all items and personal care products and services, annual % change, January 2016-November 2017
Sector size and forecast
Figure 209: Italy: annual percentage change in retail sales, by sector, 2012-17
Channels of distribution
Figure 210: Italy: estimated channels of distribution for beauty and personal care products, 2017
Leading players
Key metrics
Market shares
Figure 211: Italy: leading BPC specialists’ estimated shares of all consumer spending on personal care goods, 2017
Online
The consumer
Beauty and personal care products purchased
Figure 212: Italy: beauty and personal care products purchased in the last 12 months, November 2017
Online and in-store shopping
Figure 213: Italy: how beauty and personal care products were purchased, online vs in-store, November 2017
Where they shop
Figure 214: Italy: where beauty and personal care products were purchased, November 2017
Attitudes to buying beauty and personal care
Figure 215: Italy: attitudes to buying beauty and personal care products, November 2017
What we think
 ISSUES AND INSIGHTS
An increasingly competitive BPC market
The facts
The implications
Giving customers the right shopping experience
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Consumer spending on personal care continues to rise
Beauty products drive growth in the BPC market
Retail sales through specialists see robust growth
Low inflation in the personal care sector sustained
Grocers capture 25% of spending on personal care items
 CONSUMER SPENDING
Ongoing weakness in Italy’s economy
Personal care maintains share of all spending
Figure 216: Italy: consumer spending on beauty and personal care (incl. VAT), 2012-17
 PRODUCT MARKET BREAKDOWN
Beauty categories outperforming personal care
Figure 217: Italy: main beauty and personal care markets, spending (incl. VAT) 2012-17
Figure 218: Italy: main beauty and personal care markets, forecast spending (incl. VAT) 2018-21
 SECTOR SIZE AND FORECAST
Retail sales through health & beauty specialists rise 2.6%
Figure 219: Italy: health & beauty specialists, sales (excl. VAT), 2012-17
Figure 220: Italy: health & beauty specialists, forecast sales (excl. VAT), 2017-22
 INFLATION
Consumer prices fall into deflationary terms
Figure 221: Italy: consumer prices of personal care items, annual % change, 2011-16
Personal care inflation remains stable
Figure 222: Italy: consumer price inflation on all items and personal care products and services, annual % change, January 2016-November 2017
Figure 223: Italy: breakdown of consumer price inflation on personal care products and services, annual % change, January 2016-November 2017
 CHANNELS OF DISTRIBUTION
Specialists increase share of BPC market
Figure 224: Italy: estimated channels of distribution for beauty and personal care products, 2017
Figure 225: Italy: estimated channels of distribution for beauty and personal care products, 2015-17
 COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Consistent growth amongst the Italian BPC specialists
Douglas acquisition of LLG set to disrupt the market
Leading specialists gaining market share
Rising number of Italian consumers shopping online
 LEADING PLAYERS
Acqua & Sapone rival fast approaching
Figure 226: Italy: leading beauty specialists, estimated sales, 2013-17
Wycon’s ambitious growth plans
Figure 227: Italy: leading beauty specialists, estimated outlet numbers, 2013-17
Figure 228: Italy: leading beauty specialists, estimated sales per outlet, 2013-17
 MARKET SHARES
Leading specialists increase share of Italian BPC market
Figure 229: Italy: leading BPC specialists’ estimated shares of all spending on personal care goods, 2017
Figure 230: Italy: leading beauty specialists’ estimated share of all spending on personal care goods, 2013-17
 ONLINE
Online usage
Shopping online
Figure 231: Italy: online buyers in last 12 months in key categories, 2012-17
Online sales and leading online players
Figure 232: Italy: how beauty and personal care products were purchased, online vs in-store, November 2017
Italy’s beauty retailers move online
Figure 233: Italy: beauty retailers: transactional websites, January 2018
Social media usage
Almost half have viewed beauty content
Figure 234: Italy: consumer that have seen beauty-related content on social media in the last six months, 2017
Tutorials on YouTube and Facebook most popular
Figure 235: Italy: top 5 social media activities done in relation to different beauty content creators in the last six months, 2017
The benefits of online beauty content
Figure 236: Italy: benefits from using tutorial and reviews on social media, 2017
 THE CONSUMER – WHAT YOU NEED TO KNOW
High BPC purchasing amongst Italian consumers
In-store remains primary purchasing channel
Four out five shop for BPC with a non-specialist
Consumers are overwhelmed, but don’t necessarily want help
 BEAUTY AND PERSONAL CARE PRODUCTS PURCHASED
Almost everyone buys BPC products
Figure 237: Italy: beauty and personal care purchasing in the last 12 months, November 2017
Oral hygiene most purchased category
