The pharmacy channel appears as a more serious competitor than the web for the selective channel. Photo: © Tyler Olson / shutterstock.com

In a context where French consumers are increasingly sensitive to prices and promotions when health and beauty products are concerned, it is not surprising to see that high-end distribution channels are losing ground.

Indeed, the data revealed by Sandrine Cayeux and Anaïs Dupuy, Consumer Insight specialists at Kantar Worldpanel, during the seminar organised by FEBEA on current changes in the French beauty retail channels, show a steady growth of mass market channels and discount channels. On the contrary, the selective circuit (perfume stores and department stores) continues to lose ground, despite its resistance in the fragrance segment. However, the pharmacy channel remains very attractive and seems not to be impacted by this phenomenon. "In five years, the selective channel lost 2.5 million buyers and recorded a decrease of the average basket value," said Sandrine Cayeux.

Actually, the competition is tough. On average, French consumers visit 4 retail businesses for their beauty hygiene purchases out of a total of 220 theoretically available in this segment.

Pharmacies gain ground on the long run

However, according to Kantar, the pharmacy channel appears as the main competitor of perfumeries and department stores. A third of the people who make their purchases in the selective circuit also buys beauty and hygiene products in pharmacies. There are also 7.9 people who buy their products both in pharmacies and online, in addition to the selective circuit. Purchasing powers of consumers buying in the selective channel and in the pharmaceutical channel are also very similar. Nevertheless, customers of the selective channel are younger than those of the pharmacy channel since regular attendance of pharmacies starts with the first child.

The two channels have other similarities: they are appreciated for the variety of their offer, the in-store advice and the facility to find the right products on the shelves. However, perfumeries and department stores show better performance for the shopping experience, loyalty offers and the distribution of samples. The strengths of pharmacies are the advice by a professional and the quality of products.

Over the past five years, the number of buyers of hygiene and beauty products in pharmacies has grown steadily (with a penetration rate rising from 28% in 2011 to 29.9% in 2016) and a rise in the average value of purchase (69.3 euros in 2016 vs. 62.8 euros in 2011) and in the frequency of purchases.

Let’s note however that 60% of incremental volumes earned by pharmacies are a net gain for the overall market and not simply the cannibalization of other circuits. But when cannibalization exists, half of it is affecting perfumeries and department stores.

When asked by Kantar about the reasons to buy beauty products in pharmacies, French consumers first mention “the quality of products”, “the possibility to find skincare products suitable for sensitive skins" and "the quality/price ratio.

The pharmacy channel appears as a more serious competitor than the web for the selective channel, although online sales still have significant room for improvement in France, where they account for 7% of total beauty prestige sales, compared to 26% in the UK. According to Kantar, online buyers have a lower purchasing power than perfumery customers and are highly motivated by discounts. “The online channel has its own specificities it not just a complement to bricks-and-mortar beauty store," says Anaïs Dupuy.

In order to regain market share, the selective channel must rely on its best assets strengths, in particular on fragrances, which are the channel’s flagship products. The shopping experience is also an important asset where some improvements are possible, especially through even better targeted and customized samples, or even better loyalty programs.