STOREDITS SKIN CARE, MAKE-UP and COSMETICS - A research report by the Shop! Global Network - Shop! Association
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STOREDITS SKIN CARE, MAKE-UP and COSMETICS A research report by the Shop! Global Network Sponsored by Platinum sponsor Prepared by Gold sponsors
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Storedits Letter from Todd Our goal at Shop! Environments We hope you find this comprehensive Association is to provide retailers and report helpful as you collaborate and brands with fresh ideas to meet their build alliances with retailers in this customers’ untapped needs by using competitive market. Shop! member products and services. “Collaboration & Alliances” is one of If you have questions about this or six vital retail trends we’ve identified other Shop! research reports, feel as necessary to thrive in today’s free to reach out to me (tdittman@ challenging retail environment. shopassociation.org) or Madeline Baumgartner, Director of Education This research project underscores & Research, at mbaumgartner@ how strong alliances among our Shop! shopassociation.org. Global Network members can result in A special thank you to the creation of an essential tool for the our sponsors WestRock, Thank you! industry at large. Storedits (stor-ditz) Essentra and Hera Lighting is an analytical qualitative survey of for their ongoing support retail space conducted by the Shop! of the Storedits program. Global Network. For several years, this We also thank the staff study has been identifying how POP Todd Dittman, at POPAI UK & Ireland displays are being deployed in different Executive Director Shop! for managing the project, categories and retail channels across providing analysis and the world. This year, it was expanded writing the report, as well throughout North America and covers as other members of the the explosive market of skin care and make-up/cosmetics. Shop! Global Network who conducted the field work. The total global cosmetic products Without their contributions, market, which includes hair care, oral this project would not have and fragrances, was valued at USD For more information about this topic, 532.4 billion in 2017. This burgeoning please visit Shop! been possible. market is expected to reach a market Website: shopassociation.org value of USD 805.6 billion by 2023. Email: welcome@shopassociation.org The study results reveal contributions or call Madeline Baumgartner, from global Shop! members to Shop! Director of Education & the growth of this market through Research on 312-863-2917. innovative displays and marketing. 2 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Contents Introduction 4 Executive Summary 5 The Global Cosmetics and Skin Care Market 6 Industry Trends 9 Display Trends 11 Market Data 13 In-store Research 17 Display Types and Distribution 18 Display Characteristics 23 Conclusion 30 Recommendations 31 Sources 31 Glossary of Terms 32 3 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Introduction The cosmetics and skin care market is one in which physical stores play a huge part. When buying these products, we like to see, touch, smell and test – something which we cannot do online. Despite global economic uncertainty, this category is consistently resilient, with a continuing focus on our looks combining with new and emerging trends to keep the market buoyant. Increased disposable income in traditionally poorer countries, an aging population, the growing trend for men’s grooming products and increased innovation offering new ways to try and buy, all mean that brands and retailers can find ever more audiences to reach. Although dominated by the big top ten players, new entrants are constantly seeking to join this highly competitive market, particularly those with a focus on anti-aging products. In-store promotional materials have a clear task and focus. Attracting shoppers to the product NE W Introducing new products Our research Increasing product and category Storedits (stor-ditz) is an analytical The research set out to identify the following sales qualitative survey of retail space conducted aspects of POP display use in different by the Shop! Global Network. It has been retail environments. used for several years to identify how • Location in-store of POP display Creating impulse purchase and POP display is being employed in different cross-sell opportunities • Type of POP used categories and retail channels across the world. It is not, however, a full audit of this • Use of digital screens Enhancing co-branding space and display materials therein; rather, it • Types of messaging and information targets specific areas to identify trends and being communicated understand how displays and promotional Offering shoppers a more engaging messaging are being used by brands and • Color brand experience retailers to appeal to and influence the • Single or multiple brand use shopper in-store. POPAI UK & Ireland also undertook desktop Our research explored the current and This research into the cosmetics and skin research and consulted industry experts changing global trends, seeking to care industry follows last year’s consumer to understand the current position of the understand the role of POP across the electronics report, but has been expanded global cosmetics and skin care market and world and to discover, when it comes to to cover 13 countries in Asia, Europe and to investigate existing and predicted trends cosmetics and skin care: what does good North America. that may impact these categories. really look like? 4 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Executive Summary Physical stores are a key aspect of the global cosmetics and skin care categories, with shopper demand for ‘try before you buy’ placing them ahead of online retailers. Global sales in both categories are forecast to grow, with this growth driven by a number of positive consumer trends as well as the population growth in emerging markets. Our research explored the current and changing global trends, seeking to understand the role of POP across the world. We covered 13 countries across Europe, Asia and North America. The sector has been traditionally resilient, proving less susceptible to economic downturns than other fast-moving consumer goods categories. A continuing influx of new entrants to the market is keeping it buoyant and fresh, introducing new and innovative products. However, the market remains dominated by the top ten leading companies. While communicating product information is ever more important for new and innovative products, pressure remains for displays to hold as much stock as possible. This often results in challenging design decisions