Physical retail stays key for UK prestige beauty sales, make-up is most dynamic category

By

Sandra Halliday

Published
Jun 26, 2017

Physical stores remain key to UK prestige beauty sales with rising turnover and more initiatives to engage customers face to face. But online growth is exploding, according to new data from research firm NPD Group.

Sales of prestige beauty through physical stores in Britain reached £2.2bn last year, a rise of 2%, as the in-store experience remained crucial for many high-spending customers.

But NPD said that e-sales rose 28% and reached a value of £379m. While this is only 14% of total prestige beauty sales, that’s a significant percentage and one that’s set to rise in the years ahead.

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Even though that percentage is set to increase, the researchers said the ability of e-stores to compete with the physical experience is limited. Retailers and brands have enhanced the in-store experience enough to keep face to face sales the most important channel.

NPD’s UK beauty director June Jensen said: “The retail sector has responded to the threat from online beauty retailers by enhancing the in-store offering. Trained consultants offer expert advice, there are also in-store events, roadshows and an interactive customer journey which not only enhances the retail experience it also increases footfall and retail sales. Many brands are now offering add-on services like spa treatments and makeovers. It’s something that online platforms simply can’t offer.”

The study showed that fragrance remains the leading prestige beauty category with sales of £1.1bn in-store, although growth here is low. Online, by contrast, scent sales surged 20% to £162m last year.

It was make-up though that proved to be the most dynamic growth category with sales of £668m in-store, a rise of 7%, and online sales of prestige make-up increasing by a stunning 45% to £120m.

Skincare sales were flat in-store with sales of £465m in 2016, but online sales rose 25% to £98m.