Increased concentration
If the concentration was already high in selective distribution and mass-market, it is growing increasingly in the hitherto spared circuit of pharmaceutical sales. More than fifteen pharma chains were created in recent years and are uniting a growing number of outlets. Eurostaf also notes that groups of pharmacists are developing "real branding policies, thus improving their visibility on the beauty market." [1] In parallel drugstores chains are continuing their deployment driven by supermarkets in particular, (the Leclerc Group as a leader) who are developing their networks at a rapid pace.
However, the difficult economic environment and the high cost of market entry, have not deterred newcomers from making their entry. Among them, alternative brands like Mademoiselle Bio for natural cosmetics, specialists of ethnic cosmetics like Mix Beauty and Colorii, but also retailer brands, like Kiko, the Italian brand positioned on low prices, or pure Internet players. These new actors benefit from a unique positioning while on the side of generalists, " The convergence of offer strategies blur the brands image and strengthens price competition by trivializing the offer."
Distributor brands
"Concerning the offer, the growing number of exclusivity agreements, the positioning in dynamic segments (bio, ethnic cosmetics, doctor brands), the expansion to drugstore products and the development of services are dominant trends." observes the research firm.
Another underlying trend, the growing investment in private labels (PLs), which are mushrooming, with in particular the recent launch in mass market of Carrefour’s Cosmetics Design Paris, and the announced one of the Nocibé brand in selective perfumery, and which are getting more sophisticated, with an increasing segmentation, like at Sephora, where the private label is managed like a national brand.
The direct consequence, according to Eurostaf, being that in a context where the available retail shelf space is necessarily limited, "the product delisting of national brands is increasing in all circuits."
Optimization of networks and of merchandising
In such a competitive environment, networks try to differentiate themselves through their outlets and through the development of new concepts. With more or less success: "from 5 to 10% growth in sales for Marionnaud’s renovated outlets, 5% for Parashop and Galeries Lafayette. For others, like Carrefour Planet, results are disappointing."
The aim for brands is to increase the average basket, seen as a strategic priority to increase the brand loyalty indicator [2] and thus brand loyalty. Apart from optimizing merchandising, this also involves some investment in customer relationship management with the improvement of the quality of the database, the sophistication of loyalty programs (customized programs "premium" cards, offered services) and the use of new technologies (Internet, social networks, blogs) to continue to enrich the relationship.
All this may require some choice making. Thus, emphasises Eurostaf, Passion Beauty has announced the termination of its magazine to focus resources on customer relationship management.
