Beauty Retailing - UK - January 2015

INTRODUCTION
Definitions
Market size
Market shares
Retail sector size
Financial definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Spending forecast
Figure 1: Market size and forecast: spending on beauty and personal care products (including VAT), 2009-19
Specialist retailers’ forecast
Figure 2: Health and beauty Specialists’ sales (including VAT), 2009-19
Market factors
Online
Figure 3: Online sales as % of all spending on beauty and personal care products, 2013-15
Companies, brands and innovations
Market shares
Figure 4: Leading specialist and non-specialist retailers: estimated market shares, 2013
The consumer
Where they shop
Figure 5: The consumer: where they bought beauty products in the last 12 months, whether in-store or online, November 2014
Attitudes towards discount stores
Figure 6: The consumer: agreement with attitudes towards discount stores, November 2014
Type of beauty brands bought, by retailer used
Figure 7: The consumer: type of beauty products bought, by retailer, November 2014
Attitudes towards types of beauty brands
Figure 8: The consumer: attitudes towards types of beauty brands, November 2014
Attitudes towards social media and retail technology
Figure 9: The consumer: agreement with attitude statements on social media and beauty, November 2014
Figure 10: The consumer: agreement with attitude statements on retail technology and beauty, November 2014
What we think
ISSUES AND INSIGHTS
How can multi-channel retailers respond to the threat from internet pure players?
The facts
The implications
Discounters – another downward force on market growth?
The facts
The implications
Can high street beauty retailers capitalise on the changes in grocery shopping patterns?
The facts
The implications
How is the appetite for mobile apps impacting on the beauty market?
The facts
The implications
TREND APPLICATION
Many Mes
The Nouveau Poor
Mintel Futures
MARKET SIZE AND FORECAST
Key points
Slower growth as shoppers spend more carefully
Figure 11: Market size and forecast: spending on beauty and personal care products (including VAT), 2009-19
Figure 12: Market size and forecast: spending on beauty and personal care products (including VAT), at current and constant prices, 2009-19
Segment forecasts: Beauty versus Other Products
Figure 13: Segment size and forecast: spending on beauty products (including VAT), 2009-19
Figure 14: Segment size and forecast: spending on beauty products (including VAT), at current and constant prices, 2009-19
Figure 15: Segment size and forecast: spending on other personal care products (including VAT), 2009-19
Figure 16: Segment size and forecast: spending on other personal care products (including VAT), at current and constant prices, 2009-19
Category performance in beauty
Figure 17: Spending on beauty products, by category, 2013 and 2014
Colour cosmetics
Fragrances
Facial skincare
Bodycare
Total spending on personal care items
Figure 18: Total consumer spending on personal care items (including VAT), 2009-13
Mintel’s forecast methodology
THE MARKET ENVIRONMENT
Key points
An ageing population is a threat and an opportunity
Figure 19: Age structure of the UK population - Total, 2009, 2014, 2019
Figure 20: Age structure of the UK population - Female, 2009, 2014, 2019
More male grooming
Increasing ethnic diversity
Figure 21: Natural skin tone of UK female population, May 2014
Willingness to spend
Figure 22: The consumer: trends in what extra money is spent on – beauty categories, January 2013 – October 2014
But more spend is going online
Figure 23: Online sales as % of all spending on beauty and personal care products, 2013-15
And consumers are shopping more smartly
Figure 24: Discount voucher usage in the past three months, by retailer type – most popular types of retailers, October 2013
SECTOR SIZE AND FORECAST
Key points
Specialists set to outpace BPC spending
Figure 25: Health and beauty specialists’ sales (including VAT), 2009-19
Figure 26: Health and beauty specialists’ sales (including VAT), at current and constant prices, 2009-19
Figure 27: Annual growth in specialists’ sector sales and annual growth in spending on beauty and personal care products, 2014-19 (fore)
Notes on the sector size
Outlet and enterprise numbers
Figure 28: Health and beauty specialists: outlet numbers, 2009-14
Figure 29: Health and beauty specialists: enterprise numbers, 2009-14
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Budget retailer launches its own cosmetics range
First online marketplace dedicated to beauty products
Boots new transactional app
