1. KEEPING TRADITIONAL DISTRIBUTION CHANNELS
RELEVANT IN THE DIGITAL AGE
INNOCOS EUROPE 2013
4 JUNE 2013
ANTONIA BRANSTON, SENIOR RETAIL ANALYST
@ANTONIAB2

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3. GLOBAL DEVELOPMENT OF BEAUTY RETAIL
THE IMPACT OF DIGITAL
THE SOCIAL MEDIA REVOLUTION
KEEPING TRADITIONAL RETAIL RELEVANT

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$4.3trn
$5.0trn
0
1
2
3
4
5
6
2012 2017
$trillion
Beauty Sales Growing Strongly
GLOBAL DEVELOPMENT OF BEAUTY RETAIL

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$2.5trn $2.6trn
$1.9trn
$2.4trn
0
1
2
3
4
5
6
2012 2017
$trillion
Emerging markets
Developed markets
Beauty Sales Growing Strongly…Thanks To Emerging Markets
GLOBAL DEVELOPMENT OF BEAUTY RETAIL

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$bn
Brazil 7% 16.3
China 8% 15.6
US 2% 5.9
India 9% 4.6
Mexico 4% 2.2
Iran 9% 2.0
Indonesia 9% 2.0
Saudi Arabia 8% 1.5
Argentina 5% 1.4
Thailand 5% 1.3
Russia 1% 1.3
Emerging Markets Dominate the $1billion+ Club
GLOBAL DEVELOPMENT OF BEAUTY RETAIL
CAGR
The US is the only
developed market in
the $1billion+ club
emerging markets
will generate 86% of added
beauty and personal care
sales to 2017

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Lower
price
points
Product
educa-
tion
Flexible
formats
Local
prefer-
ences
Traditional Retail: Key Strategies For Accessing Emerging Markets
GLOBAL DEVELOPMENT OF BEAUTY RETAIL

8. GLOBAL DEVELOPMENT OF BEAUTY RETAIL
THE IMPACT OF DIGITAL
THE SOCIAL MEDIA REVOLUTION
KEEPING TRADITIONAL RETAIL RELEVANT

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5%
0 10 20 30
Drugstores
Internet retail
Department stores
Direct selling
Beauty specialists
Traditional grocery retail
Pharmacies
Modern grocery retail
% of BPC sales
136%
0 100
% growth 2012-17
Beauty Retail 2017: The Difference Will Be Digital
THE IMPACT OF DIGITAL

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0%
30%
60%
90%
120%
150%
North America
Western Europe
Australasia
Eastern Europe
Latin AmericaMEA
Asia Pacific ex
CN IN
India
China
2011 Internet 2020 Internet
2011 Mobile subscriptions 2020 Mobile subscriptions
Importance Of PCs Fades As Mobiles Take Over The Online World
THE IMPACT OF DIGITAL

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E-commerce
Price
Information
Availability
M-commerce
Promotions
Interaction
Immediacy
M-commerce Offers More Prospects For Store Collaborations
THE IMPACT OF DIGITAL
BLACK
AND
WHITE
hard for
stores to
compete
GREY
AREAS
potential to
enhance
stores rather
than compete
 

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Good news
for store-
based
retailers
Outpaced
by smart-
phone
owners
Growth
in
internet
users
By 2017…
THE IMPACT OF DIGITAL

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Format
conver-
gence
Easy
payment
In-store
offers
and info
Customer
inter-
action
Traditional Retail: Key Strategies In A More Mobile World
THE IMPACT OF DIGITAL

14. GLOBAL DEVELOPMENT OF BEAUTY RETAIL
THE IMPACT OF DIGITAL
THE SOCIAL MEDIA REVOLUTION
KEEPING TRADITIONAL RETAIL RELEVANT

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Social Media Has Gained Global Reach
Social Media Users as
% of Online Users 2012
96%+
91% – 95%
85% – 90%
Less than 85%
THE SOCIAL MEDIA REVOLUTION

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Brand
Facebook
markets
Facebook
engagement
level
Twitter
markets
Twitter reach
Avon
Clinique
Lancôme
L'Oréal
Paris
Nivea
Major Names Already Brand-Building Via Social Media
THE SOCIAL MEDIA REVOLUTION
8
6
7
6
6
3%
4%
3%
1%
1%
6
3
6
5
3 1m
18m
26m
20m
114m

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Social media a key part of the buying journey…including the sale?
Purchase
??
Post-
purchase
Pre-
purchase
THE SOCIAL MEDIA REVOLUTION
Product discovery
Product research
Purchase decision
Product usage
Product reviews
Customer service
Limited
progress

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Social media: “being
social without being
sociable”
…the Walk-Away
consumer is born
Will Social Media Change the Way we Buy Beauty? It Already Has.
THE SOCIAL MEDIA REVOLUTION

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Catering
to the
Walk-
Away
consumer
Self
navigation
Retail
assistant 2.0
Remote
engagement
Stores Change Their Approach In The Post-Social World
THE SOCIAL MEDIA REVOLUTION

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Data
mining
Make
stores feel
more
‘peer-to-
peer’
Presence
through-
out
buying
journey
Personal-
ised
marketing
Traditional Retail: Key Strategies Around Social Networking
THE SOCIAL MEDIA REVOLUTION

21. GLOBAL DEVELOPMENT OF BEAUTY RETAIL
THE IMPACT OF DIGITAL
THE SOCIAL MEDIA REVOLUTION
KEEPING TRADITIONAL RETAIL RELEVANT

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OMNI-
Join up the
customer
experience:
online, social,
mobile and in-
store
CHANNEL
Be present
throughout the
buying journey
- it’s the sale that
counts, not
where it is made
MINDSET
Be prepared to
invest and
change…
ROI will be hard
to calculate
‘Omni-Channel’: It’s More Than Just A Buzzword
KEEPING TRADITIONAL RETAIL RELEVANT

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Multi-channel
thinking
Omnichannel
operations
Omnichannel
mindset
Omnichannel Retail Approaches Still Evolving
KEEPING TRADITIONAL RETAIL RELEVANT

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Target
high-
growth
markets
Make
the most
of mobile
synergies
Think
OMNI-
channel!
Evolve
retailer-
customer
relations
Keeping Traditional Distribution Channels Relevant
KEEPING TRADITIONAL RETAIL RELEVANT

25. THANK YOU FOR LISTENING
Antonia Branston
Senior Retail Analyst
Euromonitor International
antonia.branston@euromonitor.com
+44 (0)20 7251 8024 ext. 2428
www.twitter.com/antoniab2