Beauty and the Beast - Wie Verbraucher Beauty & Personal Care Produkte online kaufen

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1 A.T. Kearney Study Beauty and the Beast - Wie Verbraucher Beauty & Personal Care Produkte online kaufen Presentation Berlin, 11 June 2013 Dr. Peter Pfeiffer, Partner and Managing Director

2 A.T. Kearney is a leading global management consulting firm, focused on delivering high impact results A.T. Kearney overview Strategy Operations Organization & Transformation Technology Immediate Impact, Growing Advantage Tradition 87 Years of successful corporate impact; founded 1926 in Chicago Revenues Approximately US$1 billion; 90% repeat business Global Footprint 57 offices in 39 countries, over 2,100 consultants Marquee Clients Works with all leading players across a wide range of industries Source: A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 2

3 Agenda Digital will change the world A.T. Kearney s e-commerce Beauty & Personal Care survey Consequences for Beauty & Personal Care manufacturer and retailer A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 3

4 E-commerce and their underlying technologies are advancing and accelerating Estimate for 2015 Over 3 billion internet users Over 1 billion mobile-only internet users drives waves of digital disruption B2C 1.85 billion social media users B2B2C B2B 1 trillion Things on the internet 4.8 zeta bytes of cloud data traffic... Information based industries are the first to be disrupted; they won t be the last Source: ITU Statistics; Cisco, A.T. Kearney analysis A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 4

5 About 137 mn people in UK, Germany and France now shop via e-commerce, the market is expected to grow 12% annually E-commerce in UK, Germany and France Number of Shoppers (mn, ) 1 Sales ( bn, ) UK DE FR 82 34% 49% 17% 97 34% 44% 22% % 42% 25% +9% % 40% 25% % 39% 28% % 40% 26% % 41% 25% % of Internet users who shop online 82% 77% 69% UK DE FR 63 49% 32% 20% 72 48% 32% 20% 82 48% 32% 20% +12% 93 48% 32% 21% % 32% 21% % 32% 21% % 32% 21% Purchase within last 12 months Source: Forrester Inc., Eurostat A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 5

6 E-commerce in Germany continued its boom in 2012 and is expected to do so in 2013 Full year 2012 All online segments ( bn) Drugstore articles, cosmetics, fragrances ( mil.) E-/M-Commerce to 2011: +27% for Q1 13: +37% 450 E-/M-Commerce to 2011: +67% for Q1 13: ( 305 mn) Traditional, i.e. mail order E-Commerce M-Commerce Total Traditional, i.e. mail order E-/M- Commerce Total Source: bvh (Bundesverband des Deutschen Versandhandels), Pressemitteilungen und A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 6

7 Beauty & Personal Care e-commerce is a ~ 1.8 billion segment and growing 4 times faster than the overall category Beauty & Personal Care e-commerce sales Retail Sales by key sector (% of total sales, 2011) Beauty & Personal Care sales ( bn, CAGR) Other 1 Beauty and Personal Care 2% Housewares and Home Furnishings 28% 5% Consumer Electronics Total sales: 68.1 Billion 15% 23% Apparel 15% Media Products Food and Drink UK DE FR Retail sales Online sales % 35% 15% 15% 50% 47% % 15% 48% % +11% % 17% 46% % 18% 45% % 19% 43% % 21% 43% 2012 % of retail sales, % 3% 6% 1. Includes for example toys and games, home care, consumer healthcare, consumer appliances, DIY and gardening Source: Euromonitor International A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 7

8 Agenda Digital will change the world A.T. Kearney s e-commerce Beauty & Personal Care survey Why do they buy What do they buy Where do they buy Consequences for Beauty & Personal Care manufacturer and retailer A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 8

9 Beauty & Personal Care consumers in Germany that buy online are primarily motivated by finding better prices and convenience Why do they buy Motivation for browsing¹ (% of online Beauty & Personal Care shoppers) (n = 395²) Motivation for buying (% of online Beauty & Personal Care shoppers) (n = 395²) Price Comparisons To find out what s new Find products I use regularly Promotions and special offers 38% 51% 60% 75% Products not available at local stores Other4 Better informed purchase 9% 2% decision possible Convenience 33% Peer reviews Makeover ideas 30% 35% Like to explore on the web 21% Research celebrity endorsements Other³ 3% 12% 25% Better prices online 1. Several response choices possible; 2. Sample size varies according to number of responses for specific question 3. Includes, e.g. To find information on ingredients and To receive samples to test products 4. Includes, e.g. It is a change to the usual in-store shopping and I don t have always time to go to the store to do my shopping Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 9

