Author|"Future Traces" Wu Wanqing
In July this year, Pacific Department Store, once one of Shanghai's most popular department stores and in operation for 30 years, announced that it would officially terminate its operations on August 31, and on the same day, the Hanyang store of Wuhan Dayang Department Store, which had been in operation for nearly 14 years, would also be closed.
The sad exit of the old department store is sad, but such news has become common in recent years.
At the moment when the channel ecology is accelerating the reshuffle, are cosmetics doing well in the offline "main battlefield" such as department stores and shopping malls? From the market performance and market visits in the first half of the year, what other valuable market information is there?
High-end brands are thriving
In the first half of the year, department stores ushered in double growth
Overall, cosmetics have achieved an initial recovery in the department store channel in the first half of this year.
According to the data provided by GFK to "FBeauty Future Traces", department stores and cosmetics in 51 cities across the country recovered well in the first half of this year, and there was a growth trough. Except for a 6.9% decline in January due to the long-tail effect of the epidemic, which was basically flat in February and June, the rest were growth, and there was a strong growth of 29.5% in April.
It is worth mentioning that considering the impact of last year's epidemic factors, the year-on-year growth data in the first half of the year has certain particularities, such as the traditional small sales peak in March and May.
According to the four classifications of cosmetics brands under the monitoring mechanism, only high-end brands achieved double growth in sales and sales, of which sales increased by 10.2% year-on-year and sales volume increased by 7.2% year-on-year. And the sales and sales volume of high-end brands accounted for 85.7% and 68.5% respectively, accounting for far more than the sum of the other three types of brands.
Obviously, most of the cosmetics sales in department stores and shopping malls have been realized by high-end brands.
"A class A cosmetics counter in a head shopping mall may sell more than 100 million yuan a month." A national chain shopping center South China purchasing person told "FBeauty Future Traces" that for first-line high-end brands, the monthly sales of about 30 million yuan is a watershed, brands such as Lancôme and Estée Lauder can basically do it, and the average price of high-luxury cosmetics can reach at least 5,000 yuan.
In sharp contrast to the double growth of high-end brands, the sales and sales volume of mid-to-high-end, mid-range and low-end in the first half of this year all showed a double decline. Among them, mid-range brands are the most dismal, with sales falling by nearly 30% year-on-year, and sales volume falling by nearly 40% year-on-year. While the sales of low-end brands fell by 18.2%, their share fell to 0.3%, and the living space continued to narrow.
The mid-range brands in the survey mainly refer to the "three euros", that is, the mass brands represented by L'Oreal, Opile and OLAY, which were the main contributors to department store sales in department stores a decade ago. Today, the "Big Four" such as Lancome, Estée Lauder, Dior and Chanel have completely replaced the "Three Euros" and become the main source of the overall performance of the department store channel.
In addition to the double growth of sales and sales, the opening speed of high-end brands in major department stores and shopping malls is also accelerating. According to GFK data, in the first half of this year, in 814 shopping malls across the country, the number of high-end cosmetics brand counters totaled 3,981, a year-on-year increase of 2.2%, which is also the only brand grade with an increase in the number of counters among all cosmetics brand grades.
Based on the relevant data of sales, it can be seen that in the case of the number of high-end brand counters only 33 more than that of mid-end brands, the sales of high-end brands (22.049 billion yuan) are more than 10 times that of mid-range brands (2.105 billion yuan). It can be seen that in the department store channel that pays great attention to the efficiency of the floor, the poor operation will naturally accelerate the closure, leaving more and more space for low-end beauty brands.
With the further adjustment and upgrading of department stores for high-end and the sinking of high-luxury brand outlets, brands such as La Prairie, Helena, and LA MER have become stronger in offline channels due to more advanced images and more accurate audience levels.
"We have shut down some small brands in the first half of this year," the cosmetics operation manager of a high-end department store in North China told FBeauty Future Trail, adding that its shopping mall will also make some brand adjustments in the second half of the year and consider introducing some high-end brands. She said that the business of the mall has recovered to about 95% of the pre-epidemic level, and the number of customer orders and new customers are on the rise.
"FBeauty Future Traces" found that in the first half of the year, high-end skin care brands such as Helena and LA MER had cabinet opening actions, and luxury brands such as Prada, Armani, and Van Cleef & Arpels also opened cabinets for beauty lines. Among them, Prada Beauty has the fastest opening speed.
The head of procurement in South China of the above-mentioned national chain shopping center speculated that this may be due to some channel resource replacement adjustments made by L'Oréal for the two brands of Atelier Cologne and Prada. It is understood that in the first half of this year, Oulong has closed counters such as Raffles City Shanghai, Hangzhou Wulin Yintai, and Hangzhou MixC due to performance and other reasons.