Figure 238: Italy: beauty and personal care products purchased in the last 12 months – detailed categories, November 2017
Women more active buyers
Figure 239: Italy: beauty and personal care purchasing in the last 12 months – detailed categories, by gender, November 2017
Older shoppers take greater share of personal care purchasing
Figure 240: Italy: beauty and personal care purchasing in the last 12 months, by age, November 2017
 ONLINE AND IN-STORE SHOPPING FOR BEAUTY AND PERSONAL CARE PRODUCTS
Most still shop in-store
Figure 241: Italy: in-store vs online shoppers for beauty and personal care products, November 2017
Women more likely to shop online
Figure 242: Italy: in-store vs online shoppers for beauty and personal care products, by gender, November 2017
Online bias towards young people
Figure 243: Italy: in-store vs online shoppers for beauty and personal care products, by age, November 2017
Beauty categories most likely to be bought online
Figure 244: Italy: beauty and personal care products bought in the last 12 months, in-store vs online, November 2017
 WHERE BEAUTY AND PERSONAL CARE PRODUCTS WERE PURCHASED
The popularity of the non-specialists
Figure 245: Italy: where beauty and personal care products were purchased, November 2017
More than half shop for BPC with the grocers
Figure 246: Italy: where beauty and personal care products were purchased, November 2017
Customer profiles
Figure 247: Italy: where beauty and personal care products were purchased, by age and income, November 2017
Where people shopped and what they bought
What consumers bought from the specialists
Figure 248: Italy: BPC products purchased by retailer used, deviation from average: specialists, November 2017
What consumers bought from the non-specialists
Figure 249: Italy: BPC products purchased by retailer used, deviation from average: non-specialists, November 2017
 ATTITUDES TO BUYING BEAUTY AND PERSONAL CARE PRODUCTS
Demand for information on provenance
Figure 250: Italy: attitudes to buying beauty and personal care products, November 2017
Customer profiles by attitudes
Consumers are overwhelmed, but don’t necessarily want help
Figure 251: Italy: attitudes to buying beauty and personal care, by age and income, November 2017
 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
Consumer spending
Figure 252: Spain: annual % change in total consumer spending on beauty and personal care and total household spending, 2012-17
Sector size
Figure 253: Spain: annual % change in retail sales, 2012-17
Inflation
Figure 254: Spain: consumer price inflation on personal care products and services, annual % change, January 2016-October 2017
Channels of distribution
Figure 255: Spain:  estimated channels of distribution of spending on beauty and personal care products, 2016
Companies and brands
Key metrics
Market shares
Figure 256: Spain: leading specialists’ shares of all cosmetics and perfumery specialists’ sales, 2016/17
Online
The consumer
What they bought
Figure 257: Spain:  beauty and personal care products purchased, November 2017
In-store vs online
Figure 258: Spain:  in-store vs online shoppers for beauty and personal care products, November 2017
Where they shop
Figure 259: Spain:  where beauty and personal care products were purchased, November 2017
Attitudes to shopping for beauty and personal care
Figure 260: Spain: attitudes to shopping for BPC products, November 2017
What we think
 ISSUES AND INSIGHTS
What are the main changes we are seeing in the BPC market in Spain?
The facts
The implications
What are the opportunities for driving sales?
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Personal care spending grows
Fragrances biggest beauty category
Specialist retailers’ sales grow 3.5%
Rising inflation doesn’t impact beauty
Supermarkets and beauty specialists dominate BPC spending
 CONSUMER SPENDING
Personal care spending
Figure 261: Spain: consumer spending on beauty and selected other goods (incl. VAT), 2012-17
 PRODUCT MARKET BREAKDOWN
Figure 262: Spain: main beauty and personal care markets, spending (incl. VAT) 2012-17
Figure 263: Spain: main beauty and personal care markets, spending (incl. VAT), 2018-21
 SECTOR SIZE AND FORECAST
Figure 264: Spain: health & beauty specialists, sales (excl. VAT), 2012-17
Figure 265: Spain: health & beauty retailers sales, forecasts, excl. VAT, 2018-22
 INFLATION
Figure 266: Spain: consumer prices of personal care items, annual % change, 2012-17
Figure 267: Spain: consumer price inflation on personal care products and services, annual % change, January 2016-October 2017
 CHANNELS OF DISTRIBUTION
Figure 268: Spain:  estimated channels of distribution of spending on beauty and personal care products, 2016
Figure 269: Spain:  estimated channels of distribution of spending on beauty and personal care products, inc VAT, 2014-16
 COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Beauty market consolidates
Foreign companies expand presence
Clarel leads specialist market
Online shopping growing
 LEADING PLAYERS
Main players consolidate
Figure 270: Spain: leading beauty specialists, sales, 2013/14-2016/17
