Skincare represents an important segment of the $500+ billion global beauty industry. With an impressive 4.75% compound annual growth rate, the worldwide beauty market is poised to reach $716 billion by 2025 and $785 billion by 2027. Skincare alone is projected to hit 169 billion by 2025, 24% of the overall beauty market. So, what is behind the growth? In part it is due to expanded distribution channels, including online sales, but more importantly, with the global standard of living increasing, more and more customers are willing to pay higher prices for higher quality products, particularly when it comes to natural, organic, or clean beauty products. Despite the growth in online sales, physical retail still accounts for 81% of sales. Beauty and skincare products are likely to remain one of those “experiential” categories that are destined to keep offline sales in check for the foreseeable future. All of this background brings us to the topic of today’s blog which is skincare displays and, more specifically, the value of creating a family of skincare displays. If you are interested in seeing more examples of suncare and skincare displays, check out our 2-part blog series: 20 Examples of Suncare and Skincare Display Ideas- Part I and Part II.
Within the world of physical retail, effective merchandising of skincare products is not only a competitive imperative, but it is a survival skill. There are 4 underlying forces at work that make retail merchandising so challenging for skincare products companies:
- Retail Channel Breath– Skincare products are sold through so many diverse retail channels- from luxury spas, salons, drug stores, department stores, mass market retailers, beauty stores, and other specialty stores. Each of these retail genres has a different set of merchandising requirements, not to mention differences in space availability and store décor.
- Competitive Intensity– As with most large and growing markets, the level of competitive intensity in the skincare industry is extremely high. With relatively low barriers to entry, the industry is brimming with new entrants and new brands, making it vital for established brands and new brands alike to stand out at retail.
- Product Proliferation– A common characteristic of intensely competitive markets is product proliferation. That is, in order to compete, companies strive to continually expand their product lines so they can offer the latest and greatest products to stave off the competition. This high rate of new product introduction makes it more difficult to future-proof their point-of-purchase displays since packaging types and sizes for future products may not fit their existing displays.
- Flight To Quality– As mentioned above, a significant component of industry growth is a result of customers who are willing to pay up for quality and for products that are natural, organic, and clean. The obvious implication for skincare merchandising is the importance of designing retail displays that create higher perceived product value and a premium brand image. Simply put, if you showcase an expensive skincare product on a cheap display, customers will think the product is cheap, particularly if it is not a well-known brand. Conversely, if you take a cheap product and display it on an upscale merchandiser, customers will think it is a premium product.
Taking into consideration the forces at work within the context of the overall skincare industry, we created a family of displays for a premium skincare brand called Knesko Skin. Knesko Skin offers a unique, holistic line of scientifically formulated luxury skincare products. What you will see in the examples below is the power of a cohesive and integrated set of displays that have the flexibility to work within multiple retail channels, the beauty to stand out among competitors, the configurability to accommodate future product offerings, and the upscale aesthetic to create a premium brand image and high perceived value.
We started with a 2-tiered acrylic collagen mask bar which included interchangeable graphics on the slanted front lip.
The smaller version shown below offers a more limited product selection and is ideal for space-constrained spas and salons.
The large and small version can be pushed together to create a bigger retail presence if space permits.
A library-style version of the collagen mask bar fits an equal number of SKUs as the large display but features a smaller footprint. We created a left and right version which could be pushed together to create a configurable larger display.
For smaller spas and salons who are interested in carrying a more limited product assortment, we created the 3-tier display shown below.
We designed a similar version without the interchangeable product graphic.
The 2-tied Knesko Skin serum bar showcases the brand’s beautiful serum bottles and includes a clear acrylic sleeve with an interchangeable product graphic.
We completed the counter display collection with a gemstone roller merchandiser which included Knesko’s line of gemstone rollers encased in clear acrylic with interchangeable graphics and screen-printed branding.
For the hotel and resort market, we made a mobile collagen mask bar cart. The cart featured strong and weather-proof solid surface construction, an ice bin to keep the collagen masks cold, a branded umbrella, and locking inside storage. It is the prefect way to create brand awareness within the luxury market while also creating a great vehicle to serve and pamper resort patrons.
Photo Courtesy of Knesko Skin
Photo Courtesy of Knesko Skin
Photo Courtesy of Knesko Skin
The industry characteristics and competitive dynamics underpinning the skincare industry pose a set of unique merchandising challenges for established players and new entrants in the industry. The solutions to overcoming these challenges and the lessons learned to achieve higher instore sales can be applied to many other industries who share similar characteristics.
Jim Hollen is the owner and President of RICH LTD. (www.richltd.com), a 35+ year-old California-based point-of-purchase display, retail store fixture, and merchandising solutions firm which has been named among the Top 50 U.S. POP display companies for 9 consecutive years. A former management consultant with McKinsey & Co. and graduate of Stanford Business School, Jim Hollen has served more than 3000 brands and retailers over more than 20 years and has authored nearly 500 blogs and e-Books on a wide range of topics related to POP displays, store fixtures, and retail merchandising.
Jim has been to China more than 50 times and has worked directly with more than 30 factories in Asia across a broad range of material categories, including metal, wood, acrylic, injection molded and vacuum formed plastic, corrugated, glass, LED lighting, digital media player, and more. Jim Hollen also oversees RICH LTD.’s domestic manufacturing operation and has experience manufacturing, sourcing, and importing from numerous Asian countries as well as Vietnam and Mexico.
His experience working with brands and retailers spans more than 25 industries such as food and beverage, apparel, consumer electronics, cosmetics/beauty, sporting goods, automotive, pet, gifts and souvenirs, toys, wine and spirits, home improvement, jewelry, eyewear, footwear, consumer products, mass market retail, specialty retail, convenience stores, and numerous other product/retailer categories.