Beauty Retail Trends
The world of retail keeps moving at lightning speed, I have been sharing more insights to more press than ever! I’ve put together this blog to give you a roundup of what’s been happening over the Summer.
Barbie-Mania Within Retail
How could you miss Barbie? An element of nostalgia, something shoppers always crave, is surrounding the Barbie movie, as it touches most people’s childhoods in one way or another. Mattel has modernised that nostalgia in a wealth of collaborations across many different categories and brands. By creating limited editions for everyone to love, and sticking to a genuine theme, they are bringing Barbie back to a range of different demographics and age ranges.
Collaboration has been a huge part of the launch. By allowing other brands to create products with the Barbie name they’ve accelerated the reach. It means other brands have marketed Barbie too! It will be interesting to see what Barbie products are marked down falter in the year, but I’d say most of the brands in collaboration [including Zara, Boohoo, ASOS, Melissa, Aldo, NYX, Mermade] will have done limited production runs of the products, so this will create a short term buzz that will, eventually, die down. After all, retailers want to sell out of these limited-run items, because it will create demand for any future collaborations they opt into. The biggest thing these collaborations are achieving is brand awareness towards this ‘cultural moment’, giving these same brands temporary higher status.
I talked about the pros and cons of Barbie-mania for brands and retailers collaborating with exclusive merchandise with The Business of Fashion and Beauty Matter
I am a big fan of collaboration, read an article for my top tips on p60-61 in Boutique magazine.
What Does The Body Shop Stand For?
Hot news right now… I don't think consumers understand what the true point of difference is for The Body Shop in 2023. It is a heritage brand but doesn’t have the ‘cool’ factor that it did in the 70s and 80s. The Body Shop was way ahead of the trends and the market when it launched, and for decades afterwards, but as the market caught up The Body Shop lost its stand-out factor.
There are many competitors for standalone Beauty on the high street, from Lush to Rituals and L’Occitane. I don’t think consumers know what The Body Shop stands for that's different to competitors now.
In my opinion, Natura started to make some progress with The Body Shop compared to L’Oreal, but by the time they acquired it the conscious Beauty market was becoming saturated. More brands than ever are focused on natural, clean and sustainable - they have almost become buzzwords or standard, so it’s no longer a compelling point of difference. When L’oreal bought the brand this was the prime time for making an impact as natural and sustainable Beauty was booming, it is now becoming saturated.
The Body Shop was revolutionary in the 1970s but there are now a number of brands with ethical values, and truly all brands must evolve their ethics to future-proof themselves. As the natural Beauty category has matured it is starting to develop into more niches and subcategories. One of the trends I predict will trounse ‘clean beauty’ in 2024 is biotechnology, harnessing the power of nature for lab-made skincare and body care. Customers want high performance, and although there is a desire for natural and sustainability, the consumer wants to know more - whether this is the potency of products and ingredients, the performance or provenance. The Body Shop needs to invest in further refining its point of difference, or risk being left behind as an overpriced ‘old school’ option for ethical-minded consumers.
I feel The Body Shop has also lost its original ethical consumer, as it’s been owned by larger corporations, it’s more transparent than ever who owns brands and this can put off the market segment who now have a plethora of brands to choose from that will align more closely to their values.
When Natura & Co sold Aesop earlier this year it naturally freed up focus for other brands in their portfolio, and I feel this is where The Body Shop could have thrived. Avon seems to have stolen focus and scope for innovation, with The Body Shop’s heritage revival tuning down over the past months.
Any company looking to purchase and save The Body Shop may be forced to diversify its offering and will need to reposition itself as a brand in a swiftly evolving market, as well as focus on a unique customer experience that gives customers a reason to enter their shops.
The most important question is were you in the white musk or dewberry camp?
Farfetch Taps Out Of Beauty
By far the biggest news of the summer! In the UK and US many retailers have seen the opportunity to expand into Beauty, as the Beauty category is buoyant in a recession or cost of living crisis and we are seeing a downturn in Fashion sales. However, it’s not as easy as a lot of multi-brand or Fashion retailers might think. Beauty retailing online is very competitive, and consumers have different beauty shopping behaviours compared to their fashion ones.
I can see various challenges around the Farfetch model; it’s important for a Beauty retailer to have a point of difference from other retailers, as they are selling a house of brands. This can be a number of things such as the curation of brands, the content they provide to help people purchase, exclusive product and brand launches, loyalty programmes, gift with purchases, beauty boxes etc. It takes time to build up authority in the Beauty space and to encourage customers to shop with them over other Beauty retailers.
Although Farfetch acquired Violet Grey before launch as a point of difference from other retailers, they lost sight of how to integrate these selling elements to a wider scale and to a broad consumer base. It can take time for Fashion retailers to onboard some of the more dominant Beauty brands, which ultimately gives authority and builds trust within the Beauty retail space, but also gives a reason for new customers to go and browse and shop with that retailer because they house established brands that shoppers already buy and aspire to, as well as Indie brands.