On-demand beauty service to your door within 45 minutes
Boots innovative make-up service
3D augmented reality mirror
Superdrug’s new beauty concept store
Manicure Marathon pop-up event
Clinique’s first-ever pop-up store
Nocibe’s new store concept dedicated to private brand and services
DNA-based beauty and cosmetics brand’s laboratory store environment
Beauty-on-the-go
Upmarket automated beauty store
SPACE ALLOCATION SUMMARY
Key points
Space allocation overview
Figure 30: Leading health and beauty retailers: Health and beauty products space allocation, December 2014
Detailed space allocation
Figure 31: Dior beauty counter, Debenhams, White City, London, December 2014
Figure 32: : Leading health and beauty retailers: Detailed health and beauty products space allocation within the beauty departments, December 2014
Health and beauty versus non-health and beauty-related
Figure 33: Leading health and beauty retailers: Percentage of total in-store space dedicated to health and beauty category, December 2014
LEADING SPECIALIST RETAILERS: FINANCIALS AND OUTLETS
Key points
A profusion of privately-owned retailers
2013 was a better year for Boots and Superdrug
Top specialists by sales
Figure 34: Leading specialist retailers: net revenues, 2009-13
Figure 35: Leading pharmacy chains’ net revenues, 2009-13
Outlet numbers and sales per outlet
Figure 36: Leading specialist retailers: store numbers, 2009-13
Figure 37: Leading specialist retailers: annual sales per outlet, 2009-13
Operating profits and margins
Figure 38: Leading specialist retailers: Operating profits, 2009-13
Figure 39: Leading specialist retailers: Operating margins, 2009-13
Sales area and sales densities
Figure 40: Selected leading specialist retailers: estimated total sales area, 2009-13
Figure 41: Selected leading specialist retailers: estimated annual sales per sq m, 2009-13
LEADING NON-SPECIALIST RETAILERS
Key points
Discount stores stealing share from supermarkets
Figure 42: Leading non-specialist retailers: estimated sales growth by segment, 2013
Figure 43: Leading non-specialist retailers: estimated beauty and personal care goods sales (excluding VAT), 2011-13
The grocers
The department stores
The discount stores
MARKET SHARES
Key points
Grocers strong in BPC
Figure 44: Leading specialist and non-specialist retailers: estimated market shares, 2013
Figure 45: Leading specialist and non-specialist retailers: market shares, 2011-13
Note on market shares
ONLINE
Key points
Online approaching 10% of the market
Figure 46: Estimated online consumer spending on BPC products, 2009-15
Leading sites by visitor numbers
Figure 47: Leading fragrances/cosmetics retail websites, by unique visitor numbers, October 2014
Figure 48: Top five fragrances/cosmetics retail websites: visitor profile, by age group, October 2014
Figure 49: Top five fragrances/cosmetics retail websites: visitor profile, by gender, October 2014
Figure 50: Top five fragrances/cosmetics retail websites: visitor profile, by socio-economic group, October 2014
CHANNELS OF DISTRIBUTION
Key points
Discount channels growing in BPC
Figure 51: Estimated distribution of spending on beauty and personal care products, 2014
Figure 52: Estimated distribution of spending on beauty and personal care products, in percentage and value terms (including VAT), 2013 and 2014
BRAND COMMUNICATION AND PROMOTION
Key points
Beauty advertising spend flat in 2013
Figure 53: Main monitored media advertising expenditure on cosmetics, personal care and body care, by leading retailers, 2010-13
TV and the press attract the biggest share of beauty ad spend
Figure 54: Main monitored media advertising expenditure on cosmetics, personal care and body care, by leading retailers, by media type, 2013
What we have seen from the leading advertisers in 2014
BRAND RESEARCH
Brand map
Figure 55: Attitudes towards and usage of brands in the retail sector, November 2014
Correspondence analysis
Brand attitudes
Figure 56: Attitudes, by retailer, November 2014
Brand personality
Figure 57: Retailer brand personality – Macro image, November 2014
Figure 58: Retailer brand personality – Micro image, November 2014
Brand experience
Figure 59: Retailer usage, November 2014
Figure 60: Satisfaction with various retailers, November 2014
Figure 61: Consideration of retailers, November 2014
Figure 62: Consumer perceptions of current retailer performance, November 2014
Brand recommendation
Figure 63: Recommendation of selected retailers, November 2014
THE CONSUMER – WHERE THEY BUY IN-STORE OR ONLINE
Key points
What we asked
Who buys beauty products?