10 German survey participants rated site security, ability to find best price and specific products as most important Why do they buy Most important attributes (% of online Beauty & Personal Care shoppers) (n = 395¹) Survey question: What is most important to you when shopping for Beauty & Personal Care products online? 42% 41% 39% 54% 53% 52% 48% 47% 44% 50% 42% 36% 40% 41% 8% 9% 12% 7% 7% 2% 3% 1% 33% 31% 50% 14% 2% 3% 43% 48% 23% 24% 0% 2% 25% 23% 22% 17% 15% 11% 0% 4% 44% 26% 1% 8% 36% 31% 11% 35% 42% 32% 16% 30% 13% 28% 36% 25% Site security Best price Finding specific products Free shipping Finding my favourite brands Special promotions Quick delivery Ease of navigation Free samples New products Peer reviews Interestingly, free samples do not rank high overall Loyalty points In-store pick-up/ return Product In-store tips event information Very important Somewhat important Not significant Not important 1. Sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 10

11 Women generally valued most online shopping attributes more frequently than men Why do they buy Top five attributes selected by gender (% of female and male shoppers who ranked an attribute as Very Important) (n = 395¹) Female 60% 58% 56% 53% 45% Male 51% Survey question: What is most important to you when shopping for B&PC products online? 48% 47% 45% 39% Site security Finding specific products Best price Free shipping Finding my favourite brands Best price Site security Finding specific products Free shipping Finding my favourite brands Overall, 56-60% of Women surveyed rated the top 3 attributes as important, while only 47-51% of Men did Overall, top five attributes consistent for Women and Men However, Best Price ranks only third for Women, whereas for Men it is the most important attribute 1. Sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 11

12 Across all age groups, site security and finding the best price were among the top 3 highest ranked attributes Why do they buy Top five attributes selected by age (% of shoppers by age group who ranked an attribute as very important) (n = 395¹) % 46% 44% 38% 35% % 52% 50% 48% 42% Survey question: What is most important to you when shopping for B&PC products online? 64% 63% 55% 54% 48% Best price Finding specific products Site security Quick delivery Free shipping Best price Site security Free shipping Finding specific products Special promotions Site security Finding specific products Best price Free Finding shipping my favourite brands < 25 year old shoppers most frequently valued finding the best price. Other attributes were valued less frequently compared to other age groups year old shoppers most frequently valued best price, site security and free shipping. Similar to the other groups, informative attributes (e.g. peer reviews, products tips) were not highly valued overall > 46 year old shoppers valued core attributes more frequently than other age groups with site security and finding specific products being the highest ranked 1. Sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 12

13 German shoppers are active in all categories with Fragrances and Skin Care purchased most frequently What do they buy Frequency of purchases by sub-category (% of online Beauty & Personal Care shoppers) (n = 395¹) Survey question: What types of beauty products do you buy online? Please tell us why Frequently Sometimes Rarely Never 28% 21% 15% 15% 12% 12% 11% 30% 23% 24% 38% 35% 42% 40% 27% 24% 39% 32% 32% 23% 24% 34% 38% 15% 18% 26% 9% 13% Fragrances Skin care Personal care Hair care Colorcosmetics Tools Nail care In the words of consumers I buy fragrances online because I can find better prices and a larger product selection than in local stores I get good prices for skin care online and cannot buy my favorite products in local stores The product selection and prices for personal care products are sometimes better online It don t buy hair care products online as it does not pay off due to the delivery charge I prefer to buy cosmetics in drugstores as I can examine them before purchasing I don t buy tools online as I can buy them cheaper in my local store I don t buy nail care online as I prefer to see them first 1. Sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 13

14 Fragrances and Skin Care are the most frequently purchased online Beauty & Personal Care categories in Europe What do they buy Frequency of purchases by sub-category Color Cosmetics ranked 2 nd in France Survey question: What types of beauty products do you buy online? Please tell us why Frequently Sometimes Rarely Never 24% 23% 18% 17% 17% 13% 9% 26% 28% 38% 36% 42% 41% 45% 20% 27% 17% 23% 18% 22% 17% 31% 38% 38% 17% 16% 21% 19% Fragrances Skin care Hair care Colorcosmetics Personal care Nail care Tools In the words of consumers Price is the main reason why I buy fragrances online. Sometimes I find items up to 50% cheaper I get good prices for skin care online and cannot buy my favorite products in local stores I buy shampoo online because the prices are more interesting than in stores I buy cosmetics online due to the large selection and the good value for money products available I buy bio soap online because it is more convenient and cheaper than in stores I buy nail polish online because I like the selection of different colours that is available Personal care tools are easily available on the high street and supermarkets Note: Several response choices possible, sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France (1,340 respondents), Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 14