While Farfetch tried to entice their existing customer base to shop their beauty brands through marketing efforts, this has taken space and revenue away from a well-performing category (aka fashion). On top of that, the entry price points for Beauty and Fashion were so different that it made this customer transition take a lot longer than the retailer thought. It’s not necessarily the same customer shopping in both categories with the same retailers, which most brands take for granted.
So why are luxury fashion houses having success in beauty but Farfetch didn’t? Many high-end fashion brands have seen an opportunity to expand into Beauty, as the Beauty category is buoyant in a recession or cost of living crisis and we are seeing a downturn in Fashion sales. The Fashion houses are not necessarily selling beauty to the same customer as Fashion, it's an entry price point that appeals to a broader customer base. These Fashion houses have also created limited distribution of their Beauty brands to maintain some exclusivity and protect the brand equity and price it’s sold at. We have seen this with many brands with fragrance licences taking them back in-house to ensure exclusivity is preserved.
The reason this hasn’t worked for Fashion retailers moving into Beauty is the sheer number of brands they need to stock and how much discounting there is in the online Beauty market. When shopping online it’s easy to buy a brand cheaper at the click of a button unless a point of difference is made to the product assortment and customer experience.
It’s important for retailers to identify what they stand for, and what they can offer consumers. Are they trying to win by competing on price (mass), or do they want to appeal as a more considered luxury purchase? The latter requires a brand’s positioning, marketing and values to be more premium in order to be top of mind and ensure they are the retailer of choice.
In the year ahead there will be winners and losers, I predict mass and premium brands and retailers that have a clear point of difference from competitors will succeed. Mid-market brands and those who don’t evolve their positioning to a future consumer may struggle. It’s important for retailers to create loyalty, and a strong connection with consumers to stay in their field of vision.
The Importance Of Physical Retail In Beauty
Beauty is sensorial and different categories align to different senses, from fragrance and smell, skincare touch, texture and performance and makeup is visual creating a new look, identity and confidence as well as how it feels and stays put. There is much more to play with than other categories such as Fashion where an item is visually appealing and then based on how it fits and feels when worn.
Beauty is often at the centre of the store for a reason, it attracts footfall and dwell time, and customers want to touch, play and feel Beauty. When everyone has a device in their pocket and can order a product online, often at a cheaper price Beauty consumers still want to purchase in-store and have an opportunity to touch and feel a product as this obviously can’t be done online.
A breadth of choice provided by a bigger retailer works well for customers, which is why multi-brand Beauty retailers with physical stores are so successful, but this can also be overwhelming. When a retailer creates a strong edit of brands it can be appealing to customers and they trust their favourite retailer will source the best brands for them. Farfetch is not known for its edit of products but more as a marketplace where you can find everything.
Three of the biggest challenges I see in physical retail right now:
Not enough retailers are giving a different experience to the products that can be bought online
The customer is the expert, often so much research is done online before purchasing, that it’s hard for staff to be the experts
Staffing challenges - from budget cuts, increasingly hard to recruit and lack of investment in training
Three things retailers can do to address this:
Create experiences to surprise and engage customers that build loyalty and social sharing opportunities
Invest in training staff and give them the tools to better serve customers in the moment
Use technology to support staff in-store not replace them so they spend more time with customers and offer an elevated experience
Physical retail is still hugely important and in many categories outweighs digital sales, yet it often falls to the bottom of the list. Having worked at Selfridges for so many years the store experience is ingrained in me. There is a huge opportunity to integrate digital solutions to better serve customers in-store, and I don’t mean a self-serve iPad! ;) Customers crave human interaction, they go into a store for a reason - to touch, feel, try on and engage.
Beauty retailers need to, instead, create added value and experience for customers in order to get them to spend their money with them. You can check out my thoughts and more in the recent articles covered by Beauty Independent, Cosmetics Business and British Beauty Council on Farfetch.
So, How Can Fashion Retailers Tap Into Beauty Successfully?
Off the back of the Farfetch news, I spoke to Draper’s on how fashion retailers can tap into beauty successfully. In the year ahead, there will be winners and more losers. I predict that mass and premium brands that have a clear point of difference from their competitors will succeed. Mid-market brands, and those who don’t evolve their positioning to a future consumer, may struggle. Brands and retailers need to create loyalty, and a strong connection with consumers to stay in their field of vision.
What are the biggest learnings you can take from Farfetch’s experience?
Focus on the customer experience from strong brand and content curation to building loyalty to ease of purchase
Make sure you have a point of difference from competitors so the customer is compelled to purchase and come back
Evolve your positioning in line with consumer behaviour to future-proof your business
Winning At Retail
If your brand is not growing with retail partners then you have a problem! Retail is booming for many… I’ve been witnessing this and reading so much recently. It’s all to play for.
