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While the recession may officially be over in many markets, brand owners are having to contend with a potentially long-term shift in consumer buying habits in mature regions toward mass retailers, according to Euromonitor International. Consumers became used to moderating their spending on beauty products during the recession, and, in many cases, are not prepared to return to previous levels of spending. Instead, many are preferring to spend more cautiously, and are taking pleasure in seeking out what they want to buy at the best available price, often using price comparison websites and shopping across channels in search of bargain prices. Many people have also become more willing to take a chance on less expensive brands in areas of beauty where they feel there will be no perceivable difference in quality.
Parapharmacies/drugstores were the main beneficiaries of the global recession as consumers traded down—in terms of both the beauty brands they bought and where they bought them. Sales through department stores took a hit, meaning that sales of premium beauty products also suffered due to lower footfall. This decrease in footfall in 'premium' specialist and department stores last year in favor of more mass-market outlets appears to be a long-term trend that has lasted beyond the recession, well into 2010.
Supermarkets/hypermarkets remains the retail channel that accounts for the highest proportion of beauty and personal care sales globally, and weathered the recession comparatively well. Footfall through the channel remained constant, as consumers still needed to buy essentials. Non-store channels also grew as a result of the trend for buying online in key regions such as Western Europe and North America, and a boom in direct selling in emerging regions like Latin America and Eastern Europe.
Retailers at both the top and bottom end of the price scale have adjusted their strategies in response to the consumer trend for shopping at lower-end retail outlets. Many drugstore chains are also expanding their beauty portfolios and introducing better merchandising and higher quality private label products, which is blurring the boundaries between typically mass and typically premium channels.
In July 2010, U.K. beauty specialist retailer The Perfume Shop, which primarily sells premium-priced fragrances, launched a series of 'stores within store' at U.K. drugstore chain Superdrug. This marks The Perfume Shop's attempt to tap into the stronger footfall of the more 'mass' drugstore channel. According to the company, “The initiative will enable the fragrance retailer to expand its network and customer base.”