to determine how best to use space on display equipment. The use, type and placement of cosmetics and skin care displays was fairly consistent across all the countries surveyed, generally with just two or three exceptions in each case. Cosmetics and skin care POP displays were widely used across all the retail channels surveyed, with a varied range of display types seen. POP display plays a vital role in helping shoppers navigate the numerous and varied products across categories. While a large amount of display equipment was seen in most retailers, the vast majority of it was Tester facilities play a key role in displays, along displays, often at the expense of clear and concentrated in the main cosmetics and with lighting, which has a dual role of attracting bold branding. skin care trading areas, with relatively few shoppers to displays and displays seen elsewhere in stores. highlighting products. Digital technology has not yet been widely adopted. While it has the potential to address Permanent display equipment was by far the Retailers continue to influence the size, design some of the product information issues, the most prevalent, proving three times more and placement of cosmetics and skin care technical challenges of centrally controlling popular than temporary display. content is restricting its use. 5 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS The Global Breakdown of the cosmetic market worldwide 2011-2017, by geographic zone Cosmetics and Asia-Pacific North America Western Europe Latin America Eastern Europe Africa & Middle East Skin Care Market 100 80 Market share (%) 60 Skin care, make-up, hair care, fragrances, sun care... it seems that looking good 40 and protecting our skin is something of an international inclination. 20 This is reflected in the figures. The global cosmetic products market looks set to 0 2011 2012 2013 2014 2015 2016 2017 continue to thrive – valued at $532.4bn in 2017, Geographic region it is expected to reach $805.6bn by 2023. Source: Statista – Cosmetics Industry Worldwide – 2016 A predicted 51% Annual global growth across the whole increase for the global category since 2004 has varied, from a cosmetics and skin low of 1% in 2009 to a high of 5% in 2007. $805.6bn Growth for 2017 is estimated at 5%, with a $532.4bn care market by 2023 2017 2018 2019 2020 2021 2022 2023 4% average for the whole period. The Asia-Pacific region holds the highest Worldwide economic events have traditionally market share, having gradually reinforced affected categories within the wider cosmetics that position since 2011, as shown in the and beauty market, with periods of sales graph above. growth and decline at country levels. Skin care is the global top priority, taking However, skin care, color cosmetics, eye the highest market share within all beauty make-up, lipstick and foundation have been categories, followed by hair care and color resilient, buoyed by the continuing and growing cosmetics. The graph below details the use of products by women and, increasingly, relative shares of the global beauty market by men across the world. by category. Global beauty market value by category 2016 Sales value in US$ billion Skin care 116.5 Hair care 72.5 Color cosmetics 61.5 Men’s grooming 48.5 Fragrances 47 Oral care 42.5 Bath & shower 39 Deodorants 20.5 Source: Baby &Statista child – Cosmetics Industry Worldwide – 2016 16 6 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS This hierarchy looks set to continue. The Global skin care market size 2012-2024 global skin care market has experienced steady growth since 2012, which is forecast to continue to 2024. The color cosmetics 180.3 171.7 market has also experienced a sustained, 163.5 155.8 albeit slower, sales increase. These graphs Market size (US$ billion) 148.3 141.3 (left) show these increases. 134.5 128.1 116.2 122.0 110.7 99.6 103.0 Mass beauty holds sway in most markets, with the premium category far more popular in North America and equally important in Western Europe and Australia, as shown in the graph below. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Statista – Cosmetics Industry Worldwide – 2016 Sales growth of premium and mass Global make-up market size 2012-2024 beauty products 2016-2021 Sales growth (US$ million) 84.5 81.6 Market size (US$ billion) 76.2 78.8 68.7 71.1 73.6 8,600 64.1 66.4 57.4 60.7 Asia- 55.0 56.9 Pacific 14,900 1,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Latin America 9,600 Source: Statista – Cosmetics Industry Worldwide – 2016 2,800 Western Europe 2,800 Mass beauty Premium beauty 1,000 Middle East & Africa 2,700 5,700 North America 2,700 400 Eastern Europe 1,600 400 Australasia 400 Source: Statista – Cosmetics Industry Worldwide – 2016 7 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Renowned Market Leaders The cosmetics market is not as fickle as Top ten global beauty companies we might think, with the top ten leading companies being market leaders for decades. 31.2 Turnover (US$ billion) These, along with smaller companies across the globe, are thriving on the diversity of 24.8 products and demographics at their disposal. 13.7 12.4 The top ten cosmetics companies all turn 9.4 8.9 over in excess of $5bn and are a mixture of 6.9 6.7 6.1 5.6 specialist beauty companies and those with wider portfolios, including food, household and luxury products. Source: beautypackaging.com – based on 2017 data (sales include only cosmetics, fragrance and personal care items) One of world’s largest cosmetics companies and top beauty brands, L’Oréal was founded Beiersdorf was founded in 1882 and has a wide in 1909. Its product range includes color range of personal care products, including skin cosmetics, skin care, hair care, sun care and Procter and Gamble (P&G) holds care and body care brands. Some of its most high- fragrances. As well as its key brands L’Oréal a significant position in the skin profile brands include NIVEA, Eucerin, Labello, Paris, Garnier and Maybelline New York, the care industry with many well- Florena and La Prairie. The company operates company also sells luxury brands including known brands, including Ivory, across different markets including the mass Lancôme, Giorgio Armani and Yves Saint Olay, Safeguard and Secret, market, dermocosmetics and premium cosmetics. Laurent Beauté. offering a wide range of beauty and personal care products. LVMH is one of the world’s leading luxury products group, and its cosmetics and perfume business grew by 12% in 2017. Driving the make-up A big player in fragrance and segment was growth in brands such as Rouge professional hair care as well Dior, Dior Addict and Guerlain. Unilever is one of the largest consumer as color cosmetics, Coty owns