Figure 271: Spain: leading beauty specialists, outlets, 2013/14-2016/17
Figure 272: Spain: leading beauty specialists, sales per outlet, 2013/14-2016/17
 MARKET SHARES
Figure 273: Spain: leading specialists’ shares of all cosmetics and perfumery specialists' sales, 2014/15-2016/17
 ONLINE
Online activity
Shopping online
Figure 274: Spain: online buyers in last 12 months in key sectors, 2008-17
Online sales
Figure 275: Spain: online sales by product category and type of retailer, 2016
Leading online players
Figure 276: Spain: beauty retailers: transactional websites, January 2018
Pureplays grow focus on beauty
Social media
Almost half have viewed beauty content
Figure 277: Spain: consumers that have seen beauty-related content on social media in the last six months, 2017
Tutorials on YouTube and Facebook most popular
Figure 278: Spain: top 5 social media activities done in relation to different beauty content creators in the last six months, 2017
The benefits of online beauty content
Figure 279: Spain: benefits from using tutorial and reviews on social media, 2017
 THE CONSUMER – WHAT YOU NEED TO KNOW
Older women are main beauty buyers
Only 24% buy online
Supermarkets lead for buying BPC
Demand for more product transparency
 BEAUTY AND PERSONAL CARE PRODUCTS PURCHASED
Beauty and personal care products widely bought
Figure 280: Spain: beauty and personal care products purchased, November 2017
Spanish men keen buyers of fragrances
Figure 281: Spain: beauty and personal care products purchased, by gender, November 2017
Older women are main beauty buyers
Figure 282: Spain: beauty and personal care products purchased, by age group, November 2017
 ONLINE AND IN-STORE SHOPPING FOR BEAUTY AND PERSONAL CARE PRODUCTS
Only 24% buy online
Figure 283: Spain: in-store vs online shoppers for beauty and personal care products, November 2017
Women more likely to buy online
Figure 284: Spain: in-store vs online shoppers for beauty and personal care products, by gender, November 2017
Figure 285: Spain: in-store vs online shoppers for beauty and personal care products, by age group, November 2017
Make-up popular online purchase
Figure 286: Spain: beauty and personal care products bought in the last 12 months, in-store vs online, November 2017
 WHERE BEAUTY AND PERSONAL CARE PRODUCTS ARE PURCHASED
Supermarkets lead for beauty
Figure 287: Spain: where beauty and personal care products were purchased, November 2017
Sephora has youngest age profile
Figure 288: Spain: where beauty and personal care products were purchased, by age and income, November 2017
Where people shopped and what they bought
Products and drugstores
Figure 289: Spain: BPC products purchased by retailer used, deviation from average: specialists, November 2017
Figure 290: Spain: BPC products purchased by retailer used, deviation from average: non-specialists, November 2017
 ATTITUDES TO BUYING BEAUTY AND PERSONAL CARE PRODUCTS
Demand for more product transparency
Figure 291: Spain: attitudes to shopping for beauty products, November 2017
Under-35s buy cheaper products to save money
Figure 292: Spain: attitudes to shopping for beauty products, by age group, November 2017
Demand for beauty services
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
ACQUA & SAPONE
What we think
Selex and Acqua e Sapone sign agreement
Online store still underdeveloped
Company background
Company performance
Figure 293: Acqua & Sapone: estimated group sales performance, 2013-17
Figure 294: Acqua & Sapone: estimated outlet data, 2014-17
Retail offering
A. S. WATSON (EUROPE) (INC. MARIONNAUD)
What we think
Following the UK
Discounting
Service
Online
Marionnaud
Where next
Company background
Company performance
Figure 295: A. S. Watson (Europe): group financial performance, 2012-16
Figure 296: A. S. Watson (Europe): outlet data, 2012-16
Marionnaud
Figure 297: Marionnaud France: financial performance, 2012-16
Retail offering
AS Watson in Europe
Figure 298: AS Watson: operating companies in Europe, 2017
Savers
The Perfume Shop
THE BODY SHOP
What we think
Distinct USP suffered under the weight of L’Oréal ownership
Mobile-first e-commerce platform roll-out
Shop-in-shop deal with El Corte Inglés an opportunity to attract more customers
Company background
Company performance
Figure 299: The Body Shop - Retail sales: Group financial performance, 2012-16
Figure 300: The Body Shop: Estimated UK sales performance, 2012-16
Figure 301: The Body Shop - Retail Sales: Estimated outlet data, 2012-16
Retail offering
CLAREL (DIA) 
What we think
Clarel sales slow down
Own-brand range launched across Europe
Digital grows
Company background
Company performance
Figure 302: Dia: group financial performance, 2012-16
Figure 303: Dia: outlet data, 2012-16
Retail offering
DEBENHAMS
What we think
Debenhams Redesigned focuses on store experience
‘Right sizing’ of stores aims to improve profitability
Beauty at heart of Debenhams’ future plans
Beauty Club relaunch aims to strengthen relationships with customers
Blow Ltd investment helps to scale up beauty services offer
Is online running out of steam?
