Beauty and the multiples beast

With price and convenience on their side, major supermarkets are quickly catching up with chemist chains like Boots as the preferred purchase point for beauty products, but choice is a sticking point

News that Boots and Sainsbury’s have been in talks with the Government about housing GP surgeries and NHS clinics in their stores has caused something of a stir as detractors, including the British Medical Association, voiced concerns that we are moving towards privatising national healthcare services.

But the fact that Boots, which this week became Alliance Boots following its merger with Alliance UniChem, plans to move GPs and hospital consultants in its stores is a sign of the changing landscape of health and beauty retail.

Boots says the main aim of such in-store services is to offer consumers greater access to healthcare – and of course it would help boost business. New research from Ipsos MORI shows that consumers are increasingly turning to supermarkets for their beauty products, with more than 40% preferring to buy in a supermarket. So what lies ahead for chains that focus on health and beauty?

Although 60% of consumers cite chain stores, such as Boots the Chemist and Superdrug, as the type of shop in which they prefer to buy beauty products, supermarkets are closing the gap: 43% of consumers buy beauty products from them. These outlets are followed in preference by department stores (23%), independent chemists (16%) and home shopping, including mail-order and online shopping (13%).

With most supermarkets already extending their portfolios to include clothing and homeware, the study shows the big multiples have an opportunity to increase their share of the health and beauty market, particularly among young singles and families, by offering convenience, competitive pricing, and a wide range of brands.

Half of all singles (aged 39 or under, neither married nor co-habiting and no children at home) prefer to buy their beauty products at a supermarket. To appeal to this group, supermarkets must tailor their offer to meet singles’ top priority: choice. When shopping for beauty products, 62% of singles rank choice as the most important factor, compared with 49% for all consumers.

Nearly a half (46%) of supermarket consumers would welcome a wider choice of both skincare and cosmetics, and 39% would like to see more choice in haircare. However, this is even higher among 18- to 34-year-olds: 57% want to see more choice in the skincare aisles, 58% want more cosmetics offerings and 52% want more choice in haircare.

The specialist health and beauty chains clearly have the edge in the luxury beauty product market, but the convenience of supermarkets appears to be making inroads as it has in many other product ranges. Consumers, particularly those in their 20s and 30s, are happy to make their everyday health and beauty purchases at a supermarket if they can find the brands they prefer.

Choice is the most important aspect to many empty-nesters when shopping for beauty products as it is for other shoppers (47% compared with 46% on average). However, the research reveals that older shoppers are least likely to buy beauty products at the supermarket – perhaps out of habit or loyalty to the specialist chains. Just 31% of consumers aged 55 to 64, and 33% of over-65s, cite the supermarket as their preferred place to shop for beauty items, and the 55-plus age group is the least likely to desire a wider choice of skincare, haircare and cosmetic products available in supermarkets.

In contrast to the young singles and empty-nesters, most consumers with families value price over choice. Over two-fifths (44%) of families say the most important aspect for them when shopping for beauty products is the best price, compared with 35% of all shoppers. As supermarkets frequently offer competitive prices, they will likely appeal to budget-conscious families in this respect. As such, 49% of consumers with families prefer to do their beauty shopping at the supermarket.

Consumers are looking for an affordable range of products, in convenient locations while retaining the personalised shopping experience of a specialist store. While it’s unlikely that supermarkets will be able to devote as many resources as department stores or independent chemists to face-to-face service and advice, there are other ways they can maximise their health and beauty offerings. One tactic is to link health and beauty products to other product categories in ways that will appeal to consumers. For instance, vitamin supplements could be displayed near health foods, or cosmetics displayed near clothing.

In order to easily convey product benefits, supermarkets should stick to products that can be clearly linked to value, such as over-the-counter medicines, vitamin supplements, and trend-driven beauty items like nail varnishes, lipsticks and colour cosmetics. Add to these offerings a variety of brands, attractive price points, and smart product displays, and supermarkets can entice consumers to buy more than groceries.

– Tim Maton, director at Ipsos MORI’s retail division, contributed to this week’s Trends Insight

Supermarkets are encroaching not just in health and beauty, but in many other areas too. Who would have thought, ten years ago, that George at Asda would be a major clothing destination, up there with Next and Marks & Spencer? Supermarkets now offer wedding services and act as estate agents, which raises the question of cradle-to-grave solutions, with the introduction of funeral services. Today’s supermarkets would have us believe that they offer “one-stop living”, but don’t forget that multiples are happy to offer us a choice, as long as they control it. Consumer groups protest about the death of the local trader, but the fact we continue to vote with our feet and wallets means the supermarket juggernaut is likely to keep rolling for some time yet.

Steve Parker, director of ICM Research