15 For the three countries in Europe, Amazon and Yves Rocher were most frequently named online shopping destinations Where do they buy Top online destinations for B&PC (n=1,340¹) Survey question: What is your most favorite online destination for Beauty & Personal Care shopping? Amazon.co.uk 26% Amazon.de 41% yvesrocher.fr 32% Boots.com 16% ccbparis.fr 12% ebay.co.uk 14% Yves-Rocher.de 12% Vente-privee.com 11% Brand direct ebay.de 11% Sephora.fr 11% Supermarkets Major department stores Online retailers Major drugstore Speciality beauty retailers Other 4% 3% 8% 5% 11% 3% Douglas.de Rossmann.de Drugstores Brand direct Other 7% 4% 6% Amazon.fr Speciality beauty retailers Online retailers Brand direct Other 8% 6% 5% 4% Note: Several response choices possible, sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France (1,340 respondents), Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 15

16 Amazon was ranked as the top online channel for Beauty and Personal Care Products by all countries, except for France Where do they buy Top online destinations for B&PC (n=1,842¹) Survey question: What is your most favorite online destination for Beauty & Personal Care shopping? Amazon.co.uk 26% Amazon.de 41% yvesrocher.fr 32% Amazon.com 28% Boots.com 16% ccbparis.fr 12% Sephora.com 18% ebay.co.uk Brand direct Supermarkets Major department stores Online retailers Major drugstore Speciality beauty retailers Other 14% 8% 5% 4% 3% 3% 11% Yves-Rocher.de ebay.de Douglas.de Rossmann.de Drugstores Brand direct Other 12% 11% 7% 4% 6% Vente-privee.com Sephora.fr Amazon.fr Speciality beauty retailers Online retailers Brand direct Other 11% 11% 8% 6% 5% 4% Drugstore.com ebay Major drugstores Brand direct Major department stores Other 8% 7% 11% 6% 13% 1. UK, DE, FR: n=1340; US: n=502, Sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Shoppers, UK, Germany and France, Oct-Dec 2012; A.T. Kearney Survey of Online Shoppers, US, A.T. April Kearney / /44935d/5aY4trQkkR00RllnkG 16

17 46% of the high income shoppers ranked Amazon as their top online channel for beauty and personal care products Where do they buy High income group (% of online Beauty & Personal Care shoppers with annual income > 51k), (n = 94¹) Survey question: What is your most favorite online destination for Beauty & Personal Care shopping? Age 56+ (% of online Beauty & Personal Care shoppers above 55 years old), (n = 31¹) Online retailers Supermarkets Speciality beauty retailers 3% Drugstore 5% 1% 6% Brand direct (19 brands surveyed) 46% Docmorris.de Karstadt.de Rossmann.de 3% 3% Brands4friends.de 3% 3% ebay.de Yves-Rocher.de 29% dm.de 6% dm.de ebay.de 9% 14% Douglas.de Amazon.de Douglas.de 13% 26% Amazon.de 1. Sample size varies according to number of responses for specific question Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 17

18 Key attributes were consistently cited as the top reasons for why consumers preferred to shop on these websites Where and why do they buy Survey question: Please tell us why you prefer the online destinations where you most frequently shop Beauty & Personal Care consumers are more inclined to shop at these online destinations because amazon Product selection, pricing, quick delivery, ease of use Amazon is quick, reliable, has good prices, a good product selection and is easy to use I buy almost everything from Amazon, as I never hat problems with the site and payment is easy Yves Rocher Specific products, trust in brand, pricing I know the products and value the offers I order from this site since many years Yves Rocher has natural products of good quality, and which I don t get somewhere else ebay Pricing, product selection ebay has a large selection of branded products to way cheaper prices ebay has everything with the best prices mydouglas Product selection, pricing, free samples I like Douglas because it has all the important brands and a great customer service It has a large selection of fragrances It has nice products with good prices and many free samples Rossmann online Product selection, pricing, ease of use It is easy to navigate, has very low prices, a low delivery charge, and a good product selection with excellent quality I can get all the products I need for low prices Source: A.T. Kearney Survey of Online Beauty & Personal Care Shoppers UK, Germany and France, Oct-Dec 2012 A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 18

