Online boosts UK prestige beauty market but stores still dominate

By

Barbara Santamaria

Published
Jan 29, 2019

UK shoppers bought more prestige beauty products, such as fragrances from high-end brands, online in 2018, but the market still remains heavily reliant on physical stores, according to a new report from NPD Group, a market research company.

Online sales of prestige beauty products grew 13% last year, as shoppers took advantage of the wide range of businesses offering click & collect and next day delivery. Fragrance and skincare performed particularly well online, both reporting double-digit growth and helping e-commerce account for 20% of all sales in the prestige beauty market.

But representing the remaining 80% of the market, physical stores continue to make the majority of prestige beauty sales in the UK and their widely reported decline was likely behind the market’s struggles last year.

According to NPD Group, the prestige beauty market was worth £2.7bn in 2018, down from £3bn in the previous year.

June Jensen, director of NPD UK Beauty, said: “The high street market for prestige beauty has faced many challenges in 2018 from low consumer confidence, a decline in footfall, businesses falling into administration and Brexit which have all compounded the financial woes on the high street. There are many positives here; e-commerce is growing, and the high street has responded too, adapting its model to offer more experiential retail opportunities for customers.”

It seems shoppers still appreciate the hands-on approach that physical stores offer them, and outlets remain dominant during the festive season. In fact, bricks and mortar stores overperformed 51% year-on-year during the week of Christmas, NPD said.

“2018 certainly has been a year of upheaval on the high street, but prestige beauty retailers are resilient and are responding accordingly,” Jensen continued.

“Strong growth from fragrance late in the year demonstrates that there remains a significant demand for perfume on the high street. Sales were also helped by a late surge in last minute present shopping on Sunday and Monday pre-Christmas Day, and by consumers stocking up on their favourite scent in the Boxing Day sales. Naturally, strong growth online is good news for beauty brands, who are focusing on a multi-channel approach to reach their customer.”