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BEAUTY’S FAVORITE RETAILERSExclusively for CEW membersOctober 2017www.klinegroup.com
ContentsOVERVIEWSPECIALTY STORESDIRECT SALESSNEAK PEEK AT OTHERSREPORT SOURCE1
Beauty’s Favorite RetailersSolution-basedE-aggregatorsPEACH & LILYConvenientE-commerceAMAZONPlayful SpecialtyStoresLUSHBeauty’s BoutiqueRetailersBATH & BODY WORKSOnline ExclusiveFavoritesGLOSSIERProgressive MassMerchandisersTARGETDemonstrative HomeShopping NetworksQVC NETWORK2
ContentsOVERVIEWSPECIALTY STORESDIRECT SALESSNEAK PEEK AT OTHERSREPORT SOURCE3
Beauty’s Fastest-growing Channels – Specialty Stores and Direct Sales Lead the WaySales Change by Channel, 2015 to 2016ProfessionaloutletsMassmerchandisersDepartment storesSpecialty storesDirect salesFoodstoresMass merchandisersMANUFACTURERS’SALES OF COSMETICSAND TOILETRIES BYRETAIL CHANNEL,2016SpecialtystoresDrug storesFood storesDrug storesProfessional outletsDepartment storesDirect salesChange, %Source: Kline’s Beauty Retailing USA: Channel Analysis and Opportunities4
Specialty Stores: Focused on the ExperienceCreate Open-sell EnvironmentTrendsettersFocus on New NaturalsExpand FootprintOffer Solution-basedApproachCreate the ConsumerExperience5
Cosmetic Specialty Stores record a robust growth of almost 20%COMBINED REVENUES OFOVER 5 BILLIONAND3,000 STORES IN THE UNITEDSTATESSource: Kline’s Beauty Retailing USA: Channel Analysis and Opportunities6
Beauty’s Leading Boutiques – Vertically Integrated StoresCOMBINED REVENUES OFOVER 5.3 BILLION,GROWING AT 7%,AND NEARLY 5,000 DOORSSource: Kline’s Boutique Beauty Retailers: Channel Analysis and Opportunities7
Foreign Boutiques in the United StatesOrigin: IsraelSABONOrigin: South KoreaNATURE REPUBLICOrigin: NetherlandsRITUALSNiche: Premium bath and body productsEntered the United States in 2012Niche: Premium skin careOrigin: South KoreaOrigin: UnitedKingdomOrigin: FranceTHE FACE SHOPNiche: Mass skin careLUSHNiche: Masstige body careL’OCCITANENiche: Masstige to premium skin careThe influx of foreign vertically-oriented beauty retailers to the United States in thepast decade has positively affected this segment’s growth8
ContentsOVERVIEWSPECIALTY STORESDIRECT SALESSNEAK PEEK AT OTHERSREPORT SOURCE9
Direct sales is comprised of four basic CIAL SELLINGINFOMERCIALSHOME SHOPPINGNETWORKS10
The Shopping Shift: From Traditional to Alternative Channels 3.2%U.S. cosmetics andtoiletries CAGR,2011-2016 2.5% 20.6%Brick and mortar CAGRE-commerce CAGRTHE FACE SHOP STOREDREAMSTORE WEBSITESource: Kline’s Beauty Retailing USA: Channel Analysis and Opportunities11
The Lure of Purchasing Online: The Amazon EffectEFFECTTHEAmazon leads as an online retailer.80millionAMAZON PRIMEMEMBERS IN THEUNITED STATES IN201778%OF THOSECONSUMERS PAYFOR PRIME TO GETFREE 2-DAYSHIPPING74%OF U.S.CONSUMERS HAVEPURCHASED FACIALSKIN CARE ONAMAZONAMAZON BEAUTYSources: Business Insider, 2/2017; Emarketer, 10/2015; Kline Beauty Devices Global Consumer Insights Survey, 4/201712
The Lure of Purchasing Online: Exclusivity63%ONLINE BRANDSOF U.S. CONSUMERS HAVE PURCHASEDFACIAL SKIN CARE FROM A BRAND WEBSITEFLASH SITESONLINE OFFERSTarte Flash Sale, Online OnlyGILT: 30 Off 80Honest Beauty Sale,Online OnlySource: Kline Beauty Devices Global Consumer Insights Survey, 4/201713
The Lure of Purchasing Online: Solution-based E-aggregatorsCURATED, SOLUTION-BASED PRODUCTS ARE OFFERED BYONLINE SITESTHE K-BEAUTY WAVE PURE PLAY RETAILERSSOKO GLAM WEBSITEVIOLET GREY WEBSITE14
InfomercialsInfomercial brands expand to other channelsInfomercials grow, record solid growth Guthy-Renker’s brands continue todominate the channelProblem-solving approach and useof celebritiesProactiv expands into Amazon,launches at Ulta, and starts sellingon QVCin 2016Change of manufacturers’ sales ininfomercial brandsCrepe EraseXOutMeaningfulBeautyProActivSource: Kline’s Cosmetics & Toiletries USA15
Home shopping network brands record solid growthHome Shopping Network Channel Records 10% growth from 2015-2016KEY HOME SHOPPING NETWORK BRANDSCHANGE IN MANUFACTURERS’ SALES IN HOMESHOPPING NETWORK BRANDS, 2015 TO iconeMDSource: Kline’s Cosmetics & Toiletries USA16
ContentsOVERVIEWSPECIALTY STORESDIRECT SALESSNEAK PEEK AT OTHERSREPORT SOURCE17
