At ORQUEST we are committed to finding the best solutions for our clients. We believe that our advanced employee management software for retailers and restaurants can help companies get through periods of crisis such as this.
That’s why we focus our attention on the ability to respond of the top global beauty companies to the Covid-19 crisis, following the Q3 results from Walgreens, the owner of UK’s leading pharmacy and cosmetics brand Boots.
The numbers in this sector and the various strategic actions developed by these companies during this pandemic clearly demonstrates that technological disruption could make the difference between bankruptcy and success.
A quick overview at the cosmetics and perfume market
The beauty and personal care market in the U.S. was worth $86 billion in 2017, according to Euromonitor, and in Western Europe, the region where more health and beauty stores opened than any other retail sector in 2016, it generated $94 billion in sales, according to a CBRE report. Sales of beauty and personal care products in Asia increased by 6.4% ($149 billion) in 2017, while Inkwood Research estimates that this market will grow to $750 billion globally by 2024, registering a CAGR of 4.3% during the forecast period 2016-2022.
In addition, beauty retailers have to deal with a new type of customer who demands shopping experiences that he/she can’t get by buying online.
People who go to a cosmetics store want to discover new things and feel inspired, and the best stores in this sector guide customers through that experience.
Health, beauty and cosmetics stores with historical traffic data have a huge advantage. They can schedule shifts and tasks based on past customer behavior, anticipate seasonal peaks in activity and recurring “peak hours” to ensure that someone will always be available to provide the right advice at the right time.
Patrick Chiron, Retail Intelligence Director, Douglas Spain, confirms this demand for technological evolution by referring to “…that nothing will ever be the same again and we all have to reinvent ourselves: manufacturers and retailers. Products cannot be launched as before because the consumer no longer has the same requirements. The company that knows how to reinvent itself will survive“.
The example of technological disruption in Boots UK’s physical stores
There has been no more challenging time for the beauty market.
All actors have to adapt quickly to this new Covid-19 environment. The closure of physical stores for twelve weeks in the UK during the pandemic, the shift to online shopping and the perspective of a global economic recession means immediate action must be taken by retailers to ensure survival.
The consequences of the lockdown are obvious and inevitable.
A clear example is health and cosmetic retailer Boots. A quarterly sales fall of 48% for Boots UK and 72% for Boots Opticians has forced the company’s board of directors to make the decision to reorganize the Boots store employee structure, the closure of 48 Boots Opticians and an additional 20% headcount reduction in the UK support office. These changes will impact more than 4,000 jobs (7% of the workforce).
A difficult decision caused by the drastic fall of the footfall into worldwide stores. Footfall, a measure of how many people visit a shopping center, in Boots U.K. stores fell by 85% in April as shoppers were advised to only leave home for essential goods.
However, as Sebastian James, Managing Director Boots UK, explains, the pandemic has served:
“… to accelerate our Transformation Plan, allowing Boots to continue its vital role as part of the UK health system, and ensure profitable long-term growth. By doing this, we are building a stronger and more modern Boots for our customers, patients and colleagues.“
Boots is trying to maintain its leadership position and increase profits by focusing on developing a digital optimization of its physical stores. In order to achieve this goal, they will use customer data collected through their Advantage Card, a loyalty card they have been using for several years. Building on that approach, the company recently announced its strategic partnership with Microsoft and Adobe to create a marketing technology and customer data platform to deliver personalized healthcare and shopping experiences.
Also, the beauty and pharmacy company seeks to return more power to local staff to create services and experiences that are tailored to consumers from each particular area. Having that local connection is especially vital now with consumer habits likely to continue changing as the crisis expands.
Just as Boots UK and Ireland’s chief operating officer, Tracey Clements, says: “It’s never been more important to understand customers; to understand how your customers live, as much as how they shop. If you understand how people live, you then know how they’re going to shop; whether they’re driven by value or they’re driven by promotion or they’re driven by convenience.”
The trend is clear.
Seeing brands as powerful as Boots UK and Douglas are using the crisis to focus all its efforts on technological disruption, is an inspiration for the sector. It is an appropriate, yet needed, time to maximize the store potential through advanced technological solutions.
At ORQUEST we are aware of this need and thanks to our retail expertise and focus we would like to show you the strength of the workforce management software that optimizes customer service and generates a real impact in beauty retail sales.
That is why we developed KPI Management Freemium, the tool where you will be able to increase your Footfall, as well as other KPIs. This specialized solution for Retail gives you the opportunity to track the main KPIs of your store, compare and analyze them, and make decisions based on data in order to maximize your results.