goods companies in the world. It has also brands such as Adidas, Clairol, carved a place for itself in the cosmetics CoverGirl, David Beckham, Katy industry, with popular brands such as Axe/ Perry, Max Factor, Rimmel London, Lynx, Dove, Lifebuoy, Pond’s, Closeup, Sally Hansen and Wella. It also TRESemmé, Suave, Sunsilk and Vaseline. owns the luxury brands Marc Perhaps best known as a pharmaceutical company In 2017, Unilever announced the creation of Jacobs, Calvin Klein, Chloé, Gucci, with several baby product ranges, Johnson & Unilever Cosmetics International to extend Hugo Boss and philosophy. Johnson (J&J) has also become known globally for its its global portfolio of prestige beauty and fragrance brands. beauty brands, including Neutrogena and Aveeno. Founded in 1872 in Ginza, Tokyo, Shiseido was the first Western-style pharmacy in Based in South Korea, Amorepacific focuses primarily Japan, producing personal care on developing natural beauty products and has Estée Lauder was founded in the products including skin care, benefitted from the recent K-beauty trend – the 1940s and is one of the world’s leading fragrance, hair care, sun care, rise of Korean make-up in the West. It launched manufacturers and marketers of quality body care and make-up. Its most its cosmetics brand Amorepacific in 2002 and is skin care, make-up, fragrance and hair care popular brands include Shiseido, growing rapidly, with increasing demand for its most products. Its diverse portfolio of over 25 Za, Senka, Anessa, Sea Breeze, popular brands, which include Sulwhasoo, Laneige, brands is sold in 150 countries. NARS, and Bare Escentuals. Mamonde, Innisfree, Etude House and Annick Goutal. 8 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Industry Trends Forever Young This has been supported by aggressive Enhanced Technology An aging world population is a key factor in the marketing strategies and promotional Technology is pervading almost every growth of the cosmetics market, with the global campaigns aimed at men which, together area of retail, and the cosmetics industry population of those aged 60 and over estimated with the influence of social media and male is no different. High-tech beauty devices to reach 2.1bn by 2050. grooming magazines, keeps them much are becoming much more prevalent, more informed about the latest trends in the offering consumers clever new ways to Life expectancy for women is expected to cosmetics industry then they have been in integrate their personal care routines into increase by three-and-a-half years to 86.3, the past. their homes using technology. and for men by over five years, to 83.6. With an almost universal desire amongst men and Combination Skin women to retain their youthful looks, there is Multifunctional cosmetics, such as products Developments include: expected to be a corresponding growth in sales which combine both skin care properties and of anti-aging products to reduce wrinkles and traditional cosmetics color choices, are set to • The Neutrogena Skin360, a age spots and to balance uneven skin tone. be game changers and trendsetters over the sensor-based skin-scanning There is also likely to be increased innovation in coming years. Increasing demand for these device with an accompanying new cosmetics products. within the premium cosmetics category is app to monitor skin over a period driven by their capacity to give consumers of time. The Modern Man maximum value for the most expensive make- • Lancôme’s Le Teint Particulier It seems that men across the globe are up brands. foundation matcher, which uses becoming more image-conscious. Millennial men a digital scanner and artificial in particular are adopting grooming regimes and These products are being developed by intelligence (AI) to identify a buying into categories traditionally associated companies which are wise to the growing need shopper’s exact skin tone and find with women, such as make-up, facial cleansers, for convenience in the busy schedules of the a perfect match. moisturisers and exfoliation products. modern consumer. • Virtual ‘try on’ apps like Sephora’s Virtual Artist, enabling shoppers to try thousands of lipstick and eye shadow shades using their smartphones. The app also hosts digital make-up tutorials to help match shades to skin color. • Smart skin care tools such as the HiMirror from New Kinpo Group. This scans shoppers’ faces for wrinkles, spots, pores and lines, and then provides personalised tips and product recommendations. • Make-up printers which can scan skin for blemishes and apply tiny amounts of make-up to hide them. P&G’s Opté scanner uses a built- in camera to take 200 frames per second, while a microprocessor analyses the data to differentiate between light and dark areas. A microprinter then applies foundation to the skin. 9 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Smart Beauty The ubiquitous smartphone offers consumers access to ever easier online shopping and social media platforms, and e-commerce will play an increasingly important role in the category, particularly in skin care. As such, companies will continue to focus on online marketing, as well as developing brand- specific Facebook sites and Twitter accounts. The Middle East and Africa Cosmetics sales growth is traditionally slow in these regions, with many populations having little, or no, disposable income. However, some countries in these areas are forecast to grow with the highest annual compound growth rate in the cosmetics market. Israel, Saudi Arabia and the United Arab Emirates (UAE) are expected to lead this growth, especially in the nail, hair and hair removal categories. An increase in the number of women in the workplace in countries such as the UAE, as well as a growth in tourism, are also driving cosmetics sales. The wealthier Middle Eastern countries have already been penetrated by luxury brands such as Dior, Clarins, Clinique, Lancôme and Estée Lauder. These are now permeating into developing countries such as Nigeria and Kenya, where disposable income is increasing, along with the inclination to spend more on appearance. The Rise of Vegan Cosmetics Although cruelty-free products have been around for a while, vegan cosmetics products are now also entering the marketplace, not just from ethical retailers like Lush but also from other brands such as Kat Von D, Urban Decay, Barry M and Black Opal. Fresh Thinking The cosmetics market is notoriously competitive. However, an increasing number of companies are seeking to enter the category, particularly those focusing on anti- aging products. The cost of gaining a foothold in the market is high. New product research and development, manufacturing costs and limited raw materials are all barriers to entry. Additionally, the cost of advertising and promoting new brands and products in an already established market can be restrictive. 