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OVERVIEW


considered as a consequence to be triggered, which more and more often does not take place at the same time as the visit within the store, but only later and maybe online, as long as the experience was a positive one.”


Bringing digital in-store “There’s a real opportunity now for retailers to ramp up their digital integration inside the store to create complementary experiences and touchpoints with the online channel – for example QR codes, digital sampling and merchandising,” says Wright. “Increasingly stores will need to work in tandem with online, acting as key fulfillment centers/pick-up points, and showrooms for physical products which can then be easily accessed via digital apps/channels and convenient fulfillment options.” Wright also notes that she expects to see further retailer partnerships with delivery intermediary players, building on those that have already emerged, for example Sephora with Instacart and Watsons with Grab. “These intermediaries are becoming more important sales and engagement touchpoints for shoppers, and a channel which brands will need to have a handle on or strategise for.”


Likewise, beauty retailers will pursue ways to bring the elements and experiences of in-store beauty shopping to the digital world, by leveraging technology throughout the discovery, purchase and post-purchase engagement, says Alexis DeSalva Kahler, Senior Research Analyst, Retail and E-commerce at Mintel. “Features such as virtual try-on and virtual product finder tools, shoppable social media content, virtual consultations and events will continue. These enhancements to the online experience will help the beauty category continue to grow digital sales in the years ahead, especially as consumers grow more accustomed to engaging online.” Rather than the death of retail, the beauty industry can expect to see the birth of true omnichannel, a 360˚ experience that seamlessly merges bricks and clicks for an enhanced and consistent customer experience


ACTION POINTS


The storm caused by the pandemic, with the consequent crisis that hit physical retail and the new e-commerce boom, is shifting the focus of the store from sales to experience. Fiona Sartoretto Verna, owner, Sartoretto Verna


Omnichannel is a word that has been used for many, many years but it’s absolutely crucial for stores to seriously think about the full 360˚ customer experience. Wizz Selvey, founder & CEO Wizz&Co


Retailers are focusing on safe in-store


services. Boots has now re--introduced premium make-up testing


BEAUTY RETAIL: THE KEY CHALLENGES


For all the difficulties that beauty retail faced in 2020, it was a year that also kickstarted its transformation. Retail is being reimagined, remodelled and reclaimed. And while the main focus was on developing e-commerce and the online shopping experience last year, physical retail is up next, with glimmers of an exciting future already emerging. Nevertheless the challenges are not to be underestimated. Alexis DeSalva Kahler, Senior


Research Analyst, Retail and E-commerce at Mintel, tells Cosmetics Business: “Consumers’ disrupted routines have caused changes to the types of beauty products they use and how often. Retailers will face challenges getting consumers to stores and growing basket size and purchase frequency.” Florence Wright, Senior Retail Insight Analyst at Edge by Ascential, adds a further issue:


“As shoppers cautiously ease back into pre-pandemic behaviours such as visiting physical stores, one of the key challenges for beauty retailers will be optimising their store networks to ensure shoppers feel safe, without losing the in-store experience.” Boots, for example, has now re-introduced measures to enable shoppers to test premium make-up using disposable applicators dispensed by a beauty advisor, while continuing to also offer touch- free consultations it introduced earlier last year. The UK retailer was named as the safest place to shop on the high street, according to Kantar data (3 weeks ending 17 May 2020). Going beyond safety, experience is now crucial in retail. By focusing on this, retailers can


not only give shoppers reason to shop in-store, they can reward them for doing so. And the focus is now on delivering more. Wright says: “With shoppers now accustomed to online discovery and purchasing, in-store experiences will need to focus on added benefits such as services (1:1 consultations) and product try-ons. Retailers should also be exploring potential opportunities to partner with brands to drive exclusivity, promote excitement and support the return of footfall to stores during the next year.” Retailers will need to ensure they are able to attract consumers who might have become


less engaged with beauty products as they stayed at home, or are more hesitant to return to stores. Matt Maxwell, Strategic Insight Director at Kantar, says: “The biggest challenge for retailers will be to win back the older demographics, as spend on beauty among UK shoppers aged 55+ has dropped by £333m in the past year – the most of any age group – pulling down the overall performance of the category. With a large percentage of this age group now vaccinated it will be fascinating to see how they respond to the restrictions on the high street having been relaxed. Department stores, and retailers like Boots, which attracts an older demographic, will be relying on this to turn their fortunes around.” Challenges for online retail will persist too. The biggest one remains how to translate


‘high-touch’ consumer experiences online to allow for discovery of new products to influence and increase order size, says Nicole Armstrong, Executive Strategy Director at digital agency R/GA. “These high-touch moments allow for personalisation and physical interaction with a product and beauty experts, which can be difficult and expensive to implement well. Equally, brands need to find ways to stand out in this highly cluttered and fragmented market. This is particularly challenging for legacy brands as the sector is flooded with new entrants that are well versed in social media and that have an incredibly high following.” As physical retail opens up again, a drop in the record-levels of e-commerce sales is


expected, but beauty still has high growth potential online, says DeSalva Kahler: “Nearly 40% of online beauty shoppers in the US express more comfort shopping online than in the past, an indication of the possibility for digital growth.”


cosmeticsbusiness.com


May 2021 cosmetics business 5


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