"On the whole, the brand resources that entered the offline cabinet in the first half of the year were actually relatively small, and the brands of large groups such as L'Oreal and LVMH had relatively more actions, and perfumes were more popular." The aforementioned person in charge added. According to the statistics of FBeauty Future Traces, in the first half of the year, nearly 20 domestic and foreign fragrance brands have opened offline stores in first-tier and new first-tier cities such as Beijing, Shanghai, Shenzhen, Hangzhou, Nanjing and Zhengzhou.
Offline "efficacy fever"
Big names shift from promotions to competitive services
Specific to the category, skin care is still the trump card category that drives the performance of cosmetics in department stores.
According to different categories, in the first half of this year, among the sales of cosmetics in department stores in 51 cities across the country, skin care sales accounted for more than 80%, reaching 20.894 billion yuan, a year-on-year increase of 3.1%. Color cosmetics achieved double-digit growth, with sales growth of 10.3% year-on-year, accounting for 18.8% of the market.
It is worth noting that the sales of skin care and makeup are in a year-on-year decline trend, of which the year-on-year sales of skin care fell by 12.4%, combined with the increase in sales, it can be calculated to a certain extent that the unit price of cosmetics has increased, which is also a side reflection of the dominance of high-end brand sales in department stores.
"The makeup category in our store is about to exceed 20%, and the business has improved significantly." The above-mentioned cosmetics operation manager of high-end department stores in North China said that the sales of makeup with a high-luxury background such as Armani in his store are relatively good.
In this regard, a shopping mall executive in East China analyzed to "FBeauty Future Traces" that the recovery of makeup is actually based on the fact that many brands adjusted their brand strategies last year, and many brands were "a lipstick to hit the world" before the epidemic. After the epidemic, paying attention to the situation of consumers wearing masks, brands have actually focused more on base makeup in the past two years, similar to primer, foundation, air cushion, etc. She said that compared with eye shadow, blush, etc., the price of base makeup is higher and more effective, so the brand has been continuously launching or updating base makeup products in the past two years.
However, another head of purchasing at a national chain shopping mall has a different view, saying that the rise in makeup sales is essentially just a "recovery", because makeup has been too affected by the epidemic in previous years, and it is normal to achieve a certain degree of increase in its system, and it has not returned to the state of 2019 in its system.
Compared with the "controversy" of the recovery of the makeup category, the high efficacy market value of skin care products is obvious to all.
The data shows that the sales of skin care products that meet the efficacy demand of anti-wrinkle rejuvenation reached 15.312 billion yuan, and it is the fastest growing efficacy type among all skin care categories, with sales increasing by 7.1% year-on-year and accounting for 73.3% of sales. Sales of mild, neutral skin care products such as moisturizing, refreshing and oil control are declining.
With the improvement of consumers' overall skin care knowledge, major high-end brands also pay special attention to emphasizing ingredients and efficacy in product promotion, and scientific communication has become an important content of marketing. For example, Estée Lauder's new product "SOS Flash Repair Essence" extends the concept of "night repair" that has long been the main product "Little Brown Bottle" to the "sensitive skin repair" market; Lancôme's latest "Jingchun Liuyun Cream" contains "high-concentration anti-aging activity" ingredients, featuring rose gel synergistic Bosein, which activates cell activity from the root and promotes collagen production; La Mer's new essence cream "Miracle Velvet Cream" continues the classic active essence Miracle Broth while adding hyaluronic acid peptide + collagen hexapeptide + wrinkle peptide triple peptide.
Walking into the cosmetics section of the mall, you can find many counters highlighting the efficacy of the products. For example, the Estée Lauder's new product "SOS Flash Repair Essence" display stands with the words "repair, youthfulness, light lines" are highlighted; The poster of Shuli Ke Color Repair Essence marks the words "directly hit the cause of redness" to the maximum; Helena's new Black Bandage Eye Cream visualizes the effect in the form of "upper lift +13%, middle stroke +12%, lower firming +21%"; Kiehl's also displays the products according to different effects such as "antioxidant, anti-aging, sun protection repair, light wrinkles and firming".
"FBeauty Future Traces" found in the field experience of each counter that when salespeople introduce products to customers, they will give priority to telling customers the advantages and functional ingredients of the product, and introduce the product to a clear extent how long it can achieve results and to what extent the effect can be achieved. Some BAs even use the concentration content of star ingredients compared to competitors as a sales pitch.
