THE BEAUTY SECTOR OVERVIEW - Autumn 2018 - Linney
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THE BEAUTY SECTOR OVERVIEW Autumn 2018
CONTENTS INTRODUCTION 03 THE MARKET 05 CLEAN BEAUTY 12 GENDER AGENDA 25 FUTURE FORMATS 32 KEY TAKEAWAYS 39 2 INSIGHT | THE BEAUTY SECTOR OVERVIEW
BEAUTIFUL RETAIL A deep dive review into the beauty sector with a focus on challenges and opportunities within the market. How consumer lifestyles and attitudes are being reflected in NPD and the beauty retail landscape. 3 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Areas of focus.
THE MARKET
CLEAN BEAUTY
GENDER AGENDA KEY TAKEAWAYS
FUTURE FORMATS
4 INSIGHT | THE BEAUTY SECTOR OVERVIEW
THE MARKET 5 INSIGHT | THE BEAUTY SECTOR OVERVIEW
The UK health and beauty market is set
to reach £27bn by 2022. This is positive
growth as the struggling high street, waning
consumer confidence and restricted budgets
are impacting other market areas.
£27bn
Source: Global Data
6 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Look after your skin.
Skincare is set to be the fastest growing area
of health and beauty rising to 28% by 2022.
This growth is fuelled by innovation across
new product developments for masks,
serums and primers and skin preparation
becoming a new focus for consumers.
+28%
Source: Report Linker
7 INSIGHT | THE BEAUTY SECTOR OVERVIEW
What we know… Consideration:
The health and beauty market remains very Retailers should look at how to position health
female dominated with 78% of females buying and beauty products to male consumers
into the category compared with 42% of males. and use wellness and fitness lifestyles to
promote engagement with brands.
78% 42%
Source: Barclaycard
8 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Consumers purchase from UK: Distribution of spending on beauty
and personal care products 2017
specialists the most.
Specialists continue to strengthen their position
with ongoing investment into stores and
online propositions helping them to capture
consumers and boost market share.
Department stores have mirrored this, following
investment into the beauty environment.
Supermarkets and discounters have continued to
increase share as although their value proposition
makes the channel compelling for consumers,
low pricing could be hindering growth.
Specialists 36.8%
Grocers 29.7%
Department Stores 19.4%
Discounters 6.6%
Discount Grocers 3.0%
Others 4.6%
Source: Mintel
9 INSIGHT | THE BEAUTY SECTOR OVERVIEW
In-store beats online.
The majority of consumers continue to shop UK: “How have you shopped for beauty/personal
in-store for beauty and personal care products. care products in the last 12 months?” (October 2017)
39% of consumers say that convenience is key, with
store location important when choosing to shop
for products, and it is important for them to be
%
able to physically try on products before purchase
which the store environment is able to deliver.
In-store 90
Consideration:
Consumer engagement is key for beauty
brands both online and in the physical stores.
It should be made simple and interactive Online 34
with relevant technology applied to the
environment to elevate the experience.
Source: Mintel
10 INSIGHT | THE BEAUTY SECTOR OVERVIEWWhilst stores remain the primary purchase channel
with nine in ten consumers buying beauty products
in-store, the convenience of online shopping will
see a shift in buying behaviour. Online pureplays
will take advantage of this growing appeal like
Feel Unique, Cult Beauty and Look Fantastic.
9 in 10
Source: Global Data
11 INSIGHT | THE BEAUTY SECTOR OVERVIEWCLEAN BEAUTY 12 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Beautiful retail. Exploring the move towards a sustainable future of plant-based packaging and products with richer ingredients and less water. The beauty industry has not been widely celebrated for its eco-credentials, but this is changing. Cleaning up. This seahorse carrying a cotton bud photographed by Wildlife photographer Justin Hofman shows the harsh reality and impact of marine plastic pollution and how wildlife is interacting with the debris in the environment. 13 INSIGHT | THE BEAUTY SECTOR OVERVIEW
A clean makeover. Clean eating has been well documented with consumers but they are now turning their attention to clean beauty. It is no longer about what they eat but what they are putting on their skin and in their make-up bags. Consumers are not just Cleopatra’s radiant skin Consumers are detoxing thinking about clean eating, was said to be a result of their make-up bags but a clean beauty regime bathing in donkey milk 14 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Natural is not new…
Whilst natural beauty products aren’t something
new, they are shedding their hippy image.