19 Agenda Digital will change the world A.T. Kearney s e-commerce Beauty & Personal Care survey Consequences for Beauty & Personal Care manufacturer and retailer A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 19

20 Beauty & Personal Care products are in the digital battle filed Digital maturity by product family (11 major European countries average) Researched online 1 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% Still in store Digital battle field Furniture Clothing Beauty products Home decoration Office supplies Main triggers for online shift: Price Selection Convenience Trust Gone to digital omni-channel Electronics Video games Books Computers DVD / Videos 5% Grocery 0% 0% 5% 15% 20% 25% 30% 35% 40% 45% 50% Purchased online 2 1. Percentage of consumer who search the product on line before buying 2. Percentage of consumer who buy more than 25% of this family of product on line Source: Experian 2011, A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 20

21 In the digital battle field traditional offline companies must learn from online businesses Native Digital vs. offline firms DNA Example DNA attributes Technology as corporate backbone Truly customer centric Native Digitals Traditional firms Agility Organizational flexibility Openness & forward thinking Safety & security DNA match (low high) Source: A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 21

22 Traditional firms need to review their business model by understanding consumer needs and the impact of digital disruptors Digital business model Consumer Needs Digital Value Chain Digital Life & Advertising Service Offering Purchase & Payment Product & Service Life-Cycle Feedback & Support R&D Product Development Manufacturing Marketing & Sales Retail Sales Retail After Sales & Service Classical Value Chain Digital Disruptors Source: A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 22

23 Opportunities will arise in many areas but might look threatening from a retailer perspective Consumer needs Guide me Help me Invite me Coach me Service me Book me Please me Surprise me Connect me etc. Next: all touch points totally transparent to the customer and structured according to learned individual preferences Source: A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 23

24 A.T. Kearney s European Beauty & Personal care study Key messages Online channel sales growing 4x faster than overall market Online shopping experience is generally poor & shoppers are conditioned to look for basic website features Shoppers are increasingly multi-channel there will be no pure offline or pure online shoppers in the future As the dominant online retailer, Amazon will increase its impact on Beauty & Personal Care market Source: A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 24

25 1 Online channel sales growing 4x faster than overall market Implications Manufacturers need specific online channel strategies to take advantage of growth Offline retailers need to go multichannel unless they want to remain in a stagnant or shrinking market Define specific online channel strategy including e.g. defined role for online channel, specific online product assortment, online promotion strategy, etc. Complement offline store with online store to meet shoppers wherever they want to shop Strengthen relationships with online players, e.g. through direct relationships and joint business planning Set up dedicated online channel management e.g. dedicated KAM for online partners Adjust commercial management to multichannel world, e.g. with differentiated pricing, terms & conditions for offline vs. online Consider own branded online store to create direct relationships with consumers and shoppers Source: A.T. Kearney Define roles and differentiated value propositions for each channel to approach more shopper types and behaviors e.g. online can offer a broad selection and detailed information, while physical stores must become a destination, where the focus will be on experience and value-added services Create m-commerce sites to accommodate smaller and varying screen sizes of mobile devices (e.g. tablets, mobile phones) Be truly channel agnostic and eliminate internal channel conflict A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 25

26 A.T. Kearney s European Beauty & Personal care study Executive summary Key messages Online channel sales growing 4x faster than overall market Online shopping experience is generally poor & shoppers are conditioned to look for basic website features Shoppers are increasingly multichannel there will be no pure offline or pure online shoppers in the future As the dominant online retailer, Amazon will increase its impact on Beauty & Personal Care market Implications Manufacturers need specific online channel strategies to take advantage of growth Offline retailers need to go multi-channel unless they want to remain in a stagnant or shrinking market For manufacturers, online PoS is the next big opportunity for shopper marketing to improve shopper experience Retailers need to upgrade their websites if they want to compete based on any thing other than price Manufacturers need to ensure brand consistency across channels (e.g. same, high-quality images used) Retailers need to offer a consistent multi-channel shopping experience Manufacturers should improve international commercial management since Amazon already operates Pan-European Retailers need to develop strategies to differentiate their online sites from Amazon more implications in the long version of our e-commerce study Source: A.T. Kearney A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 26

27 A summary: long time ago people danced at concerts, 1990 s now they video, click, share, tweet, 2010 s... and the journey has just started Source: KBPC May 2013, 123RF.com (left), amadarose.co.uk (right) A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 27

28 Vielen Dank für Ihre Aufmerksamkeit (mobil) A.T. Kearney 10/ /44935d/5aY4trQkkR00RllnkG 28