In addition to playing the "efficacy card", beauty is also exploring the new value brought by warm services in this more experiential scene offline. The growing number of beauty salons is a testament to this.
In recent years, LA MER, Shulik, CPB and other high-luxury cosmetics are increasing the size of beauty salons, and many brands have even required the opening of beauty salons when opening the cabinet. The above-mentioned East China Shopping Center executive said that as early as 2008, when LA MER did not have many stores in the country, it put forward the requirement that the shopping mall must give conditions to open a beauty salon. Nowadays, brands are also becoming more and more demanding in this regard, which may have been enough for 10 square meters and two beds, and now it may be necessary to have 15-20 square meters, because the demand for consumer care has become more vigorous.
La Prairie beauty salon
In this regard, the cosmetics operation manager of a high-end department store in North China has a deep feeling, she said that since the Spring Festival this year, the beauty salon in the store has basically been in a full state, because after the end of epidemic control, everyone's demand for offline skin care experience is increasing. At the same time, such services can also meet some of the social needs of consumers. Therefore, the store where she works has also opened more beauty salons for some brands this year, and is considering providing more space for brands to open beauty salons.
It is understood that as early as 2020, INtime Department Store launched a beauty shop expansion plan, including five stores such as INtime Department Store Hangzhou Wulin Store, INtime Department Store Hangzhou West Lake Store, INtime Department Store Ningbo Tianyi Store, Hefei Yintai Center, and Xi'an Kaiyuan Bell Tower Store. In 2021, INtime Department Store added more than 20 beauty salons nationwide, bringing the total number of beauty salons to nearly 70.
It is reported that most of these beauty salons are located in a quieter location in the mall, usually between 10-25 square meters, with a half-open or fully enclosed form, mainly to create a quiet, high-end, private environment. For the consumption of beauty salons, different shopping malls and different brands have different mechanisms, for example, some shopping mall customers can enjoy this membership benefit with brand consumption points.
Helena Beauty Shop
Different brands of beauty salon treatments are also different in terms of programs. For example, LA MER will configure different methods and products according to the needs of customers; Sisley is equipped with massage oils exclusively from the beauty salon; Helena's 90-minute Black Pearl treatment uses an exclusive microcurrent instrument; Shiseido Beauty Shop is equipped with a skin detector to match products according to the customer's skin type, and also offers a mask exclusively for the beauty salon.
For example, ELC's Gold Diamond members receive a free Platinum Peel 1-on-1 counter beauty service once a month, while higher Black Diamond members can enjoy it twice, and the service is limited to the member himself. At present, most brand beauty salons are only open to brand members, so consumers who want to experience related services must meet a certain consumption threshold to become a member to use.
The person in charge of purchasing the above-mentioned national chain shopping center said that the beauty salon is estimated to drive about 30% of the brand's sales. This method can not only stimulate consumers' desire to buy, cultivate user stickiness, but also enhance consumers' brand loyalty.
However, beauty salons are also a symbol of brand strength and the importance of shopping malls to some extent. The person in charge said that brands do not have beauty salons in every shopping mall, because this is a lot of investment in hiring professional beauty personnel, purchasing equipment, etc., so brands often choose shopping malls with better operation to invest in beauty salons.
Membership assets are at the core
Department stores and brand operations "go both ways"
In the context of high online traffic costs, offline department stores counters that can better highlight the brand image and provide warm services have received more attention from brands this year. At the same time, the mall is also accelerating the operation of "internal strength" construction, its maintenance of member assets, the value of brands, especially high-end brands, is huge, in the user operation to achieve "two-way rush".
"Our biggest advantage over other channels is our membership base." The above-mentioned cosmetics operation manager of high-end department stores in North China said that in recent years, their "member plate" has also been constantly updated, and the mall has also paid great attention to carrying out rich member refined activities.
Another East China shopping center executive also said that it is difficult for department stores to undertake major high-end brands without a strong membership base, and the introduction of high-end brands into this type of department stores and shopping centers with a strong membership base is also relatively safe. She revealed that the membership mechanism of many department stores and shopping malls is now very perfect, for example, it will require members to consume a certain number of times a year in the cosmetics area, which is very important for the consumption of settled brands.
In fact, shopping malls and brands are moving in the direction of refined operation in the area of linkage with member assets.
On the one hand, mall members are able to drive brand sales.
Most department stores and shopping malls need to meet a certain amount of consumption to become their high-end members, such as becoming a black gold card member of Yintai Center IN01, which needs to meet the conditions of cumulative consumption of 150,000 yuan on the same day, or 300,000 yuan in the current year. This method not only screens high-consumption users for shopping malls, but also cultivates members' long-term consumption habits, which is of great significance to the sales of settled brands.
