Consumer expenditure on toiletries and cosmetics has never been higher. Consumers in the UK spent over &£8.5bn* on shampoo, make-up and skincare in 1998 – a figure that’s risen by 56 per cent since 1990*. The fastest growing market – male grooming – has seen a growth of over 20 per cent in some product categories in just one year (1998-99)*. This category explosion is creating a market in which retailers are clamouring for their share of bathroom cabinet.
The toiletries and cosmetics market was previously dominated by the big high street retailers such as Boots, but in recent years supermarkets have employed category expansion tactics to offer a range of brands and own-brands at competitive prices.
A recent analysis by consumer information company Claritas has identified some key consumer purchasing trends from over 500,000 questionnaires received in its 1999 autumn National Shoppers Survey.
When asked: “Where do you usually buy your cosmetics and toiletries?”, 60.3 per cent of the respondents said supermarkets.
Claritas account manager Gill Rees says: “In the past five years, supermarkets have doubled or even quadrupled the amount of shelf space dedicated to this category. Convenience and price are their key selling points, against which local retailers cannot compete.”
The squeeze on local outlets is clearly demonstrated by the Claritas data, with just 12.7 per cent of consumers identifying a local chemist as a retailer they regularly use.
Nonetheless, Boots claims 50.2 per cent of the market, followed by Superdrug with 34 per cent. Department stores, which traditionally stock the more exclusive, high-priced brands, were the preferred buying venue for 10.5 per cent.
The purchasing behaviour of men and women varies. Women are more highly represented across all retail categories but consumer behaviour for both genders follows the same broad patterns with a few exceptions.
Women are 25 per cent more likely to shop at Boots for their toiletries and cosmetics than men, and only 11 per cent more likely than men to shop at the supermarket.
Young men aged 18 to 24 are much more likely than their female counterparts to buy at the supermarket, who prefer to shop at Boots. Likewise females aged 65 or older are 20 per cent more likely to shop at Boots than men of the same age.
Age is another important discriminator which can determine consumer preference. The youth market, aged 18 to 24, prefers to buy toiletries and cosmetics primarily from Boots and to a lesser extent from the supermarket.
Rees says: “Boots has a larger share of the young adult market despite Superdrug’s distinctive and widespread TV advertising campaign aimed at this audience.”
Both 25- to 34- and 35- to 44-year-olds are most likely to shop at supermarkets. Those aged 65-plus are least likely to buy their toiletries there, preferring to shop at local chemists. But supermarkets boast the biggest share of the consumer purse, with a weekly grocery spend of &£90 and over.
The effect of social profiles on shop choice is also marked. Boots attracts young consumers, aged 18-24, who are higher earners with a household income of &£30,000 or more and who work in professional, senior management or office clerical positions.
The Superdrug profile has no strong age bias, but a distinctive income profile. Shoppers are primarily lower earners with a household income of &£10,000 or less and are most likely to be working in manual, factory or retail positions.
According to Rees, this is despite both outlets having a “value for money” positioning.
Not surprisingly perhaps, department stores have a well-defined niche: age 35-44, most likely to be earning &£50,000 or more in professional, senior or middle management.
Local chemists represent ten per cent of the market and have an older customer profile – those aged 65 and over. These consumers are most likely to shop at a local chemist because of convenience rather than choice – a fact borne out by the grocery stores at which they do their weekly shopping: Mace, Spar, VG, corner shop, Co-op and Budgen – none of which have extensive stocking policies for toiletries and cosmetics.
The market is growing rapidly, and so is the amount major players are prepared to spend on advertising to secure and increase market share. Figures from AC Nielsen-MMS show Boots has increased its overall media spend by over 35 per cent in the past two years, and Superdrug has injected an extra 23 per cent into its advertising in the same period.
But this is not a battle for customer ownership. Each of the leading retailers in this market has a distinct customer profile with little potential for overlap. Convenience, price and choice are key to the consumer – and they are selecting where to buy accordingly.
*Source: Marketing Pocket Book 2000
Factfile is edited by Julia Day. James Clarke, business development director of Claritas UK, contributed