Will the retailers' price wars camouflage the need to sort out their beauty offers? Wonders Steve Gibbons
One Sunday last month Tesco demanded that all its store managers come into work and prepare for war. Tesco has opened up a new front in the supermarket price wars, and it looks like it's going to be very bloody. Meanwhile, in France Carrefour is joining forces with Boots in what looks to be a mirror of the latter's tie-in with Waitrose in the UK.
It's no surprise that in the face of ever increasing austerity the multiples are going to battle on price. Given commodity inflationary pressures, whether this ends up as a smoke and mirrors exercise or offers real savings to hard pushed consumers is yet to be seen.
However, what we will almost certainly see is a switch from consumers buying proprietary brands to retailers' own branded products. And this represents a fantastic opportunity for the retailers' beauty offers. We'll only be able to answer the extent to which this opportunity has been fully grasped when the economy swings back in a positive direction. Will the retailers be able to hold on to these new customers or will they revert back to their normal brand preferences when their purse strings loosen a bit?
Despite all their best efforts, the UK multiples have traditionally struggled to give their beauty offers any real sense of purpose or point of differentiation in the marketplace.
The multiples are brilliant at food; it's their heartland. Asda is an abbreviation of Associated Dairies (or Asquith & Dairies by other accounts), originally a collective of canny hard-nosed Yorkshire farmers. William Morrison started life as an egg and butter merchant in Bradford. Tesco was founded by Jack 'stack'em high, sell'em cheap' Cohen, an East-End barrow boy off the Well Street market. And Sainsbury's started as a fresh food retailer in London's Drury Lane. They know everything about grocery but when it comes to beauty it's another matter.
This is the perennial dilemma that they face. Framing their beauty offers in a truly differentiating manner has proved very difficult, as there's so little for them to clutch onto. Furthermore they have the challenge of finding one thread that can run through a very diverse range of different categories, a problem that largely the proprietary brands don't have.
In recent years the nearest any of them got to it was Sainsbury's with its Active Naturals range which drew strongly on the retailer's food heritage using an ingredient story - at the time a brilliantly simple idea. But although the brand still exists within Sainsbury's, it couldn't be more apologetic if it tried.
It's this lack of confidence that bedevils each of the retailers. In their desire to follow the trajectory of proprietary brands they often run the risk of missing the fact that building credibility in beauty is a reiterative process and that they need to more boldly stick their colours to the mast.
We undertook an exercise recently where we visually demonstrated to a multiple retailer the sheer invisibility of their beauty offer. In a category where the proprietary brands are strong, and from a purely practical point of view, the packaging forms are physically small their own brand completely disappears on shelf. Although this retailer has hundreds of beauty skus, its brand barely registers from a quick scan of the aisle.
This is further compounded by its desire to copycat the proprietary brands. From a trading point of view it's understandable that they want to benchmark against the brands. But from just about every other perspective it makes no sense at all. For the retailer brand, it compounds the visibility problem - if your consumer can't see your brand how do you expect them to buy it? But more importantly, if you want to stand for something in health and beauty, plagiarism isn't the way to go.
All brands need to form an emotional connection with their consumers, but as health and beauty brands spend longer and live more intimately with us they need to form stronger emotional bonds than would be the case for instance in the food category. Unless you're looking for a dysfunctional relationship, how can you form an emotional connection with something that's pretending to be something it isn't? Copycats aside, the retailers continue to try to develop a more coherent offer, just as they must.
Asda has recently relaunched its entire beauty offer in a fully thought through approach twinned with genuine improvements in the quality of their products. They haven't looked for one single unifying thread, but coming at it from the point of view of consumers' needs they've created strong cross category brands that bring together everyday family essentials, 'performance' products, facial skin care and indulgence and gifting products.
Tesco has introduced beauty treatments at trial outlets which, if it works, could form a strong focus for its offer, but it's a difficult trick to pull off, as Boots found when it tried it a decade or so ago. Tesco might be pushing too far. You want to feel relaxed and pampered when having your nails done, and that doesn't fit with the Tesco environment.
If there were one retailer that could most easily have pulled it off it surely would have been Waitrose. It has already made great inroads with its offer, in particular the UMI brand; it has the link with John Lewis' heritage as a department store; and the advantage of an environment more conducive to beauty, which is why at first sight the deal with Boots was a surprise. But on further reflection it works really well. The values of Boots sit comfortably alongside Waitrose and it provides a ready made solution across a whole series of categories.
While a price war will undoubtedly focus the retailers' energies, for those that want to come out the other side with a purposeful beauty offer, whether in the UK or elsewhere, now is the time to come out fighting.
