BEAUTY IN 2018 - A retail year in review
BEAUTY IN 2018 - A retail year in review
Online thrived in 2018, Amazon has become the biggest seller of beauty products online, establishing itself as a major player in the online beauty market with a 36% market share in the US. The company was valued as the world’s second $1 trillion, only falling behind Apple.
Meanwhile, Chanel Korea launched a dedicated online store, Estée Lauder Companies reported thriving Q4 sales boosted by its online arm, Colgate-Palmolive invested in online start-ups to push e-commerce sales, Beiersdorf collaborated with Netease Kaola to develop its online presence in China, while Alibaba expanded its presence in Pakistan with the purchase online retailer Daraz.
The online stronghold was to the detriment of department stores, increasingly losing out to online and fresher retail approaches. In the UK House of Fraser battled all summer to avoid collapse while others are undergoing brand revamps in order to win back consumers. John Lewis and Debenhams are two examples, while Saks Fifth Avenue has opened up a 32,000-foot ‘experiential’ beauty floor at its New York Flagship, featuring 120 brands and a significant focus on beauty services and treatments.
Positive signals for the high street come from a recent report by CEW UK, showing that the UK beauty market is outperforming other retail sectors, reporting sales growth of 18 percent for premium department stores and 9 percent for traditional specialist retailers between 2015-2017. Online beauty sales reached £1.1 billion, while sales within specialist retailers such as Boots, Superdrug, and The Body Shop exceeded this, rising from £3.4bn to £3.7 bn in the two-year period.
Third Wave retail, pop-ups, and the rise of in-app shopping on social media channels such as Instagram and Facebook are gaining space. Pop-ups are short-term retail avenues that lure in consumers with a whole plethora of exciting, interesting, and experiential experiences beyond traditional shopping
Beauty brands want to attract millennials and Gen Z’s and Nars, L’Occitane, MAC, Chanel, Crème de La Mer, Elizabeth Arden are just some of the brands this year on trend with the offerings ranging from cafes, mural artist collaborations, beauty vending machines, rainforests and most recently Estée Lauder’s Hong Kong pop-up counters featuring Quantum Human technology allowing users to create their 3D avatar that will be able to carouse through a fairy-tale setting, featuring an array of products in a 22-second long virtual reality film.
In 2019 we expect a continuation of pop-up shops and experiential beauty, hand in hand with a continued evolution of the in-app and online purchasing channels. The growing beauty market is an opportunity for the high street to think differently and innovate before it is too late.