10 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Display Trends Forms of advertising most likely to influence the purchase of a new beauty product POP display undoubtedly has a key role in 25% influencing shoppers’ purchase decisions, with 17% of shoppers in the United States 22% 22% citing in-store displays as the most influential media in encouraging them to buy a new 17% beauty product. This is nothing new. Indeed, the role of display has always been fundamental to the success of cosmetics and skin care products. Given 9% the intensely personal nature of the relationship between the individual consumer and the 5% products, the opportunity to see, engage with, and compare products, has given the sector a Television Magazines POP display Online Coupons Other unique place in the world of in-store display. As a result, there has been continuing and high-level global investment in displays for ranges and newly launched or promoted Source: Videology (Amobee) – Statista 2018 products, as well as displays incorporating technology – either through the complexity of manufacturing techniques or, for example, Although many of the main brands are global, Taking Stock there is clear significant local influence, both Competition for space in-store has never the early adoption of digital screens to nationally and regionally, with regard to the been fiercer. A growing number of brands assist product choice, usage tips and displays produced for national markets. and continual new product development are lifestyle suggestions. swelling ranges, and this can mean some One of the big surprises in our findings was tough decisions in terms of stockholding the lack of uniformity amongst the main versus product information. brands. While the type of display was the same, the design and final execution was The pressure for displays to accommodate as different in the vast majority of cases. many different SKUs as possible is intense. But this leaves limited space on displays for brand, Testing Testing product and promotional messages. The Shoppers often visit a store as they can try irony here is that the wave of new innovative and test products, something they cannot products, such as multifunctional items, do online. It makes sense, therefore, that arguably need more detailed explanations. incorporating a testing facility, including mirrors, on cosmetics fixtures is the current Creative designers will work to accommodate single most important design consideration. both, although there has been little recent While some markets, such as Western innovation to more efficiently host the sheer Europe, have already fully embraced the number and range of products required. tester concept, most other markets are not far behind, with this requirement being seen in However, there has been a subtle change in ever more design briefs. some imagery. Pictures of people portraying brand values are being replaced by close- ups of make-up application, such as lips, highlighting the product’s attributes instead. 11 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS A Light Touch Digital Signage Photographers, models and artists have Digital screens are in short supply in the long used lighting to highlight or minimise cosmetics sector. It remains difficult to certain features. However, some lighting can update content and troubleshoot equipment be unflattering, and it is key that cosmetics remotely, which is the main barrier to adoption, counters use lighting styles that show off with unreliable in-store Wi-Fi often also products in the most complimentary way. causing issues. White lights will highlight a product once Ownership is also unclear, with brands applied and help shoppers to see its true tones and retailers unsure who should own the and textures. technology to provide the screens. All of this adds up to a likelihood that digital screens As such, illumination continues to play an will not be in wider use until these challenges important role in cosmetics wall and gondola are overcome. fixtures, where it has become the accepted norm. Indeed, any unit in a run of lit displays that does not have illumination is likely to be at a disadvantage. Displays without lighting around the exterior of the fixture are less likely to attract shoppers, while those with no illumination in the internal part of the unit will struggle to compete with adjacent displays The Role of the Retailer with lighting. Retailers in most markets still control carcass To achieve true standout in-store, displays dimensions for wall and gondola displays need to be illuminating to three times the traditionally used by legacy brands. However, brightness of their surroundings to draw many are now more open to newer brands, attention to a product. However, some especially those with innovative products, retailers are limiting the amount of illumination utilising secondary placement opportunities for permitted on displays, as they consider their displays with smaller footprints such as free- environmental credentials and energy bills. standing display units (FSDUs). Low-energy options such as LED lighting are likely to benefit from this trend, as such bulbs In fact, brands with new and trendsetting can use up to 80% less energy. products will often gain display space at the expense of more established brands, irrespective of the promotional support on offer. These displays can also more effectively convey a brand’s identity, away from the more formulaic banks of wall and gondola units. Men and Ethnic Groups While the male cosmetics market and markets in the Middle East and Africa are emerging as growth areas, this has yet to be reflected in display design. Limited space makes it difficult to accommodate a wider range of marketing messages without impacting on stockholding, so above-the-line marketing is rarely translated onto in-store display. Many countries in these regions still rely on the graphics and display-based communications supplied by a brand’s central distribution, and there is little adaptation for local markets. The exceptions are brands which have been created to cater specifically for women of color, such as IMAN Cosmetics and Beauty Bakerie, whose graphics and imagery reflect their target audiences. 