BEAUTY AND PERSONAL CARE RETAILING - UK - JANUARY 2018

BEAUTY AND PERSONAL CARE RETAILING - UK - JANUARY 2018

Jan 2018 Mintel Personal CareN/A Price :
$ 2694
The UK beauty and personal care market remains challenging, as weak growth in personal care continues to hinder growth in the wider market. Meanwhile, the beauty segment is driving the market, boosted by make-up and skincare trends. Many of the health and beauty specialists have reacted to these trends and as a result are capturing engaged BPC shoppers, whilst retailers that typically target those looking for everyday toiletries are struggling to grow share as the downward pressure on pricing has been sustained
Table of contents
OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Consumer spending on BPC items continues to rise
Figure 1: 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 2: Health and beauty specialists sales (including VAT), 2012-22
Rising inflation puts pressure on UK consumers
Figure 3: 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 4: 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 5: Attitudes towards and usage of selected brands, November 2017
The consumer
Most consumers shop for beauty or personal care
Figure 6: Beauty and personal care products purchased, October 2017
Tendency for trading up in the fragrance market is high
Figure 7: Beauty and personal care brand types purchased, October 2017
In-store remains the preferred channel for BPC shoppers
Figure 8: How beauty and personal care products were purchased, October 2017
Supermarkets most used retailer, but specialists capture higher-spending customers
Figure 9: Where beauty and personal care products were purchased, October 2017
Low prices are a priority, but brands are important too
Figure 10: Important factors when buying beauty and personal care products, October 2017
More product recommendations wanted online
Figure 11: Interest in online innovations, October 2017
In-store food and drink facilities are most popular when shopping for beauty and personal care
Figure 12: Interest in in-store innovations, October 2017
Most consumers want to browse without help from store staff
Figure 13: 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 todays 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 14: Market size and forecast for consumer spending on beauty and personal care products (including VAT), 2012-22
Figure 15: 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 16: Market size and forecast for consumer spending on beauty products (including VAT), 2012-22
Figure 17: Market size and forecast for consumer spending on beauty products (including VAT), at current and constant prices, 2012-22
Beauty category performance
Figure 18: 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 19: Market size and forecast for consumer spending on personal care products (including VAT), 2012-22
Figure 20: 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 21: 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 22: Total consumer spending on personal care items (including VAT), 2012-16
Forecast methodology
SECTOR SIZE AND FORECAST
BPC specialists performing well
Figure 23: Health and beauty specialists sales (including VAT), 2012-22
Figure 24: Health and beauty specialists sales (including VAT), at current and constant prices, 2012-22
Notes on Mintels sector size
Outlet and enterprise numbers
Figure 25: Health and beauty specialists outlet numbers, 2013-17
Figure 26: Health and beauty specialists enterprise numbers, 2013-17
Forecast methodology
MARKET DRIVERS
Consumer spending power under pressure
Figure 27: Real wage growth Average weekly earnings vs inflation, January 2014-October 2017
but personal care inflation remains low
Figure 28: Annual percentage change in consumer prices, October 2016-October 2017
A decline in consumer confidence
Figure 29: Consumers future financial confidence, January 2009-October 2017
Priorities in disposable income
Figure 30: Trends in what extra money is spent on, October 2017
Changes in the structure of the UK population
Figure 31: Trends in the age structure of the UK population, 2016-26
Figure 32: Trends in the age structure of the UK population, 2016-26
Consumers spending more online
Figure 33: Online purchasing levels in the past year, by age, May 2017
Make-up trends boosting sales
Figure 34: Usage and interest in make-up trends, March 2017
Sources of beauty information
Figure 35: Sources of information, March 2017
Changes in womens facial skincare routines
Figure 36: Behavioural changes amongst female facial skincare users in the last 12 months, March 2017
Changes in mens skincare regimes
Figure 37: Behavioural changes amongst male facial skincare users in the last 12 months, March 2017
Natural hair trends impact the market
Figure 38: 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 39: Estimated distribution of spending on beauty and personal care products, 2017
Figure 40: 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 41: Leading specialist retailers net revenues (excluding VAT), 2012-16
Online retailers strengthening position