£62M
Sales of certified organic health and beauty
products increased by 13% in 2016 to £62 million.
Source: The National Soil Association
15 INSIGHT | THE BEAUTY SECTOR OVERVIEWWhat we know…
70% 69%
of consumers are of consumers agree
influenced by health and that natural and organic
well-being benefits. products are key.
Source: Nielsen
16 INSIGHT | THE BEAUTY SECTOR OVERVIEWWar on plastics.
By 2042 the UK Government has declared to
eliminate all avoidable plastic waste. Steps are
already being taken in the right direction with the
success of reducing plastic carrier bags with the 5p
charge. Starbucks is the first coffee chain in the UK to
introduce the ‘latte levy’ – a 5p charge on single-use
paper coffee cups in a bid to reduce the overuse and
waste of 2.5bn disposable cups every year. In the
beauty industry, plastic micro beads can no longer
be used in cosmetic and personal care products.
Consideration:
With the focus on eliminating single use plastics,
what impact will this have on the beauty
industry across NPD and packaging design?
17 INSIGHT | THE BEAUTY SECTOR OVERVIEW120 billion units of packaging are produced
every year by the global cosmetics industry.
The cardboard that envelops perfumes,
serums and moisturisers contributes to a loss
of 18 million acres of forest every year.
120bn
Source: Zero Waste Week
18 INSIGHT | THE BEAUTY SECTOR OVERVIEWLeave H2O.
Beauty brands are starting to look at the
processes and ingredients that ensure products
66%
limit their dependency on water. Benefits
can include longer shelf life and excess
water use can topically dry out the skin.
Two thirds of the world’s
population may face
Consideration: water shortages by 2025.
Water is set to become a commodity but it is
the beauty industry’s most used ingredient.
27%
Of consumers are trying
to reuse or use less water.
Source: World Wildlife Fund/Mintel
19 INSIGHT | THE BEAUTY SECTOR OVERVIEWCleanspiration products.
Kajaer Weis premium sustainable Zao packaging is made from Floral Street packaging uses
packaging without aesthetic Bamboo – a true hero of recycled coffee cups and totally
compromise. Refills are made ecological sustainability. recyclable and biodegradable. The
in 100% recycled card stock. brand also promotes secondary use
of the box for storage of other items.
20 INSIGHT | THE BEAUTY SECTOR OVERVIEWUnilever’s Love Beauty, Love True packaging isn’t a standard Mel Millis gift boxes are made Planet proposition is focussed on plastic tube as it’s produced using from recycled paper and are small acts of love that make you sugar cane and is a material based totally biodegradable. Infused and the planet more beautiful. on 100% renewable sources. with wild flower seeds they The approach encompasses the can be torn up and planted. entire product lifecycle from how the product is used with its fast rinse technology to the packaging being 100% recycled plastic. 21 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Dior.