12 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Market Data Dutch sales value and forecast growth 2017 sales EUR million Category Sales for Countries Surveyed 2022 forecast sales 505 550 539 580 EUR million In keeping with global trends, the skin care category has the highest sales value in all the 173 180 countries in which our research was conducted. Irrespective of country, strong sales growth is Cosmetics Skin care Deodorants forecast across the skin care, cosmetics and deodorant categories between now and 2022. Source: Passport category country reports – May 2018 French sales value and forecast growth Canadian sales value and forecast growth 3,800 3,396 2,750 2017 sales 2,200 2,199 2017 sales EUR million CAD million 2022 forecast sales 1,750 1,600 EUR million 2022 forecast sales 1,456 CAD million 645 690 367 440 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 German sales value and forecast growth Czech Republic sales value and forecast growth 4,800 4,048 2017 sales 5,900 EUR million 2017 sales CZK million 2022 forecast sales 4,800 4,816 EUR million 2022 forecast sales 2,300 3,960 CZK million 1,982 883 950 1,578 1,600 Cosmetics Skin care Deodorants Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Source: Passport category country reports – May 2018 Irish sales value and forecast growth Danish sales value and forecast growth 177 2017 sales 150 EUR million 1,900 2017 sales 142 DKK million 2022 forecast sales 1,636 117 1,400 2022 forecast sales EUR million 1,216 DKK million 57 47 420 460 Cosmetics Skin care Deodorants Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Source: Passport category country reports – May 2018 13 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Japanese sales value and forecast growth Spanish sales value and forecast growth 2017 sales 1,600 JPY billion 1,485 2017 sales 2,100 1,832 EUR million 2022 forecast sales 953 1,080 2022 forecast sales JPY billion EUR million 321 350 850 747 Cosmetics Skin care Deodorants 50 54 Source: Passport category country reports – May 2018 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 UK sales value and forecast growth Russian sales value and forecast growth 3,350 3,400 2017 sales 2,808 GBP million 175,000 2,399 2022 forecast sales GBP million 133,239 2017 sales 820 104,000 713 RUB million 85,610 2022 forecast sales RUB million Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 33,000 27,295 US sales value and forecast growth 23,500 Cosmetics Skin care Deodorants 22,000 Source: Passport category country reports – May 2018 South African sales value and forecast growth 18,368 16,794 13,000 2017 sales ZAR million 2017 sales 2022 forecast sales USD million ZAR million 8,309 2022 forecast sales 8,300 8,100 USD million 6,116 5,585 5,500 4,524 Cosmetics Skin care Deodorants Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Source: Passport category country reports – May 2018 14 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Category Sales for Other Key and Developing Territories Chinese sales value and forecast growth Skin care is also the best performer in other 296,232 main and emerging markets across the globe. Interestingly, only in the UAE do cosmetics come close to challenging skin care as the leading category. While continued growth is expected in all of these countries, sales in developing markets such Brazil, India and Nigeria are forecast to grow at a 187,413 significantly higher rate than most other markets. 2017 sales Australian sales value and forecast growth CNY million 3,450 2022 forecast sales 71,700 CNY million 2017 sales 2,400 2,437 AUD million 34,443 2022 forecast sales 1,810 747 962 AUD million Cosmetics Skin care Deodorants 418 450 Source: Passport category country reports – May 2018 Cosmetics Skin care Deodorants Indian sales value and forecast growth Source: Passport category country reports – May 2018 180,000 155,000 2017 sales Brazilian sales value and forecast growth INR million 2017 sales 113,925 2022 forecast sales BRL million INR million 17,500 2022 forecast sales BRL million 68,817 67,000 13,000 13,000 11,533 9,772 33,827 8,315 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Cosmetics Skin care Deodorants Indonesian sales value and forecast growth Source: Passport category country reports – May 2018 31,900 2017 sales IDR billion 19,982 2022 forecast sales IDR billion 13,000 8,600 6,498 3,433 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 15 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Italian sales value and forecast growth Saudi Arabian sales value and forecast growth 2,260 2,013 1,800 2017 sales 2,860 2017 sales 2,700 SAR million 1,538 2,473 EUR million 2022 forecast sales 2,161 2022 forecast sales SAR million EUR million 930 440 760 402 Cosmetics Skin care Deodorants Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Source: Passport category country reports – May 2018 Mexican sales value and forecast growth UAE sales value and forecast growth 44,800 2017 sales 41,700 MXN million 33,428 2022 forecast sales 1,300 1,310 2017 sales 29,464 MXN million AED million 1,060 1,107 2022 forecast sales 18,300 AED million 13,087 490 414 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 Cosmetics Skin care Deodorants Nigerian sales value and forecast growth Source: Passport category country reports – May 2018 2017 sales 212 NGN billion 2022 forecast sales 94 NGN billion 92 40 52 22 Cosmetics Skin care Deodorants Source: Passport category country reports – May 2018 16 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS In-store Research Types of store visited The following display characteristics were recorded as part of the research. Research Methodology 15% • Temporary or permanent The field research, data processing and analysis • Single or multi branding was carried out by POPAI UK & Ireland and other 5% • Type of messaging members of the Shop! Global Network, and • Brand imagery covered 177 stores in 13 countries. 47% • Promotion The teams visited 152 different retail chains • Product information and independent stores, covering drug stores/ 26% • Main colors used pharmacies, department stores, grocery stores and specialist cosmetic stores. • Text color 7% • Text direction The researchers took images of a cross section • Illumination of POP displays and store fixtures found in each store visited. They recorded the display type, its Drug store/pharmacy – chain • Mirror incorporation location and some characteristics and attributes Drug store/pharmacy – independent • Digital screen – interactive of the display, e.g. illumination or video screens. Department store Grocery store • Digital screen – non- Specialist cosmetic store interactive Further details about the display were then captured through analysis of the images taken, • Testers Source: POPAI such as font color and branding. • Movement • Sound The research is a snapshot of a significant selection of the POP display seen in the stores visited, but is • Aroma Number of stores visited in each country not an audit of the all the displays