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Yeah baby! Time-pressed and beauty- obsessed, Brits love to indulge in all things new when it comes to beauty products and services.
When Victoria Beckham’s latest haircut is front-page news and a $34 anti-wrinkle cream causes stampedes on the High Street, you know you’ve landed in a country obsessed with beauty.
The world’s fourth-largest beauty market, the United Kingdom’s cosmetics and toiletries retail sales totaled about $16.33 billion in 2007, according to Euromonitor International. That figure is expected to rise by over 10 percent by 2012 to reach $18.17 billion. “It’s a very buoyant market,” says Ian Bell, senior analyst at Euromonitor, adding saturation and a grim economic forecast due to the impact of the credit crunch may slow the pace of growth somewhat over the medium term. “When we look back we’ll realize how good it was,” says Bell.
A study by Ipsos Mori found that 54 percent of people surveyed this February believe the general economic condition of the country will get worse over the next 12 months. That pessimism, however, needn’t spell disaster for beauty brands, say executives. “Predictions for the economic climate will be challenging of course,” says Angela Rowley, general manager of Estée Lauder U.K. “But we see beauty impacted less than capital goods, such as electronics and furniture. Makeup—and lipsticks in particular—always do well in recession as an inexpensive way of achieving a feel-good factor.”
British women certainly like to feel good about their appearance and, in particular, how young they look for their age. Skin care is a driving force, hitting $3.28 billion in 2007, a 7.3 percent increase year-on-year and a 63 percent increase over 2001, according to Euromonitor. Facial care accounted for $2.56 billion in 2007 and is set to grow to $3.29 billion by 2012. Helping drive growth is an aging population. The resident population of the U.K. was 60,587,000 in mid-2006, according to the Office for National Statistics. In 2006, one in six people were aged 65 or over, while the average age was 39.
“[Customers] will go to any depths to find the elixir of youth,” says Daniela Rinaldi, head of perfumery and concessions at Harvey Nichols. “Compared to the rest of Europe, people in the U.K. have longer working hours and among the highest disposable incomes,” says Paul Deacon, U.K. marketing manager of Aveda. “There are a lot of cash-rich and time-poor people so there’s a demand there for a quick fix.”
While a 2007 study by Mintel International found that almost one in three adults believe they need to pay more for products that really work, U.K. consumers don’t always rely on price tags to indicate results. Last year, Boots the Chemists’ private label No. 7 Protect & Perfect serum became an overnight phenomenon after it was featured on a BBC documentary. At one point, the retailer had a list of 100,000 customers waiting to get their hands on the product, which costs about $34 per 30-ml. bottle. More recently, Tri-Aktiline, a $50.50 wrinkle filler by Good Skin Labs, a brand from Lauder’s BeautyBank division, has become a must-have. “Price is not necessarily a driver if the consumer believes in the efficacy of the product,” says Rinaldi. “They’re picking up on trends before they even hit the market.”
Indeed, shrewd shopping has become a hallmark of trend-conscious Brits. “The U.K. beauty consumer has become more aware of ingredients and skin care technologies and is asking the right questions,” says Maria Hatzistefanis, founder of treatment brand Rodial. “They’re very savvy about what products can and cannot do,” agrees Jill Hill, managing director of Aspects Beauty Co., a distribution company, and Juniper, a manufacturer. “I hear customers talking about nanotechnology and sodium palmate.”
Thanks to exhaustive coverage in the press, consumers are also well-versed on the relative merits of high-tech ingredients versus natural alternatives. “Green considerations are increasingly top-of-mind for many women and these can override other choice factors, including celebrity/brand-expert endorsement or product claims,” states a Mintel report.
The natural market’s growth here has been driven by consumer concerns about synthetic chemicals, particularly parabens, sodium lauryl sulfate and sodium laureth sulfate, according to a study by Organic Monitor. Marketers have been quick to cater to that anxiety. In the first quarter of 2007, U.K.-based brands produced 19 percent of the 1,053 new organic and natural beauty products introduced worldwide, according to Mintel. Margo Marrone, co-founder of The Organic Pharmacy, contends brands will hit the jackpot here by creating results-oriented products based on natural ingredients. “Someone using an anti-aging product doesn’t want a lavender cream,” she says.
In parallel, results-oriented items, cosmeceuticals and potent doctor-backed brands are also generating excitement. Rinaldi recalls a waiting list for Athena 7 Minute Lift, an anti-aging cream promising a facelift in a jar, that started even before it arrived at Harvey Nichols in December 2007, for instance.
Meanwhile, makeup with a natural bent has also been creating waves. “Mineral makeup has been a big story over the past 12 months, incorporated everywhere from foundations to eye shadows,” says Natalie Moon, marketing manager of Rimmel London at Coty U.K. The total makeup segment is growing at a steady clip, generating sales of $2.5 billion in 2007, up over 8 percent year-on-year, according to Euromonitor. It’s expected to reach $2.89 billion by 2012. Mascara, in particular, posted strong sales, growing by 12.5 percent in the mass segment and 7.5 percent in premium, according to Bell.
“The time for glamour is back,” says George Hammer, chairman of Urban Retreat, a U.K.-based spa, salon and retail chain, adding young British girls like to experiment with makeup colors and accessories such as false eyelashes. “[People here] are inspired by the catwalks,” says Nicky Kinnaird, founder of Space NK. “They’re more aware that beauty is an extension of fashion.”
Consumers also tend to take a fashion-oriented approach to fragrance, either opting for the must-have scent of the moment or a hard-to-find scent by a niche brand. “We don’t have a tradition of having a love affair with one fragrance that lasts throughout our lives,” says Hill. In 2007, fragrance sales totaled $1.55 billion, a 2.5 percent increase, according to Euromonitor. Of that figure, premium women’s fragrances accounted for $729.3 million, while premium men’s scents generated sales of $562.5 million.
U.K. health-and-beauty market by retail channel, 2007
(Source: Verdict Research)
Grocers: 46 percent
Health and Beauty Specialists: 40 percent
Department Stores: 8 percent
Other: 4 percent
Home Shopping: 3 percent
The Fame Game
Critiquing celebrity style—or lack thereof—is a national pastime in the U.K., thanks to the country’s infamous tabloids and weekly magazines. If Kate Moss wears a star-spangled shirt or purple mascara at the weekend, it’s fairly certain such items will be hot property by Monday, for example. For that reason celebrity endorsements, and celebrity scents in particular, are big business here. At The Perfume Shop, which has over 150 doors in the U.K., sales of such products represent 15 to 20 percent of the chain’s total sales. And it’s not just Jennifer Lopez, Christina Aguilera, Moss and their ilk who are getting in on the act. Local luminaries, including WAGs (or soccer players’ Wives And Girlfriends such as Coleen McLoughlin) and Page-Three girls (models who appear topless in tabloid newspapers like Katie Price, aka Jordan) have all introduced successful products. They’ve also been responsible for other beauty fads. WAGs, whose soccer player partners earn millions of pounds annually, championed an uber-groomed trend, including year-round fake tans, French manicures (on fingers and toes), hair extensions and preternaturally coiffed locks, while uber-WAG Victoria Beckham’s graduated bob (or “Pob”) spawned an instant haircutting craze