Figure 64: Who had bought beauty products in the last 12 months, November 2014
Where consumers buy
Figure 65: UK: Where they buy beauty products, in-store and online, November 2014
Favourite beauty retailers
Where consumers buy – offline/online split
Figure 66: UK: Where they buy beauty products, in-store or online, November 2014
Who shops where
Figure 67: UK: Where they buy any beauty product, by age and affluence, November 2014
Shopping repertoire
Breaking the routine
Figure 68: Buying repertoire (in-store and online) in the last 12 months by gender, age and socio-economic group, November 2014
Older people and the less affluent shopped around more in 2014
Figure 69: Those shopping (in-store and online) at five or more types of retailer in the last 12 months by gender, age and socio-economic group, November 2013 and 2014
Under 35s are the most fickle
Boots customer loyalty
Figure 70: Buying repertoire (in-store and online) by Where they buy, November 2014
THE CONSUMER – TYPES OF BRANDS THEY USE
Key points
What we asked
What types of brands consumers use
Mass market brands most popular
Figure 71: Types of beauty brand typically used, November 2014
Consumers prepared to splash out on premium/luxury fragrances and aftershave
Figure 72: Types of beauty brand typically used, by product category, November 2014
Who uses what
Figure 73: Types of facial skincare brands typically used by age and affluence, November 2014
Figure 74: Types of bodycare brands typically used by age and affluence, November 2014
Figure 75: Types of make-up brands typically used by age and affluence, November 2014
Figure 76: Types of fragrances/aftershaves typically used by age and affluence, November 2014
Type of brand bought by retailer
Figure 77: Types of brands typically purchased, by selected retailers, November 2014
Figure 78: UK: budget/standard own brands typically bought, by selected retailers, November 2014
Figure 79: UK: premium own brands typically bought, by selected retailers, November 2014
Figure 80: Mass market brands typically bought, by selected retailers, November 2014
Figure 81: Premium/luxury brands typically bought, by selected retailer, November 2014
Brand opinions and patterns
THE CONSUMER – ATTITUDES TOWARDS BRAND TYPES
Key points
What we asked
Attitudes to different brand types
Figure 82: Attitude to different types of beauty brands, November 2014
Discussion group opinions
Top perfume houses perpetuate the dream
Younger people more open to new brands?
Figure 83: Those who agree premium/luxury fragrance brands are worth the extra money, by age, November 2014
Boots sews up the premium branded segment
Figure 84: Attitude to different types of beauty brands, by women aged 45-64 and 65+, November 2014
Targeting male shoppers
Figure 85: Attitude to different types of beauty brands, by gender, November 2014
THE CONSUMER – ATTITUDES TOWARDS DISCOUNT RETAILERS
Key points
What we asked
Attitudes to discount retailers
Figure 86: Attitude towards shopping for beauty products from discount stores, November 2014
Discussion group opinions
Potential for private label?
