Health and beauty ‘one of the most exciting’ retail categories, says expert

According to data and insights firm Edge by Ascential, the next decade of beauty will see clean, health and wellness continue to grow in importance across industry. Alongside this, e-commerce will become increasingly relevant, with the rise of Amazon​ and expansion of omnichannel strategies from key retailers.

Clean decade? Beauty retail to see ‘a lot of transformation going forward’​

Speaking to CosmeticsDesign-Europe, Florence Wright, retail analyst at Edge by Ascential, said beauty would be an interesting retail space to watch over the coming years, with plenty more retail-brand collaboration – offline and online – expected to drive important change.

“We track different categories for retailers, and health and beauty, specifically, is one of the most active in terms of initiatives, and consumer spend is growing very rapidly in this category. So, as an outlook and as a category to monitor, it’s definitely one of the most exciting and where we expect to see a lot of transformation going forward,” ​Wright said.

In particular, she said clean beauty was an increasingly important focus among retailers and brands - “it’s really been tracking upwards.”​ The likes of Sephora and Carrefour, for example, had invested in specialised stores for eco-friendly, clean beauty products, she said, and this type of initiative aligned well with consumer demand.

Many retail chains and supermarkets were also working hard at integrating beauty better into regular stores, she said – a move that worked well with consumers’ desire to “test and play”​. 

Specialised beauty retailers like Sephora were also heavily invested in the experiential side of shopping, using in-store augmented reality (AR) for shoppers to test make-up using mobile phones, she said.

A digital beauty push? Brands need to ‘get to grips’ with consumer patterns​

Boris Planer, director of Go-to-Market Insights at Edge by Ascential, said purchasing patterns in retail had evolved drastically with the rise of digital, influencing everything from how consumers heard about or discovered a product, through to the purchase decision, review or replenishing of that product.

 Wright agreed, noting this was a “key challenge”​ all retailers were currently “trying to get to grips with”.

“There’s just so many different touchpoints to get hold of – all intermediaries, social media points – and then a shopper might be going into store and then back online,”​ she said.

‘Look to China’ to understand the future of beauty retail​

Planer said for retailers and brands wanting to get a sense of how the market may take shape up in the coming decade, the best bet was to look further afield.

“If you really want to see what’s going to hit the mainstream in Europe, look at China,”​ Planer said.

“It’s a very advanced market and, of course, very liberal so you can see all sorts with shopper data that you can’t do in the EU. But they’re pushing the e-commerce approach.”​ On Alibaba, for example, he said each online shopper had a unique user ID, providing a very holistic view of shopper habits.

How digital might influence retail in Europe, he said, would be in splitting the market into ‘discovery’ and ‘routine replenishment’ missions.

Predictive retail is on the horizon – test and learn launches needed​

“The discovery mission will happen in stores, through online experiences that try to replicate the offline experience with AR and sharing functions where you can get feedback,”​ Planer said. But the replenishment mission, he said, would become increasingly automated.

“One of the new things we see breaking ground slowly is predictive retail – where algorithms will tell Amazon or a retailer that by day ‘X’ a person may have used up product ‘U’. It’s really important for brands to be very visible on the platform in subscription schemes so they’re considered in this initial basket-building process.”​

Wright said that for beauty brands, it would be worthwhile entering such programmes with a small percentage of a portfolio just to “test and learn”.​