Figure 42: Leading online/home shopping specialist retailers net revenues (excluding VAT), 2012-16
Leading pharmacies by sales
Figure 43: Leading pharmacy chains net revenues (excluding VAT), 2012-16
Outlet numbers and sales per outlet
Figure 44: Leading specialist retailers outlet numbers, 2012-16
Figure 45: Leading specialist retailers estimated sales per outlet, 2012-16
Operating profits and margins
Figure 46: Leading specialist retailers operating profits, 2012-16
Figure 47: Leading specialist online/home shopping retailers operating profits, 2012-16
Figure 48: Leading specialist retailers operating margins, 2012-16
Figure 49: Leading specialist online/home shopping retailers operating margins, 2012-16
LEADING NON-SPECIALISTS
Department stores outperform the market
Figure 50: Leading non-specialist retailers estimated sales growth, by segment, 2016
Discount grocers continue to strengthen position
Figure 51: Leading non-specialist retailers estimated beauty and personal care goods sales (excluding VAT), 2014-16
Non-specialists space allocation
The supermarkets
Figure 52: Leading department stores estimated health and beauty space allocation, 2017
The department stores
Figure 53: Leading department stores estimated health and beauty space allocation, 2017
The discounters
Figure 54: 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 55: Leading specialist and non-specialist retailers estimated market shares, 2016
Figure 56: Leading specialist and non-specialist retailers estimated market shares, 2014-16
Note on market shares
SPACE ALLOCATION SUMMARY
Figure 57: 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 58: Leading health and beauty retailers: Health and beauty products estimated detailed space allocation, December 2017
Figure 59: 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 60: 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 61: Estimated market size and forecast of online consumer expenditure on beauty products, 2012-22
Department stores growing share of online spending
Figure 62: 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 63: ASOS Make-Up, 2017
Figure 64: 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 65: LOccitane London Flagship, 2017
Figure 66: Asop London flagship store, 2017
Increasing use of in-store technology
Pop-ups generate brand hype
Subscription services get a bricks-and-mortar makeover
Figure 67: Birchbox Carnaby Street Pop-up store, 2017
Tapping into the rise in veganism
The importance of personalised and inclusive beauty
Figure 68: Fenty Beauty homepage, December 2017
Moral make-up
ADVERTISING AND MARKETING ACTIVITY
Total beauty advertising spend decreases, but top retailers increase spend
Figure 69: Recorded above-the-line advertising expenditure on beauty and personal care, total market, 2012-16
Figure 70: 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
Superdrugs new direction
Figure 71: That Superdrug Feeling campaign video still, 2017
Digital increases in importance
Figure 72: 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 73: Attitudes towards and usage of selected brands, November 2017
Key brand metrics
Figure 74: Key metrics for selected brands, November 2017
Brand attitudes: Boots is the most trustworthy retailer
Figure 75: Attitudes, by brand, November 2017
Brand personality: Jo Malone seen as exclusive
Figure 76: Brand personality Macro image, November 2017
Savers has an impersonal and basic brand image
Figure 77: Brand personality Micro image, November 2017
Brand analysis
Boots benefits from high levels of brand awareness
Figure 78: User profile of Boots, November 2017
Lush attracts a young shopper with its fun, ethical brand image
Figure 79: User profile of Lush, November 2017
Superdrugs value pricing resonates with consumers
Figure 80: User profile of Superdrug, November 2017
Savers also benefits from its low-price proposition
Figure 81: User profile of Savers, November 2017
Jo Malone expensive but worth paying more for
Figure 82: User profile of Jo Malone, November 2017
Lookfantastic.com popular among affluent Millennials
Figure 83: 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 84: Beauty and personal care products purchased, October 2017
Deodorants and body sprays most purchased
Figure 85: Beauty and personal care products purchased, October 2017
Women still drive BPC purchasing
Figure 86: Beauty and personal care products purchased, by gender, October 2017
Young people less likely to buy personal care
Figure 87: Beauty and personal care products purchased, by age, October 2017
Young women buy a wide range of products
Figure 88: Repertoire of beauty and personal care products purchased, October 2017
BRAND TYPES PURCHASED
Consumers willing to invest in premium fragrances
Figure 89: 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 90: How beauty and personal care products were purchased, October 2017
Convenience and price attract people online
Supermarkets attract most shoppers
Figure 91: 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 92: Where beauty and personal care products were purchased, by age, October 2017
Department stores popular with affluent shoppers