THE CONSUMER – ATTITUDES TOWARDS DIGITAL TECHNOLOGY AND SOCIAL MEDIA
Key points
What we asked
Attitudes to digital initiatives and social media
Figure 87: Attitude to digital technology and social media, November 2014
Attitudes to beauty apps and mobile enabled sites
Opportunities and threat from beauty apps
New initiatives
Figure 88: Selective Attitudes, by smartphone/tablet users only, November 2014
Digital versus human contact
Polar opposites
Figure 89: Those who prefer to search for product information in-store on their mobile device than ask a sales advisor, by age and gender, November 2014
Attitudes to social media
The role of social media in beauty shopping
Figure 90: Attitudes to social media, November 2014
Under 35s much more engaged with social media
Figure 91: Those agreeing with social media statements, by age, November 2014
In-store experiences
Figure 92: Attitudes to in-store experiences, November 2014
Figure 93: Those interested in using in-store tablets to research the beauty products available, by gender, age and household income, November 2014
Figure 94: Those interested in using in-store tablets to pay for beauty products, by gender, age and household income, November 2014
Figure 95: Attitudes to in-store tablets by where they shop, November 2014
ALLIANCE BOOTS
What we think
Life under Walgreens
Very different propositions
Company background
Company performance
Figure 96: Boots the Chemists, Retail sales growth 2013/14 on 2012/13
Figure 97: Boots: UK sales mix, 2008/09-2013/14
Figure 98: Alliance Boots: Group financial performance, 2009/10-2013/14
Figure 99: Alliance Boots: Outlet data, 2009/10-2013/14
Retail offering
A.S. WATSON UK (SUPERDRUG, PERFUME SHOP, SAVERS)
What we think
Superdrug
The Perfume Shop
Savers
Company background
Company performance
Superdrug
The Perfume Shop
Savers
Figure 100: A.S. Watson UK: Financial performance, 2009-2014 (est)
Figure 101: A.S. Watson UK: Outlet data (part estimated), 2009-2014
Retail offering
Superdrug
The Perfume Shop
Savers
THE BODY SHOP
What we think
Store refits update its image
Values remain at its core
Better off alone?
Company background
Company performance
Figure 102: The Body Shop: Like-for-like retail sales growth, 2011-14,
Figure 1: The Body Shop: Group financial performance, 2009-2014
Figure 2: The Body Shop: Estimated UK sales performance, 2009-13
Figure 103: The Body Shop: Outlet data, 2009-14
Figure 3: The Body Shop: Outlet breakdown, 2009-2013
Retail offering
DEBENHAMS
What we think
Hints of underperformance
Less discounting
Online is ticking the boxes
Company background
Company performance
Figure 104: Debenhams: Estimated beauty sales, 2010/11-2013/14
Figure 105: Debenhams: Group financial performance, 2009/10-2013/14
Figure 106: Debenhams: Outlet data, 2009/10-2013/14
Retail offering
THE FRAGRANCE SHOP
What we think
Focused on fragrances
Entering self-service with Indulge
Embracing the online channel
Company background
Company performance
Figure 107: TFS Stores Limited: Group financial performance, 2009/10-2013/14
Figure 108: The Fragrance Shop: Outlet data, 2009/10-2013/14
Retail offering
HOUSE OF FRASER
What we think
Beauty showing slight growth
Strong branded offering
House extension
Multi-channel operations proving successful
Company background
Company performance
Figure 109: House of Fraser: Estimated beauty sales, 2012-2014
Figure 110: House of Fraser Total: Group financial performance, 2009/10-2013/14
Figure 111: House of Fraser Total: Outlet data, 2009/10-2013/14
Retail offering
JOHN LEWIS
What we think
Figure 112: Age demographics of those who have purchased beauty products, in-store or online at John Lewis, 2014
Positioning
Beauty services
Company background
Company performance
Figure 113: John Lewis: Estimated beauty and personal care goods sales (excluding VAT), 2010/11-2013/14
Figure 114: John Lewis Plc (department store): Group financial performance, 2009/10-2013/14
Figure 115: John Lewis Plc (department store): Outlet data, 2009/10-2013/14
Retail offering
LUSH RETAIL
What we think
Steady good growth
A loyal following
Website revamp
Company background
Company performance
Figure 116: Lush Retail Ltd: Group financial performance, 2008/9-2013/14
Figure 117: Lush Retail Ltd: Outlet data, 2008/9-2013/14
Retail offering