• Removed all cellophane and cardboard
wedges from packaging
• Product leaflets have been replaced
with a scannable QR code
• Swapped plastic display shelving
on counters with glass
• All formulae to contain 90% natural
ingredients by 2020
22 INSIGHT | THE BEAUTY SECTOR OVERVIEWTata Harper.
• Uses recycled glass
• Brand uses plastic derived from renewable corn
• Font on packaging uses soy ink
• Paper packaging used created with
100% post-consumer waste
23 INSIGHT | THE BEAUTY SECTOR OVERVIEWGuerlain.
• The pot is 60% lighter, halving the
cream’s carbon emissions
• Packaging redesign using a condensed square
box requires up to 40% less resin than round
packaging, and uses less space shipping
24 INSIGHT | THE BEAUTY SECTOR OVERVIEWGENDER AGENDA 25 INSIGHT | THE BEAUTY SECTOR OVERVIEW
A shift in mindset. Consideration: Gender boundaries associated with fashion and This change in consumer behaviour is beauty trends are becoming progressively blurred, an opportunity for beauty brands to with a fluid outlook that rejects rigid male/female engage with audiences in new ways across categorisation. The Selfridges Agender space products and packaging design. explored this concept in 2015 where men and women could shop together irrespective of gender. John Lewis has taken a step further by merchandising and branding the childrenswear department together and not segregated by pink and blue. Fashion and beauty brands are blurring the gender boundaries Selfridges Agender concept space Dual branding and merchandising in the John Lewis children’s department 26 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Generation Z.
Is widely considered the most gender
diverse generation and will account for
up to 40% of all consumers by 2020.
of 13-20 year olds say
someone they know uses
56% gender-neutral pronouns
‘they’ and ‘them’.
of Gen Z agree that gender
33% does not define a person
as much as it used to.
Source: Mintel
27 INSIGHT | THE BEAUTY SECTOR OVERVIEWBoy beauty. Men wearing make-up has remained largely niche, but ‘Boy Beauty’ has seen male bloggers become gender fluid muses for brands. They are democratising the use of make-up and changing the way the market talks about gender. More beauty brands are using male bloggers in their branding and marketing campaigns. 28 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Gender neutral products.
The every body ASARAI have designed Skin 689 clearly NGS – ‘Non-gender
soap bar by Meant is their packaging so that communicates on the Specific’ promotes
positioned as gender- it is neither masculine packaging that the product its products as being
inclusive care for all. nor feminine. is unisex and can be used suitable for everyone.
by both men and women.
29 INSIGHT | THE BEAUTY SECTOR OVERVIEWPanacea.
• Targets ‘gender agnostic’ skin
• Takes inspiration from the K-Beauty philosophy
with a simple 3-step product range
• A streamlined process for all your skin’s needs
30 INSIGHT | THE BEAUTY SECTOR OVERVIEW“We think people should buy
products for their individual needs
rather than being swayed by the
way the products are packaged.”
ASOS
31 INSIGHT | THE BEAUTY SECTOR OVERVIEWFUTURE FORMATS 32 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Tom Ford beauty. The luxury beauty brand has opened its first dedicated store in London featuring a range of interactive areas for engagement. There is a dedicated ‘colour room’ where customers can virtually try on shades from the lip colour collection using augmented reality. The space also has a ‘fragrance room’ with an ‘interactive scenting installation’ allowing customers to digitally explore perfumes, and there is also the opportunity to record how-to video tutorials for home use. 33 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Birchbox pop-up. The online beauty brand Birchbox, opened its first stand-alone pop-up store in the lead up to Christmas 2017 to showcase its products and services in a physical space. Located on Carnaby Street in London’s Soho, it replicated Birchbox’s subscription beauty box with a ‘build your own’ pick-and-mix approach. A gift wrapping station and wishing tree allowed shoppers to write personal wishes in the display, adding to the store theatre. The space encouraged exploration and enhanced the personalised element of gift giving. 34 INSIGHT | THE BEAUTY SECTOR OVERVIEW
“By creating the UK’s first online beauty
community and designing beauty
halls of the future, we are creating
easily accessible destinations to
explore and discover the latest exciting
brands and products. We know that
customers have high trust of peer-
to-peer recommendations and aim
to capitalise on the collective power
of beauty conversations to create
Beauty halls of the future. Europe’s largest beauty community.”
