Boots, the UK’s largest health and beauty retailer, is a firm fixture (and old favourite) on the high street.
In recent years, however, it has been facing increasing competition from both online and offline retailers in the beauty space. As well as pureplays like Glossier, drawing in a new generation of beauty addicts, supermarkets and high street competitors have also been tempting consumers with low prices and influencer collaborations.
Boots’ sales figures also suggest that people are heading elsewhere. In the last three months of 2018, sales decreased 5.9% year-on-year, while gross profit also fell 7.8%.
That being said, the retailer is fighting back, recently announcing a new strategy to re-position itself as the number one UK retailer for beauty.
Here’s more on Boots’ mission and how the customer is central to it.
New store format
A big part of Boots’ new strategy is a refreshed store format, which it plans to roll out in 24 of its biggest beauty halls this April. Instead of individual branded displays, Boots will create a more flexible space, made up of ‘trending zones’ and ‘discovery areas’.
There will also be live demonstrations, which will be carried out by beauty specialists that aim to offer shoppers impartial tips and advice (about all brands sold in-store). This is different to Boots’ traditional structure, which involves employees working on counters to represent specific brands.
The new set up is reminiscent of Ulta Beauty and Sephora’s layout, which involves a cross-section of price points, beauty workstations (and digital tech in Sephora’s case) to create an interactive and engaging customer experience. Indeed, it’s not surprising why Boots would look to the likes of Ulta Beauty for inspiration – the US retailer continues to generate growth, reporting a solid 6.5% increase in comparable store sales in Q4 2018.
In the UK, brands like Mac and Benefit also focus on the customer experience, using a combination of employee expertise and in-store events to engage shoppers in-stores. Boots is looking to catch up to this, and to let go of its (perhaps more soulless) drugstore-feel.
Investment in new brands
In previous years, Boots has launched one new beauty brand per year. In comparison to ecommerce sites like LookFantastic and Cult Beauty – this means the retailer’s product portfolio has remained decidedly limited.
Now, the retailer has announced that it will introduce 20 new brands to its stores in the space of the next six months, some of which are top sellers on the aforementioned beauty ecommerce sites.
Again, this is part of Boots’ aim to reposition itself as a market leader in beauty, and a retailer at the forefront of new and innovative brands. Indeed, this focus on variety and scope of product is what could give Boots an edge – one that trumps the limited focus of ecommerce sites (high-end brands) as well as high street rivals (that are focused on the other end of the price spectrum).
The combination of drugstore products and luxury brands means that it will, ideally, satisfy all types of beauty consumers.
Boots is getting a *major* makeover and you'll be rushing to your local high street https://t.co/AcgLcaCSih
— Boots (@BootsUK) March 10, 2019
A nod to social discovery
The way consumers find and shop for beauty has dramatically changed in the past few years, with social media playing a big part in this. Unlike previous decades, consumers tend to already know what they want to buy before they head in-stores, having researched products on Instagram and the endless beauty-related video content found on YouTube.
Interestingly, it looks like Boots is hoping to tap into this, as its new Covent Garden store is reportedly set to include a YouTube studio. Here, customers will be able to receive makeovers (and film it) and post the videos directly on social media. With user generated content proving effective for beauty brands like Glossier, Boots is likely to benefit from this type of advocacy online.
Meanwhile, this kind of in-store experience also allows the retailer to generate greater engagement from shoppers. If Boots was once a shop to ‘pop into’, it is now hoping its interactive and fun in-store elements will make it more of a destination – or at the very least a place to linger and experiment.
A wider shift to wellness?
The lines between health and beauty retail are beginning to blur, as an increasing number of brands widen out into the ‘wellness’ market. As well as the desire for paraben-free products, this means we’re also seeing an interest in natural ingredients, and brands that promote a general focus on health and wellbeing.
Although Boots already has a hand in this thanks to its pharmacy vertical, the retailer is hoping to further capitalise on the consumer’s willingness to spend in this area.
Speaking to Retail Week, Seb James, CEO of Boots, inferred that this might take the form of a ‘wellness algorithm’. In other words, this suggests that the retailer is hoping to utilise the swathes of customer data it generates from its app and advantage card to create greater relevancy for health-concerned consumers. In the same interview James says “we can infer pretty much everything about you, including what you worry about, from your purchase behaviour, but we don’t do that at the moment.”
Indeed, at the beginning of this year, it was announced that Boots had bought Wiggly Amps – a health tech company that provides a range of physical devices including blood pressure and weight management devices, and digital kiosks. This could mean – alongside its beauty vertical – we could see more of a focus on interactive healthcare solutions to guide shoppers in-store.
So, with innovation in beauty and healthcare at the forefront of its priorities, Boots looks intent on turning its heritage brand into one that’s both valuable and highly relevant for modern consumers.
Update April 3rd 2019:
Since writing this article, Walgreens Boots Alliance has announced that it has suffered its “most difficult quarter” to date. Like-for-like retail sales at its US stores fell 3.8% during the quarter. Meanwhile, its international division – which includes the Boots pharmacy chain — saw sales drop 7.1% year-on-year. As a result of this, Walgreens Boots Alliance has changed its 2019 outlook, suggesting that profits will not be increasing 7 to 12% as previously forecast.
So, what does this mean for the proposed new roll out of its new beauty strategy? In its statement, Walgreens Boots Alliance stated that its recent challenges have been due to trends like deflation and consumer market challenges. It also states that it plans to “be more aggressive” in is response to these rapidly shifting trends, which suggests that plans to “fully develop in-store neighbourhood health destinations” will go ahead. It remains to be seen whether or not the new store format will help turnaround Boots’ recent fortunes, but it will undoubtedly ramp up pressure for the retailer (and store employees) in the meantime. The stakes, as they say, just got higher.