present in each • Augmented reality and number of images captured retailer. As such, the analytical results are indicative • Virtual reality (none found) and not finite. Canada 5 74 • Product displayed for purchase or display used to The research took place from January to March 2019. Czech just highlight product 20 167 Republic • Product demonstration by Displays with the following product store or brand representative Denmark 18 269 categories were included. Cosmetics Skin care France 15 200 The researchers surveyed all areas • Lipsticks • Skin cleansers (toners, of the stores visited and recorded a Stores visited • Mascaras creams) cross section of all the types of POP Germany 13 82 Images captured • Eye shadows • Face washes (masks, display found and their locations. exfoliator creams/gels) They found 4,311 items of cosmetic Ireland 17 244 • Foundations and skin care display – a significant • Body lotions • Powders (moisturisers, creams) amount considering not all POP Japan 6 103 display in each store was recorded. • Eyeliners • Self-tanning products • Blushers (creams, gels) These were either separate items Netherlands 15 164 • Bronzers • Hand creams fulfilling a display purpose in their • Primers and • Skin plumpers own right, or component display Russia 13 222 fixing sprays equipment used in combination to • Eye creams/gels create more complex installations or South Africa 7 125 • Accessories • Exfoliation creams/gels as part of shop-in-shop displays. (brushes, tweezers, • Accessories (cotton Spain 20 250 wool, cleansing wipes) One of the unique aspects of this brush research is the vast number of images cleaners) • Men’s care (in relation taken, with each image capturing one United 15 194 to the above) or more display types. Many of the Kingdom • Deodorants and body images cover multiple displays, so the United States 13 167 sprays (roll-ons, sprays) actual coverage of display items is of America over 3,000. Source: POPAI To gain access to these images, please contact your local Shop! Global Network or POPAI office. 17 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Display types and distribution 240 240 230 230 220 220 The research explored the types of display, how more display equipment in the cosmetics part of a chain also employed a large number 210 much was used and how it was distributed. It and skin care categories than did other retail and type of displays, more than twice as 210 200 was found that department stores had marginally channels. Pharmacy/drug stores that were much as their independent counterparts. 200 190 190 180 180 Types 170 and numbers of different display types found 170 160 160 150 150 140 140 Department store 130 130 120 Grocery store 120 110 Pharmacy/drug store – chain 110 100 100 Pharmacy/drug store – independent 90 90 Specialist store 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 er/ / l V ispl p ita tera en a n tur and r eta er yU g d C is la d C e la Bo a Fix la S p/ Fin ide ay on eos e Dis ctive En ap/G lay He p/Go nel Go nd d eH e e H ed r nit Co sel ard ic r le in ter y ck ck nn op Fix – Br ade ile de er ol D rto ter ee pla din pla – N l Vid ctiv id ar En d D do En Sid ondo – R ead nd Ca h ab pB Dig – In scre Ra Ra ad nd os p Ba s St rou a Pa Fre rap -In cr yC ea te En Gon Dis tan yT e Dis P m un er et yH Ca G o pla Bu o pla ing S Du E afl dd / ve or e- ap tur pla Dis nd Le La cti Flo dC d Dis Sta era ita En Dig e- Int Fre 240 240 230 230 220 220 210 Department store 210 200 Grocery store 200 190 190 Pharmacy/drug store – chain 180 180 170 Pharmacy/drug store – independent 170 160 Specialist store 160 150 150 140 140 130 130 120 120 110 110 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Ma ande e eta re an d/ elf Ov ge Dis ng it ter le d ip r x nit d r ler La n se ion d Ce Ov iler g – ipm y orm it l Sh ay e ign r lke ile be Bo r r Un rou de o Sh Sh ent a rS yo ag gin Inf Un Po Str – B Fixtu – R ixtu g H hea ca Ed ati et pi /U bb Eq erl pl s tat eta ran Ta Po sk op lay he or Sh ite lay ow th elf elf Wo elf F elf S ilin er –R Ot ateg elf Ba Sh wi –B ar/ ras isp in in isp rity Sh Sh u Sh Ma rB ter Pa rD nit lD C cu nit s ste ll U re ste Til Se ll U Po Sto Sh Te Wa Te Wa Source: POPAI 18 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS This is perhaps surprising, given the similarity Number of top ten display types used of the retail format. by retail channel Specialist stores also used a large amount of 520 POP, but grocers used relatively little, possibly 500 due to self-imposed restrictions on display use. Department store 480 Grocery store Specialist cosmetics stores had, on average, a third fewer displays than chain pharmacy/drug 460 Pharmacy/drug store – chain stores. However, they used a wider variety of 440 Pharmacy/drug store – independent display types. 420 Specialist store The most commonly seen POP types were a complete mix of three-dimensional display and 400 two-dimensional signage. 380 Simple, inexpensive posters were the most 360 frequently witnessed display types. However, 340 more complex and costly cosmetics testing stations were the second most common, either 320 as stand-alone displays or incorporated into larger display installations. 300 280 The popularity of both tester stations and smaller tester boxes emphasises the 260 importance of enabling shoppers to try cosmetics in-store, indeed much more so than 240 in most other fast-moving consumer goods 220 (FMCG) categories. 200 180 160 140 120 100 80 60 40 20 0 Poster Fixture Header – Branded Display Card Free-Standing Display Unit Main Fixture – Retailer Main Fixture – Branded Wall Unit – Retailer Tester Display Box Wall Unit – Branded Tester Bar/Station The next most regularly seen POP type was more two-dimensional signage in the form of branded headers on store fixtures and display cards located on different forms of Source: POPAI display units. The other top ten most common display types Digital screens were relatively rare, seen were all three-dimensional equipment: FSDUs, in only a total 3.3% of stores. Likewise, branded and retailer generic main fixtures and interactive POP was seen in only a very small wall-based displays, and shelf units. number of stores. 19 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Department stores tended to use more of the most popular displays, compared with other Average number of top ten display types used by retail channel channels for most display types. 