What next?
Company background
Company performance
Figure 304: Debenhams: Group financial performance, 2012/13-2016/17
Figure 305: Debenhams: Outlet data, 2012/13-2016/17
Retail offering
DM-DROGERIE MARKT
What we think
Online
Stores and investment
Company background
Company performance
Figure 306: dm-Drogerie Markt: group sales performance, 2012/13-2016/17
Figure 307: dm-Drogerie Markt: outlet data, 2012/13-2016/17
Retail offering
DOUGLAS GROUP
What we think
Strengthening market position in Spain and Italy
Transforming the online beauty shopping experience
Enhanced loyalty card to win new customers
In-store events to help drive footfall in German shops
Targeting men with new skincare products range and dedicated in-store spaces
Company background
Company performance
Figure 308: Douglas Group: group sales performance, 2012/13-2016/17
Figure 309: Douglas Group: estimated outlet data, 2012/13-2016/17
Retail offering
THE FRAGRANCE SHOP
What we think
New try-before-you-buy fragrance subscription service
Concession store partnership with House of Fraser
Customer feedback initiative helping drive sales
Company background
Company performance
Figure 310: The Fragrance Shop: Group financial performance, 2012/13-2016/17
Figure 311: The Fragrance Shop: Outlet data, 2012/13-2016/17
Retail offering
HOUSE OF FRASER
What we think
Beauty at the heart of sales growth
Online sales growth stutters at just the wrong time
Strong delivery proposition offers potential for differentiation
What next?
Company background
Company performance
Figure 312: House of Fraser Plc: Group financial performance, 2012/13-2016/17
Figure 313: House of Fraser Plc: Outlet data, 2012/13-2016/17
Retail offering
JOHN LEWIS (DEPARTMENT STORE)
What we think
New Oxford store points way to retail as theatre
Beauty to grow in importance
What next?
Company background
Company performance
Figure 314: John Lewis Plc (department store): Group financial performance, 2012/13-2016/17
Figure 315: John Lewis Plc (department store): Outlet data, 2012/13-2016/17
Retail offering
KIKO MILANO 
What we think
20-year celebration leads to collaboration with Vogue Italia
KikoID opens in Milan
#kikotrendsetters
New CEO
Company background
Company performance
Figure 316: Kiko Milano, Group sales performance, 2012-17
Figure 317: Kiko Milano, estimated outlet data, 2012-17
Retail offering
LUSH RETAIL 
What we think
Bigger and better shops
New app and virtual shopping assistant to boost customer experience
Expanded payment option with Bitcoin digital currency
Company background
Company performance
Figure 318: Lush Retail Ltd: Group financial performance, 2012/13-2016/17
Figure 319: Lush Retail Ltd: Outlet data, 2012/13-2016/17
Retail offering
MüLLER
What we think
Looking for sales growth opportunities outside Germany
Demand for natural cosmetics fuelling sales growth
Non-beauty offering dragging down total sales
Company background
Company performance
Figure 320: Müller: group sales performance, 2012/13-2016/17
Figure 321: Müller: outlet data and estimated sales per outlet, 2012/13-2016/17
Retail offering
ROSSMANN
What we think
Expanding own brand and exclusives to give differentiation
Using influencers to increase appeal to younger buyers
Online proves a challenge
What next?
Company background
Company performance
Figure 322: Rossmann: Group sales performance, 2013-17
Figure 323: Rossmann: Outlet data, 2013-17
Retail offering
SEPHORA 
What we think
Rihanna’s Fenty Beauty launched exclusively with Sephora
Mobile and digital offerings expanded
Small store format rolled out
New format introduced in Spain
German expansion
Company background
Company performance
Figure 324: LVMH: Selective Retailing and estimated Sephora retail sales, 2012-17
Figure 325: Sephora: outlet data, 2012-16
Retail offering
WALGREENS BOOTS ALLIANCE
What we think
A respected brand
NHS pressures represent an opportunity
Advantage loyalty card: time for a reboot?
Is Boots lacking parent company management focus?
Company background
Company performance
Figure 326: Walgreens Boots Alliance: Group sales performance, 2012/13-2016/17
Figure 327: Walgreens Boots Alliance: Outlet data, 2012/13-2016/17
Retail offering
YVES ROCHER
What we think
Tapping into online marketplaces to reach out to more consumers in Asia
Enhanced digital presence strengthens multichannel proposition
Innovative one drop shower gel
Company background
Company performance
Figure 328: Rocher Groupe: estimated group sales performance, 2013-17
Figure 329: Rocher Groupe: estimated outlet data, 2013-17
Retail offering