What’s Next: Understanding the shifting beauty market
There’s no getting around the shift to the online market — for any industry. Brick-and-mortar stores continue to grab the lion’s share of sales, but there is a steady stream of dollars seeping out of the mass market beauty category. According to new research from GMDC, traditional destinations for beauty consumers are trending down, with beauty sales in the drug channel declining by 16.1% and sales for mass merchandisers declined 2.2% in 2014. It’s not just the e-commerce boom — it’s a shift in the attitude and values of the customer.
The convenience of drug stores has always been a major draw for customers, but that too is diminishing as grocery stores, dollar stores, clubs and warehouses expand their beauty offerings and give consumers the option to combine their shopping for food and necessities with picking up their beauty items —without having to make a separate trip. Drug stores and mass market channels need to find new ways to connect with customers to overcome the appeal of all-in-one warehouse operations and grocery stores, as well as the increase in online sales.
Research from GMDC has indicated that the best way to do this is for retailers in the drug and mass market channels to be responsive to the changing attitudes of a new generation of consumers. Millennials are accustomed to a level of ease and convenience never before experienced by previous generations, with 85% of them owning smartphones and using technology to purchase products as soon as the need arises. They also are keenly aware of business practices that are harmful to the environment and harmful to themselves.
GMDC believes that the solution for drug and mass market channels to regain their sales in beauty is one that embraces a holistic approach to beauty and wellness, and that creates a tailored, customized shopping experience for its customers. Brands and products that can offer transparency and be perceived as well-made and straightforward in their approach to health and wellness can gain the consumers trust — and their dollars.
The new generation of customers also is accustomed to easy access to products and services that meet their specific needs. Brick-and-mortar sellers will have to find new ways to engage with consumers. GMDC suggested that millennials will spend more if they feel that their shopping experience is unique to them and can be shared with others. This can be accomplished with innovative and personal in-store experiences, such as product demos and trials.
Understanding the shifting ethnic landscape is another factor in effective marketing. Hispanic-Americans represent 17% of the population and, according to GMDC, make up a growing consumer segment that is spending 34% more than expected based on their population size. GMDC also stated that Asian-Americans represent a major consumer demographic, spending 70% more than the average share of the U.S. population on skin care preparation products.
What’s Next is a weekly feature of Drug Store News, written by consumer beauty blogger Lonni Delane. The goal is to help give beauty merchants the cutting edge they need to stay ahead of the latest and greatest beauty trends.