At the same time, the mall will also provide some rights and interests to members, the basic rights and interests mainly meet the convenience of life and shopping, including parking, taxi, clothing change, personal shopping guide and shopping discounts; Value-added benefits are closer to more customized needs, such as free access to VIP rooms and limited editions, preview privileges for new releases, or invitations to events.
Among them, high-end brands can undoubtedly cooperate with shopping malls in terms of limited editions and new sales, and indirectly cultivate high-quality user groups.
The mall and the brand will also carry out some linkage in holiday activities to achieve a win-win situation. A senior management of South China Department Store revealed that under the alignment of ideas, the effect of planning activities in conjunction with brands is very good, and triple-digit growth can often be achieved.
Many shopping malls have also been put into practice, for example, Chengdu Wangfujing Department Store has launched a series of linkage between Qixi and the beauty area: members can purchase beauty vouchers with their cards, such as 900 yuan group 1000 yuan; Launch of points redemption coupons, such as 10,000 points for SK-II professional skin tests and fairy water and cream samples. During the SKP Qixi event in Chengdu, the Dofan Beauty Shop experience service was also launched for shopping mall members.
For important new product activities of the brand, the mall will also carry out joint promotion, such as the official WeChat public account of Beijing SKP, which recently released the relevant promotional information of the world premiere of "Leppani's New Caviar Cream", and provided a limited-time discount for the new product.
Screenshot from the official WeChat public account of "Beijing SKP"
On the other hand, brand members will also help the mall to "drain".
As mentioned earlier, many brands can only enter the mall to experience beauty salon services when their members reach a certain threshold, and such consumers are actually the consumer groups needed by the mall.
Brand members, like shopping mall members, also have thresholds, such as Lancôme members, in order to become the highest level of black diamond card members, the annual consumption must pay 45,000 yuan. In the case that most brands achieve offline and online "membership pass", brand members can drive the flow of people in the mall while consuming and experiencing offline nearby, and the organic rate is converted into members of the mall.
Screenshot from Lancôme's official website
The operation manager of a high-end department store in North China said that in recent years, shopping malls and brands have actually given profits to consumers, including brand gifts and resource input, the essence of which is to better stabilize and update the "membership plate".
It is worth mentioning that in this "two-way rush" process of user operations, commercial entities and cosmetics brands are also more calmly ushering in the double selection period.
"After three years of the epidemic, in fact, each brand is slowly clarifying the channels it needs to focus on, for example, some brands are doing particularly well online, and some brands are also finding that their advantage is offline." The above-mentioned cosmetics operation manager of a high-end department store in North China said that while the mall is making choices, brands are also making choices.
"When the sales of the mall itself has reached a certain volume, it is not difficult to introduce a new high-end brand." The above-mentioned East China Shopping Center executives said that the difficulty of traditional department stores is to introduce some niche high-end brands. While most shopping malls are striving to complete high-end brands, how to carry out differentiated dislocation competition has also become a new focus of thinking for shopping malls.
The above-mentioned executives of East China Shopping Center took the investment promotion of niche high-end perfume brands such as Diptyque as an example, and how the mall gave niche brands the reason to open stores is a new topic. At present, only strong large department stores such as Beijing SKP and Wulin Yintai can do it.
The person in charge of purchasing in South China, another national chain shopping center, also said that in view of the differentiated layout, the shopping mall actually considers going in two directions, the first is niche perfumes, and the second category is domestic products, both want to make it large-scale, but it is clear that some brands are not ready. She said: "Many such brands believe that the first investment in offline is too high, the second is that the business conversion is not as fast as online, and not all brands have the strength to invest offline." ”
But in any case, to do a good job of high-end brands, offline must be one of the important channels that cannot be bypassed. Ma Xiaoyu, vice president and general manager of L'Oréal China's high-end cosmetics division, once mentioned in an interview: "Lancôme's roots have always been offline. Where the guests are, we go for business. ”
Whether it is unique experience services, the integration and transformation of member assets, or even the image display of the brand and the embodiment of market position, department stores and shopping centers are of irreplaceable importance to high-end brands. Nowadays, in the case of high-end brands supporting the sales market of department stores and shopping centers, department stores and shopping malls are even more inseparable from high-end brands, and they are willing to devote resources to intensive cultivation of cosmetics business. Under this "two-way rush", the synergy of the two is becoming a key force affecting the iterative upgrading of the beauty market.
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