Woman Shopping Looking At Product

“It’s no secret – times are tough. However, far from retrenching, beauty retailers are investing in their stores and the shopping experience. It’s a courageous approach given that the beauty category has stiff competition for what little discretionary budgets consumers have left at the end of every month.” - Brid Costello, Senior Beauty Analyst

What we’ve seen:

  • In May 2011, The Perfume Shop opened its 200th store in the UK and Ireland. The chain is also planning to open a further 50 shop-in-shops in Superdrug stores in 2011. (Superdrug, like The Perfume Shop, is owned by AS Watson.)

  • In 2010, House of Fraser began introducing Apothecary, a shop-in-shop concept carrying niche skincare, body care, accessories, candles and men’s grooming products. The department store chain followed the launch with a website for Apothecary in 2011.

  • In October 2010, Harrods unveiled a new men’s grooming area called The Gentleman’s Lounge, while the store’s Apothecary space was revamped in mid-2011 and a Colour Emporium is scheduled to open by October this year.

  • In January 2011, Tesco launched salons in two of its stores, which offer hairdressing, nail and eyebrow threading services. Nail bars and threading services are also offered in four additional stores.

What it means:

  • Discretionary budgets remain squeezed and beauty brands have to compete ever harder with other lifestyle segments for consumers’ leftover cash at the end of the month. Delivering value for money or an affordable pampering treat will likely continue to be a key driver going forward for the industry.

  • Despite the gloomy economic times, retailers are continuing to invest in beauty. From Harrods’ beauty floor overhaul to Tesco’s introduction of beauty services in supermarkets, beauty remains a key area of development for both mass and luxury players.

  • Since women are holding ever more tightly to their purse strings, offering exciting in-store events and entertainment are more necessary than ever to tempt them to cross the threshold and enter beauty halls. Selfridges did just that when it opened a rooftop garden – complete with boating lake and cocktail bar – in July 2011 to fete the launch of the Truvia sweetener brand in the UK and proved it’s still possible to raise a smile despite the gloomy economic environment.

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