0 1 2 3 4 5 6 7 8 9 10 11 12 However, there were some exceptions. FSDUs, Poster display cards and wall units were more popular in chain pharmacy/drug stores, along with branded Fixture Header – Branded equipment generally. Meanwhile, generic retail units were favored by independent pharmacy/ drug retailers. Main Fixture – Retailer Unsurprisingly, grocery stores led the way with Display Card generic main fixtures. The average number of displays per store varied Free-Standing Display Unit very little by country, with most deviating by only one or two from the overall average of 25. Tester Bar/Station Only three countries were significantly different: Main Fixture – Branded Germany and the Czech Republic had noticeably Department store less display, while South Africa had much more. Wall Unit – Retailer Grocery store The lower number in Czech stores was driven by Pharmacy/drug store – chain under-indexing in department stores, where they Wall Unit – Branded Pharmacy/drug store – independent had only a third as many displays as the average, Specialist store and chain pharmacy/drug stores, where they had Tester Display Box a quarter fewer displays. Meanwhile, Germany had significantly less display in all channels. Source: POPAI South Africa’s figure was due to much higher POP placement in chain pharmacy/drug stores. Average number of displays per store Canada 28 Czech 15 Republic Denmark 29 France 25 Germany 11 Ireland 28 23 AVERAGE Japan Netherlands 25 Russia 29 South Africa 34 Spain 25 United 24 Kingdom United States 27 of America Source: POPAI 20 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Display Locations Number of POP displays found The researchers found POP display in the outside of the main cosmetics and following locations across all the stores skin care trading areas visited. • Outside the store 4 • Store window External 6 • Store entrance • In the cosmetics and skin care section Window • End cap/gondola end Category Display Approach 16 • End cap/gondola side Women were clearly the target audience for • Wall display use in the categories surveyed, with Store entrance* • As part of a shop-in-shop display over half of the displays recorded being for • Outside of the main cosmetics and skin women’s cosmetics and over a quarter for care section women’s skin care. • At the checkout/till area However, the favorite location for POP display Display use by category 19 was emphatically the main cosmetics and skin care trading areas, with the vast majority of the 0.1% 4.0% Checkout/till area* 4,311 display items found there. 1.6% 8.7% 29 Several shop-in-shop displays were found 0.1% away from the main trading area, but very few Out of window or external displays were seen. category Within the main trading area, the most popular place for display was in, on or immediately 28.2% 57.3% adjacent to the cosmetics and skin care * Where these are not the main cosmetics and skin care end caps/gondolas. The next most popular trading area location was in or on wall displays, with 9% Source: POPAI positioned on end caps/gondola ends, 6% in shop-in-shops, and 3% at checkouts. Women’s cosmetics Women’s skin care Men’s cosmetics Men’s skin care Women’s & men’s cosmetics Unisex skin care Both cosmetics & skin care Source: POPAI 21 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS The cosmetics and skin care categories both took a very different approach to display by POP type. Cosmetics tended to use branded displays There was a significant variation in the ratio such as on main fixtures, wall units and header of cosmetics displays compared with those boards, while the equivalent retailer-owned for skin care by country. displays were preferred for skin care. In ten of the 13 countries surveyed, Tester equipment also varied. Cosmetics were The ratio of cosmetics displays to skin care cosmetics displays were predominant. much more likely to offer a tester bar or station, was fairly consistent across the retail channels. However, this varied from 81% in Canada with skin care adopting a tester display box. In fact, only independent pharmacy/drug stores to 55% in Spain. In Germany, France and differed, placing a much greater emphasis on Digital screens were also much more popular the Czech Republic, there was a higher skin care than the other retailers. within the cosmetics category. percentage of skin care POP. Display category use by type (%) Display category use by country (%) 0 50 100 Canada 81 19 Tester Bar/Station Czech Fixture Header – Branded 37 63 Republic Digital Video Screen – Non-Interactive Denmark 55 45 Poster France 42 58 Shelf Equipment – Shelf Unit Germany 40 60 Wall Unit – Branded Ireland 61 39 Shelf Strip Main Fixture – Branded Japan 70 30 End Cap/Gondola End Display Netherlands 68 32 Tester Display Box Russia 82 18 Free-Standing Display Unit South Africa 56 44 Wobbler Display Card Spain 55 45 Fixture Header – Retailer United Kingdom 60 40 Main Fixture – Retailer United States 76 24 of America Wall Unit – Retailer Cosmetics displays Skin care displays Use by cosmetics Use by skin care Source: POPAI Source: POPAI 22 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Display characteristics Permanent and temporary displays by category Permanent Versus Temporary Three-quarters of the displays seen % were permanent, with an even higher 18 percentage found in cosmetic displays. % 30 Department stores and specialist cosmetics and skin care retailers favored permanent displays slightly more than the other retail channels. There was little variation by country. The only exceptions were Russia and the USA, with 84% and 85% permanent display % respectively, and Japan, which had 70 significantly less, with just 55%. % 82 Skin care Permanent display Temporary display Cosmetics Source: POPAI Permanent and temporary displays Permanent and temporary displays by retail channel by country Canada 102 36 Department store 1144 261 Czech Republic 207 87 Grocery store 154 51 Denmark 413 101 Pharmacy/drug store 559 251 Permanent display – chain Temporary display France 279 99 Pharmacy/drug store 84 40 – independent Germany 109 38 Specialist store 1374 393 Ireland 386 90 Source: POPAI Japan 88 71 Netherlands 282 92 Russia 313 59 South Africa 168 69 Spain 399 106 United 267 96 Kingdom United States 302 52 of America Permanent display Temporary display Source: POPAI 23 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Highlighting Brands Interestingly, 16% of the POP displays did not feature any actual products for sale. Two-thirds of these were some form of tester or make-up application units, with the rest used to highlight products or for brand or product messaging. The majority of the displays without product were in the women’s cosmetics category with some in women’s skin care. Almost half of these displays were found in specialist retailers and 45% in department stores. There was a significant variation in the use of display with no product by country, varying from an average of nine per store in Russia to just one in