Debenhams’ digitally-integrated beauty halls Richard Cristofoli, Managing
and online community hubs are in response Director of Beauty and
to the new way customers say they want to Marketing at Debenhams
shop and experience being a focus point.
35 INSIGHT | THE BEAUTY SECTOR OVERVIEWBeauty club community. Debenhams Beauty Club enables users to give and receive real-time, peer-to-peer beauty advice, discuss the latest beauty trends and topics and build rewards, earning points and recognition for their contribution to the forum. 36 INSIGHT | THE BEAUTY SECTOR OVERVIEW
The beauty halls. The digitally enabled beauty halls opening at Meadowhall, Sheffield and the new flagship store in Watford have been designed to create a modern, welcoming and easy to navigate, interactive environment. Shoppers can experiment with products from established beauty houses and breakthrough brands. 37 INSIGHT | THE BEAUTY SECTOR OVERVIEW
Walgreens x Birchbox. “Our customers want to shop the most
sought-after brands in a welcoming and
The US pharmacy chain Walgreens has partnered
accessible environment, and the addition
with Birchbox the online beauty subscription to
launch 11 shop-in-shop beauty departments. The of Birchbox to our growing beauty
spaces will be branded Birchbox and will feature offering is a big step in delivering on
skincare, hair and make-up products from more our promise to differentiate and elevate
than 40 brands. Easy navigation and curated product
the beauty experience at Walgreens.
options will be key, with a grid-style framework
to help guide customers through their make-up This collaboration will help Walgreens
routines to make shopping missions easier. to continue to strengthen our beauty
offering and build our prestige portfolio.”
Richard Cristofoli, Managing
Director of Beauty and
Marketing at Debenhams
38 INSIGHT | THE BEAUTY SECTOR OVERVIEWKey takeaways.
THE MARKET CLEAN BEAUTY GENDER AGENDA FUTURE FORMATS
Consumer engagement
with the health and beauty Clean beauty is a health Gender fluidity is part Look beyond tradition
category is set to remain and environment extension; of wider context about and consider how the
positive. Whilst it is a diverse consumers are becoming being comfortable with retail space can be
and evolving market with both increasingly conscious yourself. Beauty is no optimised and a place
challenges and opportunities of the products they are longer confined to a for consumers to explore
within the sector, there are key using and their impact stereotype or mindset. a brand and products.
areas which can be optimised. on the environment.
Make the online and The quality of products New product Create reasons
physical channels and packaging should development for consumers to
where consumers shop not be sacrificed to opportunities include reappraise a brand
health and beauty promote clean efficacy. marketing to a previously and what it offers.
an experience where untapped community
consumers can engage of consumers. Products
with product ranges. and packaging should
hero a freedom of
purpose and identity.
39 INSIGHT | THE BEAUTY SECTOR OVERVIEWTHANK YOU. Disclaimer The materials set out in this document are concepts only (the “Concepts” and, in addition to any rights vesting in Linney Create (“Linney”), may be the subject of existing third party intellectual property rights. If the client wishes to utilise any of the Concepts, it should notify Linney in writing and Linney will then put in place the appropriate intellectual property searches (the “Searches”). The use of the Concepts is therefore subject to the results of the Searches. Linney shall not be liable for any damages, costs or losses whether direct or indirect (and including, without limitation, loss of profits, loss of business and loss of goodwill) arising out of any claim by any third party relating to the Concepts proposed by Linney where the client uses a Concept: (a) prior to Linney confirming whether or not the Concept is subject to existing third party intellectual property rights; and/or (b) in breach of existing third party intellectual property rights following the Searches. All Linney rights to proposed creative concepts and artwork belong to Linney unless paid for by the client. Should the client subsequently use any creative concepts or artwork without payment to Linney (unless agreed otherwise by both parties in writing), Linney reserves the right to take action to recoup, without limitation, damages for breach of intellectual property rights and/or any lost costs associated with the development of such concepts and artwork from the client.
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