Teenagers screaming with delight as they jump off the train at Westfield with their Mums
A 30-person queue to get into the Sephora store
Multi-brand beauty retailers driving huge growth online while brand DTC channels are trading relatively flat
Queues at tills 5-10 deep on the quietest Sunday in August in London
Retail partnerships are the biggest growth opportunity for brands. The most established brands have the majority of sales from retailers (sometimes too dominant, DTC is still important). Although we are about to see Glosser launch with Sephora! Many of the fastest-growing indie brands I’ve seen have a majority of sales coming from retail partners.
What To Review Now
What’s your current sales channel mix?
Where do you want this to be in 12 months time?
What do you need to focus on or change to get there?
Make sure you win in retail…. I have an incredible opportunity that's tailored exclusively for brand founders and senior sales or marketing professionals who trade with large retailers like you.
What’s next for Harvey Nichols?
It was announced that Manju Malhotra, CEO of Harvey Nichols, resigned last week. I shared my thoughts with Drapers.
Harvey Nichols was committed to making changes, and a key objective of any turnaround is to have the senior management team aligned with the vision. If this wasn’t the case with the previous CEO then it’s inevitable that people leave. In order to return to profitability, Harvey Nichols’ next CEO will have to address why it fell behind its luxury department store rivals – and what it can do to distinguish itself.
Harvey Nichols has lost its positioning over the past 10 years, compared to competitors Selfridges and Harrods. It will now need to rediscover its point of difference in the market and give a reason for customers to shop with it over competitors in order to return back to profitability.
It's a highly-competitive end of the market and the new CEO will need to focus on creating a unique customer experience. For example, I can see an opportunity to play more to their ‘boutique’ feel and smaller-sized stores. Compared to Harrods and Selfridges shop floor sizes, it would make sense for Harvey Nichols to focus on a more personal and intimate experience for shoppers.
What Else Has Been Happening Over The Summer
It’s been a busy few months… From hosting an IRL event for my ‘trading with retailers’ insights to hosting a webinar shortly after, I was blown away by the interest received in this subject. This is why I’m hosting an interactive Q&A session with anyone who’d like to join on the 5th of September at 2pm BST. If you have any burning questions regarding trading with retailers, this is for you! Apply here.
Client-side I have been:
Educating global sales and marketing teams on building stronger partnerships with retailers and navigating buyer relationships
Working with an international trade body to training 60 brands on the UK retail landscape and entry strategy
Relishing mapping strategies in 1:1 strategy workshops
Working on events for the next six months and creating sponsorship opportunities to help me put on more events for you - If you know any businesses that would like to partner please send them my way or get in touch
Getting some epic feedback from a client at the end of our six-month journey together “I am already so much clearer on where I am heading and the difference between before we met and now is huge and the value you add with your incredible expertise is beyond measure. The before pic would be a cat with a ball of wool.... the after pic is a woman on a mission!”
This has been mixed with an energy slump and a lot of rest so I am ready for the next quarter. Every week I am learning more about how to best work and support myself to reach my goals..
Building Customer Loyalty Through Memberships
Luxury retailers are modelling themselves on membership clubs. It's funny this is where my worlds collide from spending 12 years at Selfridges and then time at Soho House.
Some of the more premium retailers don’t generally implement rewards, cash or money back, these can devalue a brand and also affect profit margin. To be an aspirational place to shop, retailers need to offer more than a cash incentive to shoppers, and instead focus on exclusive experiences, products and ranges that customers can’t find elsewhere. It makes sense for Selfridges and Harrods to run loyalty schemes differently.
We’ve seen a big rise in subscription models and monthly memberships. Positioning a membership over a loyalty programme will give the impression to the customer that this is more exclusive and they are part of a select group, and make them feel special. How these schemes are phrased can make customers feel different, and affect the brand’s perceived position in the market too. The ‘cash back’ craze is certainly fading.
For retailers, offers and memberships like these encourage shoppers to purchase more, and more often. We’ve seen retailers doing this for a while in the UK, with implementations like the Amazon Prime or Next membership, where customers pay a monthly or annual fee and get unlimited deliveries online, meaning that once you’ve signed up, your loyalty lies with that retailer. It forges a bond between retailer and customer, both to encourage repeat purchases and improve the customer's lifetime value.
Challenges that come to mind with this approach, for retailers on the delivery side, might be having lots of purchases at a low basket size. Less frequent purchases and larger basket sizes improve profit for online deliveries, and thinking about how to incentivise bigger "hauls" might benefit the retailer. With the more experiential side of retail booming, offering previews of exclusive products, spaces, pop-ups and events, will ultimately help retailers to identify demand, communicate more effectively with their top-tier customers and nurture relationships, ultimately providing a better experience for customers, or should I say “members”. Read more in Vogue Business.
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You Made It!
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Wizz x