Figure 93: Where beauty and personal care products were purchased, by socio-economic group, October 2017
Amazon holds dominant position in online market
Figure 94: Where beauty and personal care products were purchased, October 2017
Specialists attract beauty and haircare shoppers
Figure 95: Where beauty and personal care products were purchased, by products purchased, October 2017
Repertoire
Figure 96: Repertoire of where beauty and personal care products were purchased, October 2017
IMPORTANT FACTORS
Demand for consistent pricing
Figure 97: Important factors when buying beauty and personal care products, October 2017
Women more drawn in by promotions
Figure 98: 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 99: Important factors when buying beauty and personal care products, by age and income, October 2017
Make-up buyers most interested in loyalty schemes
Figure 100: Important factors when buying beauty and personal care products, by products purchased, October 2017
Department stores need knowledgeable staff
Figure 101: Important factors when buying beauty and personal care products, by retailer used, October 2017
Brand ethics arent a priority
INTEREST IN ONLINE INNOVATIONS
Personalised recommendations most likely to resonate
Figure 102: Interest in online innovations, October 2017
Women show more interest in online innovations
Figure 103: Interest in online innovations, by gender, October 2017
Subscription services tap into older Millennials
Figure 104: Interest in online innovations, by age, October 2017
Affluent want to see more online tutorials
Figure 105: 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 106: Interest in online innovations, by products purchased, October 2017
INTEREST IN IN-STORE INNOVATIONS
Demand for in-store facial treatments high
Figure 107: Interest in in-store innovations, October 2017
Women want a range of beauty services in-store
Figure 108: Interest in in-store innovations, by gender, October 2017
Young shoppers most engaged with in-store innovation
Figure 109: Interest in in-store innovations, by age, October 2017
Innovations also show higher appeal among affluent
Figure 110: Interest in in-store innovations, by age, October 2017
Toiletries shoppers show little interest in store experience
Figure 111: Interest in in-store innovations, by products purchased, October 2017
ATTITUDES TOWARDS BUYING BEAUTY AND PERSONAL CARE
Most dont want staff interaction
Figure 112: Attitudes towards buying beauty and personal care, October 2017
Incentives to purchase capture female shoppers
Figure 113: Attitudes towards buying beauty and personal care, by gender, October 2017
Two thirds of 16-24s research online ahead of purchase
Figure 114: Attitudes towards buying beauty and personal care, by age, October 2017
Less affluent more overwhelmed by choice
Figure 115: Attitudes towards buying beauty and personal care, by socio-economic status, October 2017
Millennials unsatisfied with recommendations
Figure 116: Attitudes towards buying beauty and personal care, by age, October 2017
The lack of trust in store staff confirmed by qualitative research
AS WATSON (UK)
What we think
Following the UK
Discounting
Service
Online
Where next
Company background
Company performance
Figure 117: AS Watson (Europe): group financial performance, 2012-16
Figure 118: AS Watson (Europe): outlet data, 2012-16
Retail offering
AS Watson in Europe
UK
Superdrug
Savers
The Perfume Shop
THE BODY SHOP
What we think
Distinct USP suffered under the weight of LOral ownership
Mobile-first e-commerce platform roll-out
Shop-in-shop deal with El Corte Ingls an opportunity to attract more customers
Company background
Company performance
Figure 119: The Body Shop Retail sales: group financial performance, 2012-16
Figure 120: The Body Shop: estimated UK sales performance, 2012-16
Figure 121: The Body Shop Retail sales: estimated 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 122: Debenhams: group financial performance, 2012/13-2016/17
Figure 123: Debenhams: 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 124: The Fragrance Shop: group financial performance, 2012/13-2016/17
Figure 125: 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 126: House of Fraser Plc: group financial performance, 2012/13-2016/17
Figure 127: 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 128: John Lewis Plc (department store): group financial performance, 2012/13-2016/17
Figure 129: 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 130: Kiko Milano: group sales performance, 2012-17
Figure 131: 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 132: Lush Retail Ltd: Group financial performance, 2012/13-2016/17
Figure 133: Lush Retail Ltd: Outlet data, 2012/13-2016/17
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 134: Walgreens Boots Alliance: group sales performance, 2012/13-2016/17
Figure 135: Walgreens Boots Alliance: outlet data, 2012/13-2016/17
Retail offering
APPENDIX DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX MARKET SIZE AND FORECAST
Forecast methodology

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