Next and Boohoo investing in own-brand beauty is wise move says analyst
Retail giants such as Next and Boohoo Group are making major moves in the own-brand affordable beauty arena. And that makes good commercial sense, GlobalData said this week, as it predicted the online health & beauty market will be worth £6.6 billion by 2025.
Next and Boohoo’s decision to launch their own-brand health & beauty ranges “is a wise investment as the UK online health & beauty market is forecast to flourish, growing at a compound annual growth rate (CAGR) of 10.4% between 2019 and 2025”, it said.
And while Next is a physical retailer and has opened physical beauty spaces, the strength of both companies online is crucial to the beauty market.
GlobalData said the two “will now be able to meet the increasing demand for convenience as shoppers will be able to buy clothing and beauty items in one place, while appealing to those looking to cut back”.
Next has developed Woah, its own brand of vegan skincare, featuring 16 affordable products suited to the majority of skin types. And Boohoo has launched its own vegan range of make-up comprising 50 products that are cruelty-free.
Importantly though, both are able to capitalise on beauty demand across the price spectrum. As well as their affordable lines, Next operates its standalone Beauty & Home stores selling premium brands and Boohoo-owned Debenhams is a major player in upscale beauty.
Juliet Cuell, Retail Analyst at GlobalData, said: “By branching out into own brand beauty, these two retailers are taking a step in the right direction as shoppers are set to trade down on health & beauty products as they face increased living costs in 2022. While many may turn to discounters, including Savers, Aldi and B&M, own-brand health & beauty ranges will appeal to those who want to spend less, but still want to purchase items with certain product credentials including vegan friendly, which discounters tend not to offer.”
Boohoo has priced its products to ensure that it caters to young consumers who typically spend less on health & beauty, particularly those who want to recreate social media trends.
Cuell added: “Boohoo could suggest make-up products that would go well with partywear pieces when shoppers are browsing clothes to encourage impulse purchases.”
Next has priced its Woah skincare range below Boots’ No.7 range, even though Woah products have a benefit that many consumers have said they’d pay more for — being vegan friendly.
GlobalData even thinks that “if Next expands its new skincare range, it has the potential to steal spend from Boots, as 29% of its shoppers already shop at Next for clothing”.
Cuell also said: “Online pureplays including Feelunique and Lookfantastic – which do not currently have their own brand – must not become complacent or they risk falling behind. To differentiate from clothing retailers’ own brand beauty, online pureplays should develop ingredient-focused (such as vitamin C), organic skincare and make-up that is affordable.”
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