Germany. Average number of displays per store with no product for sale Canada 5 Czech 2 Republic Denmark 5 France 3 Germany 1 Ireland 5 Japan 3 Netherlands 3 Russia 9 South Africa 3 Spain 3 United 5 Kingdom United States 3 of America Source: POPAI 24 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Digital Displays Digital displays were scarce. Only 142 examples were seen, of which just 13 were interactive. Department stores were by far the biggest users of digital display, with an average of 2.6 screens per store compared with just 0.8 per store in specialist retailers and fewer than 0.3 in the other retail channels surveyed. Ten of the interactive displays were in department stores and three in specialist retailers. Use by country varied quite significantly. More than two screens per store were seen in Japan and one or more in Ireland, Russia, Spain and the UK. No digital screens were recorded in South Africa. The average number of digital screens per store across all countries was 0.8. Digital screens were mainly used to communicate product information, seen on 80% of screens. Just over half displayed some form of brand imagery, while 46% performed both functions. Only four screens were seen to display promotional messages. Average number of digital screens per store Canada 0.2 Czech 0.4 Republic Denmark 0.7 France 0.4 Germany 0.1 Ireland 1.4 Japan 2.1 Netherlands 0.5 Russia 1.4 South Africa 0 Spain 1.1 United 1.5 Kingdom United States 0.3 of America Source: POPAI 25 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Let There Be Light? Despite its key role, lighting was seen on just 31% of the displays. Backlit illumination was the most popular, recorded in 1,328 displays. Of these, 52 used flashing lights, 134 shelf illumination, 75 were display with lightboxes and 28 employed Hollywood-style lighting. Department stores were by far the most prolific users of display with lighting, with an average of 20.9 displays per store. Specialist retailers ranked second, with 6.8 per store, followed by chain pharmacy/drug stores with 6.3 and grocery with 2.2 per store. Independent pharmacy/drug stores had an average of only 0.7 illuminated displays per store. The use of illumination varied by country. Russian and Danish stores had an average of 11.7 and 11.4 illuminated displays respectively, while Japan and Germany only had 3.7 and 3.2 per store. The most popular display types with illumination were backlit posters, branded fixture headers and tester bars and stations. Average number of illuminated displays per store Canada 8.4 Czech 4.3 Republic Denmark 11.4 France 7.3 Germany 3.2 Ireland 9.3 Japan 3.7 Displays with illumination incorporated Netherlands 8.7 Backlit Posters 248 Russia 11.7 Branded Fixture Headers 230 South Africa 9.7 Tester Bars & Stations 208 Spain 8.6 Branded Main Fixture 181 United 8.7 Branded Wall Units 154 Kingdom United States 8.5 Retailer Wall Units of America 102 Source: POPAI Source: POPAI 26 | STOREDITS | www.shopassociation.org 11.7
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Mirror Mirror In keeping with shoppers’ desire to try products, 451 displays incorporated a mirror and testing facilities. Not surprisingly, the majority of these were for cosmetics. Mirror use by retail channel was in line with the average number of displays seen in each channel, with the majority in specialist retailers and department stores. There was little variation in the use of mirrors by country, with the exception of Russia which had nearly twice the average number of displays with mirrors and the Czech Republic, which had just a quarter of the average. Sensory Touch Very few displays were found to incorporate sensory elements. Where it was present, smell was the most popular, noticed in 18 displays. Five had movement but none had sound. All those with smell were for skin care products, as was one with movement; the rest of those with movement were for cosmetics. Most of the 23 displays with a sensory element were found in specialist retailers, three were in department stores and just one in a chain pharmacy/drug store. Sensory displays were found in the Czech Republic, Denmark, France, the Netherlands, Russia, Spain, the UK and the USA. Virtual and Augmented Reality Seven augmented reality displays were found, but interestingly no virtual reality units at all. The augmented reality displays – three each of cosmetics and skin care and one combined unit – were all in department stores and Product Demonstration featured interactive digital screens. Five were in the UK, with one each in Ireland and the USA. Twenty-six displays had a staff member present. Twenty of these were in the cosmetics Finding Factices category and six in skin care, with six being used for product demonstration. Just 21 displays were either in the form of, or incorporated, a factice (a large display These were spread across 11 specialist version of the product). Fifteen of these were retailers, seven department stores, seven chain in the women’s cosmetics category and six in pharmacy/drug stores and one independent women’s skin care. Eight were there purely to pharmacy/drug store, and were found in highlight the product and had no product for Canada, France, Ireland, the Netherlands, sale. Ten were found in the UK and Ireland. Russia, South Africa and Spain. 27 | STOREDITS | www.shopassociation.org
STOREDITS SKIN CARE, MAKE-UP and COSMETICS Number of displays seen 140 122 115 115 88 79 79 76 72 71 70 64 63 63 60 58 53 50 50 48 48 47 47 44 41 Source: POPAI Big Branding Image Conscious Noting the different types of branding seen, 385 Imagery, either of products or lifestyle different cosmetic and skin care brands and own pictures conveying brand values, was the label brands were found on the displays. The most common form of messaging. Product vast majority of displays carried a single brand; information was also present, closely followed however, 533 had multiple branding. by promotional messaging. Text with some form of brand message was the least Excluding own label, 26 of the brands exceeded common, seen on only 3% of displays. one percent or more of the total seen. Multiple messaging was also noted, with some displays carrying a combination of the communication types listed above. Once again, department stores were more to likely have displays carrying messaging of some type. Use of display messaging 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Department store Grocery store Pharmacy/drug store Imagery – chain Product information Pharmacy/drug store Promotional information – independent Brand messaging Specialist store Source: POPAI 28 | STOREDITS | www.shopassociation.org
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