Mass Merchandisers Gain Traction by Taking on New Brands and ConceptsMass merchandisers, including big box retailers, warehouse clubs, and dollar stores, record over2.5% growthWALMART TARGETWalmart upgrades the beauty portion of its Mixes standard national beauty brands alongwebsite, incorporating new brands and playingwith ones customers might not expect to find atwith key trends.Target. Dedicated section for truly natural brands. Key player in migrating luxury trends to mass,such as the K-Beauty trend.Source: Kline’s Beauty Retailing USA: Channel Analysis and Opportunities18
Drug StoresChain drug stores continue their quest for beauty consumersUPGRADING THE LOOK OF BEAUTYDEPARTMENTSEXPAND PRODUCT OFFERINGS Beauty differentiation strategy, which elevatesthe in-store beauty environment. Walgreens continues to operate Look Boutiquesin 55 flagship locations.19
Department StoresDepartment stores face challenging times as they struggle to attract millennialsEXPAND IN-STORE BOUTIQUESBluemercury in Macy’sSpace NK in Bloomingdale’sCREATE A SHOPPER EXPERIENCENordstrom POVNordstrom Beauty Concierge20
ContentsOVERVIEWSPECIALTY STORESDIRECT SALESSNEAK PEEK AT OTHERSREPORT SOURCE21
Leading marketers use Kline’s insights on the beauty retailing market because of:REGULAR SUPPLY OF UP-TO-DATE INSIGHTSLATEST TRENDS AND CONCEPTSDATA PUBLISHEDANNUALLY 6 PURCHASE CHANNELS 18 SUB-CHANNELS 25 PRODUCT CATEGORIESEXPERTISE INSPECIALTY RETAILING VERTICALLY-INTEGRATED STORES COSMETIC SPECIALTY STORES PERSON-TO-PERSONIN-DEPTH RETAILER PROFILESEASY ACCESS TO DATA22
DATA SOURCE: Boutique Beauty Retailers: Channel Analysis and OpportunitiesA detailed independent appraisal of the fast-moving specialty stores channel. Takes a close look at fourkey markets where many leading boutique retailers are headquartered: France, South Korea, theUnited Kingdom, and the United States.This report helps you:Assess the size and evolution of theboutique retailer channelQuantify sales and door counts for key andemerging retailer chainsUnderstand various productivity measures,including store sizes, traffic patterns, andnumber of sales associatesBase year: 2016, with forecasts to 2021Published: January 2017LEARN MORE 23
DATA SOURCE: Beauty Retailing USA: Channel Analysis and OpportunitiesAn insightful analysis of the challenging and ever-changing retail landscape specific to beauty andpersonal care products.This report helps you:Understand key purchase channelsQuantify industry sales by purchase channelDiscover the up-and-coming retailersExplore business practices and strategies ofspecific types of retailersBase year: Data included for 2011 to 2016,with forecasts to 2021Publication: June 2017LEARN MORE 24
Kline’s Dedication to the Industry50 YEARS OF50 EXPERIENCE INYEARSOFTHE BEAUTYEXPERIENCEINDUSTRY INTHE BEAUTYINDUSTRY25 YEARSOF25 COVERING THEYEARS OFPROFESSIONALCOVERING THESECTORSPROFESSIONALSECTORS1stTO REPORTON FirstVARIOUSNICHETOREPORTON VARIOUSMARKETSNICHEMARKETSINVITED TOSPEAK AT ALLKEY INDUSTRYEVENTSINVITED TOSPEAK AT ALLKEY INDUSTRYEVENTSON BOARD OF DIRECTORSMEMBERS FOR30 YEARS25
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight andknowledge that helps companies find a clear path to success. The firm has served the managementconsulting and market research needs of organizations in the agrochemicals, chemicals, materials,energy, life sciences, and consumer products industries for over 50 years.For more information, visit www.KlineGroup.com.KRISTY ALTENBURGSANDY TRIMARCOKey Accounts Manager, North Americat. 1-973-435-3367e. Kristy.Altenburg@klinegroup.comNew Accounts Manager, North Americat. 1-973-435-3455e. Sandy.Trimarco@klinegroup.comLINDA VIGLIONEPILAR PARDONew Accounts Manager – Professional Beauty,North Americat. 1-973-435-3392e. Linda.Viglione@klinegroup.comSenior Account Manager, France and Spaint. 32-2-776-0737e. Pilar.Pardo@klinegroup.comKRISTINA ZABLECKEPIERRE ZOLGHADRISenior Account Manager, EMEAt. 32-491-44-8636e. Kristina.Zablecke@klinegroup.comBusiness Development Manager, Asia-Pacifict. 86-21-6012-6500e. Pierre.Zolghadri@klinegroup.comYUKI ADACHISÉRGIO REBÊLODirector, Japant. 81-3-3242-6277e. Yukihiko.Adachi@klinegroup.comPresident, Brazilt. 55-11-3079-0792e. OBAL HEADQUARTERSKline35 Waterview Blvd.Suite 305Parsippany, NJ 07054Phone: 1-973-435-6262Fax: 1-973-435-6291
Amazon leads as an online retailer. 80 million AMAZON PRIME MEMBERS IN THE UNITED STATES IN 2017 74% OF U.S. CONSUMERS HAVE PURCHASED FACIAL SKIN CARE ON AMAZON AMAZON BEAUTY 78% OF THOSE CONSUMERS PAY FOR PRIME TO GET FREE 2-DAY SHIPPING Sources: Business Ins
