Beauty in rude health
Nobody needs to be told that retail has had a tough time over recent years but one category – outside of the essential that is food – seems to be pretty much bullet-proof and its future also looks positive because younger consumers regard it as a non-negotiable purchase.
We are talking health and beauty (H&B), which continues to defy economic and political pressures, with many consumers unwilling to forego their daily H&B rituals. This is most prevalent among the younger grouping, with 72% of Gen Z’s regarding beauty, grooming and wellness as an essential part of their everyday spending rather than a luxury and a further 26% are prioritising it over other discretionary spending, according to RSM UK’s Consumer Outlook.
Subscribe to TRBThese youngsters are also prolific spenders, with the survey finding 30% of Gen Z’s are outlaying more money than a year ago (at £42.50 per month) compared with 17% across all consumer groups (at £32.40). At the extreme end 5% spend over £100 a month.
Needless to say this represents a life-affirming serum to H&B-focused retailers who are enjoying boom times while other categories can only look on with envy. While virtually all divisions of luxury group LVMH have suffered badly since the pandemic the exception is Sephora that has been on a global tear. In the UK the company has opened 16 stores in a little over three years and its latest gambit is with a small format boutique outlet, with the first recently opening on London’s Carnaby Street. More are planned to open imminently.
Sephora is certainly helping drive footfall at shopping malls, with Hammerson recently highlighting its Cabot Circus development in Bristol had enjoyed 45,000 week-on-week footfall growth after Sephora opened a new store at the site. It is also the location of Boots’ second beauty-only store that opened its doors in May and highlights the high street stalwart’s accelerated commitment to H&B that has seen it provide a platform for small independent brands to flourish.
Meanwhile, The Very Group continues to build-out its online beauty offer that has recently included adding Estée Lauder to its mix. The company recognises a strong H&B offering attracts greater numbers of customers to its sites who might then shop across its core fashion proposition.
Such is the power of H&B globally that in the US a batch of retailers not recognised for their beauty offerings are increasingly gunning for the category. At the bottom end of the market Dollar Tree is benefiting from the trend of social media and digital influencers to encourage people to experiment, which has aligned well with its ‘thrill of the hunt’ approach to shopping.
It is with the behemoth Walmart where the ongoing buoyancy of H&B is highlighted most clearly. The retailer has broken out of its no-frills service model to bring in trained specialists for its beauty aisles where they can offer a rich experience to shoppers. This move will encompass over 425 stores this year after a successful year-long trial. Walmart is also remodelling many of its stores in order to bring the beauty departments towards the front of the outlets where it can better showcase the range.
Not only is the company committing resources to its physical beauty offering but it has also introduced AI features that embrace its multi-channel proposition with tools built to boost product discovery and decision-making. Such confidence in the health, beauty and wellness category is well supported by the ongoing commitment by younger consumers to spending on their H&B rituals, which looks set to ensure this remains a buoyant area of retail across the globe for the foreseeable future that can ride out political and economic issues.
