WHY BEAUTY IS A SMART INVESTMENT FOR SUPERMARKETS

WHY BEAUTY IS A SMART INVESTMENT FOR SUPERMARKETS

UK consumers spent an estimated £5.1 billion on beauty products and this figure is expected to rise by 17.2% in the next five years. In contrast, an under-performing personal care market is set to expand just 1.6%.

The personal care sector continues to suffer from the downward pressure on prices, as consumers seek value for money when buying everyday toiletries like haircare and bath products. Meanwhile, new product trends and product innovation, alongside a continued appetite for prestige products, is boosting value growth in the beauty sector. This is creating a resilient demand for colour cosmetics and skincare, with UK consumers becoming willing to trade up to get hold of the latest products.

The polarised performance of these two sectors means that the beauty market is a far more attractive prospect for UK retailers. As result, a greater focus on beauty represents an unmissable opportunity for supermarkets who look to reduce their reliance on an underperforming personal care category.

How can supermarkets become a credible destination for beauty shoppers?

The most important change supermarkets will need to make in order to become credible beauty destinations is with brand assortment. Research shows that after low prices, brand selection is the most important factor to UK consumers when deciding where to shop for beauty and personal care products. As a result, developing a differentiated and compelling range of brands is hugely important.

Mirroring the food assortment available within such stores, supermarket retailers are likely to benefit from a “Good-Better-Best” strategy when developing beauty ranges, with a compelling range of own-label, mass market and premium brands likely to encourage shoppers to trade up their beauty purchases.

Sainsbury’s is giving its beauty offer a makeover, trialling larger, department-store-inspired aisles, dedicated beauty advisers and a revamped own brand cosmetics line. Image credit: Sainsbury’s

In recent years, there has been a major shift towards more experiential in-store beauty environments. Retailers are experimenting with everything from in-store cafés and beauty treatment facilities to more immersive product discovery, which often utilise in-store technology to create a seamless offline and online experience. As a result, consumer expectations are heightening and if the supermarkets are to truly compete in the beauty sector, they will need to match the kind of experience that these stores are offering.

Meanwhile, another way for supermarkets to strengthen their position in the market would be to offer more expertise in-store. Mintel’s consumer research found that more than half of UK consumers find the choice of beauty and personal care products available overwhelming, highlighting an underlying demand for advice.

Across Europe, few supermarkets have done as much as Mercadona to become a beauty destination. The Spanish grocery retailer has become well known in the beauty industry for its quality products at low prices, which are highly praised in the media and often recommended by beauty bloggers. However, it also worth noting the success of the discounters in recent years, with both Aldi and Lidl continuing to strengthen their position in the beauty market by offering shoppers premium own-label products at an affordable price point.

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