Until a few years ago, Superdrug was losing in the UK retail battle against long-time health and beauty rival, Boots. 

Fast forward a couple of years and it’s a different story. Superdrug has just reported a 10.4% increase in revenue in 2016, with profits soaring 41% to £80.4m for the 53 weeks ending 31st December.

So, why the big turnaround? Here’s a look at Superdrug’s strategy, and the reasons why it’s currently enjoying a resurgence.

Targeting younger shoppers 

Boots is the largest health and beauty retailer in the UK, with over 2,500 stores compared to Superdrug’s 850 or so. It’s also got the longest history, as well as a large and loyal consumer base that includes people of all ages and budgets.

With Boots catering to such a large demographic, Superdrug has changed its strategy to target a more specific set of consumers. While its rival concentrates on its own-brand beauty range of Botanics, as well as more mid to high-end brands such No. 7 and L’Oréal, Superdrug deliberately targets younger consumers interested in more affordable cosmetics. 

Cheaper brands like MUA, GOSH and Make-Up Revolution, despite being less well-known, are now sold in most stores.

So, alongside a general focus on affordability, how exactly does Superdrug entice younger consumers?

In the face of low-price beauty launches from the likes of Primark, H&M and New Look, Superdrug’s work with influencers certainly sets it apart. The retailer struck a deal with Zoella in 2014 to sell her beauty range, with the collection going on to break sales records. 

Upon launch, the Superdrug website saw twice as many visitors as usual, with 25% of new visitors clicking on the Zoella range. Since then, Zoella has gone on to release two new collections, both resulting in similar success for Superdrug.  

Other popular influencers such as Tanya Burr and Fleur de Force have also partnered with Superdrug to sell exclusive make-up and cosmetics collections, meaning the retailer has been able to capitalise on their existing and loyal audience. 

In-store experience

Influencers are not the only way Superdrug has aligned itself to younger shoppers. In 2014, it rolled out its new ‘Beauty Studio’ concept, offering beauty services such as threading, manicures and eyelash extensions in-stores. In select locations, it also introduced digital displays and an interactive ‘selfie’ area to encourage shoppers to share their makeovers on social media.

Elsewhere, and even in stores that do not include a Beauty Studio, the design and layout of most stores is used to differentiate itself from Boots’ pared down approach. The retailer often uses bright colours and illuminated lettering, bringing a fashionable element into stores. Again, cosmetics is a huge focus, with this area often much larger than other areas.

Another way Superdrug has enhanced the in-store experience is to introduce Wi-Fi and its own radio station. ‘Superdrug Live’ is used to support brand campaigns and promotions, as well as create a unique store environment through music.

Healthcare focus

Alongside its Beauty Studio, Superdrug has also expanded into the healthcare market, placing much more focus on its status as a pharmacy as well as cosmetics retailer.

While its stores used to have a 70/30 split between beauty and health products, some stores now have a 60/40 strategy, with the retailer introducing consultation rooms and services from pharmacists and nurses, such as flu vaccinations. 

Interestingly, Superdrug has also introduced its own brand of morning-after pill, selling it at half the cost of the average pill sold over the counter. The move has been praised by the British Pregnancy Advisory Service, which applauded the retailer for giving women greater choice and accessibility. 

There’s no doubt that Superdrug’s focus on healthcare is succeeding – sales of this category grew 12% last year.

Rewarding loyalty

Superdrug’s loyalty program has also grown over the past few years. In fact, membership is said to have doubled over the past two years, with the retailer having 19m registered members by the end of 2016. 

The Health and Beauty card is a fairly standard retail loyalty system, rewarding shoppers with points that can be exchanged for discounts. However, Superdrug adds value with exclusive offers and perks, also rewarding long-term loyalty members with exclusive gifts. Regular promotions like ‘Treat Thursdays’ – which offers exclusive discounts – provide incentive for members to collect and spend points.

The Health and Beauty card also works in conjunction with the Superdrug app, allowing shoppers to collect and monitor points as well as access offers. By aligning the app and loyalty program, Superdrug has also been able to improve targeting, offering deals and promotions to customers based on their location or past purchase history.

Improved online presence 

While most consumers might naturally think of Superdrug in terms of physical stores, the retailer has been making strides to improve its ecommerce capabilities – as well as its general digital presence.

With improved delivery and click and collect, it offers customers more flexibility than before – perhaps one of the main reasons its saw a 60% growth in online sales last year.

Another reason could be its Online Doctor service, which allows customers to consult with a doctor on various medical issues and arrange prescription for collection or delivery. The popularity of the Online Doctor has spurred on expansion of Superdrug’s healthcare services, with the retailer recently announcing that will open 30 new stores and create 600 new jobs in the UK.

Meanwhile, Superdrug uses social media to reach out and interact with consumers. Its Twitter and Facebook strategy involves a lot of user generated content, with the brand also using lifestyle and pop-culture inspired content to engage younger, female consumers.

In conclusion…

Making both beauty and healthcare accessible, Superdrug has managed to carve out a niche in the market, making its high street presence almost indispensable to consumers.

While it previously stood in the shadow of Boots, its strong growth and expansion plans means it is a worthy competitor – possibly even winning in the fight for the attention of today’s young consumers. 

Related reading:

Nikki Gilliland

Published 14 July, 2017 by Nikki Gilliland @ Econsultancy

Nikki is a Writer at Econsultancy. You can follow her on Twitter or connect via LinkedIn.

507 more posts from this author

Comments (2)

Jon Ewing

Jon Ewing, Creative Director at inframes.com ltd

Interesting insights, but please, in British English it's a "loyalty programme", not a "program".

2 months ago

Avatar-blank-50x50

Lena, Director at Turtlereality Ltd

Interesting article - Superdrug are also well-known in the growing cruelty-free beauty market for their own-brand products which carry the certified Leaping Bunny logo from Cruelty Free International. Many people shop here for that reason too.

2 months ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Digital Pulse newsletter. You will receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.