Keep up with today’s consumer:“This is Beauty & Health”

COMEOS | FEBRUARY 15, 2017 . COMEOS | FEBRUARY 15, 2017.

“Beyond the perfume bottle…”Valentine insight in the press

30.000 stores willdisappear the coming years.

Many initiativessupport the impactof retail. Every day.

A bright future aheadDigital opportunities for offline shopping experience

“brick and mortar retailers will need to react to changing consumer preferences”

“brick and mortar retailers will need to react to changing consumer preferences”

“brick and mortar retailers will need to react to changing consumer preferences”

The best source? Your consumers. Clients and non-clients.

We help retail brands understand & act onever-changing consumer behaviour.

We help retail brands understand & act onever-changing consumer behaviour.

We help retail brands understand & act on ever-changing consumer behaviour.

aWe allow brands to obtain oaptimal customer insightsssand aurn this knowledge insto livaaaing customer stories

We allow brands to obtain optimal customer insightsand turn this knowledge into living customer stories.

Bringing brands & consumers closer together.

From understanding to impact for many retailers.

3.600+ CONSUMERS 3.500+ CONSUMERS OVER 40 BRANDS OVER 50 BRANDS 11.000 EVALUATIONS 11.000 EVALUATIONS 500.000+ DATA POINTS 900.000+ DATA POINTS

Different categoriespolled.

Body care

Hair care

Makeup

Health

Skin care

Perfume

Insights, tailoredfor your brand.

A custom insights report tailored to your brand

Interactive dashboard with all industry & brand results

A comprehensive reporttailored to your brand

Interactive dashboard withall industry & brand results

A custom workshop about challenges & opportunities

A custom report with tailored insights

A tailored brand report with (personal) results for the 10 insights shared

The event presentation with industry results shared

6 free category reports with generic insights

INCLUDED FOR ALL VISITORS

6

What are you here for?

Who is your consumer?.

.18.

.feeling.

.€765.

Uses perfumeon a daily basis.daily.

Buys make-up from 4.2 stores .4.2.

Chance of buying beauty & health online .50%.

Prefers Kruidvat for her hair care needs

Goes shopping +12 timesa year for hair care.12.6x.

Spends €765per year

Knows 18 stores forher body care needs

Prefers stores for their‘good feeling’

.staff.Considers your staff as the 2nd best persuasive channel

.offering.

Uses perfumeon a daily basis.daily.

Buys make-up from 3.4 stores .3.4.

Chance of buying beauty & health online .48%.

Prefers Planet Parfumfor her make-up needs

Goes shopping 14+ timesa year for hair care .14.2x.

Spends €860per year

Knows 16 stores forher body care needs

Prefers stores for theirallergy focused offering

.staff.Considers your staff as the 2nd best persuasive channel

.Louise..Allergic shopper.

.€860.

.16.

Michèlle34, Charleroi

Biased non-client

Elise27, Bruges

Brand loyal

Linda47, AntwerpBig spender

Louise22, Marche

Allergic shopper

Maarten38, Sint-Niklaas

Traditional shopper

Iris29, Ledeberg

Hoarder

Understandingthe needs of allshopper segments.

Interested in more? Questions?Subscribe for our regular updates on www.true-north.be/this/beautyandhealth

Or contact our Sector Lead Beauty & Fashion: elize@true-north.be

1 KEY TAKEAWAYS FRO M THIS IS BEAUT Y & HEALTH .

KEY TAKEAWAYS FROM THIS IS BEAUTY & HEALTH.

20+ FILTERS BRAND-SELECTION BRAND SELECTION 6 SUB-DOMAINS 6 SUB-DOMAINS 20+ FILTERS 20+ FILTERS 500.000+ DATA POINTS FREE EXTRA REPORTS 20+ FILTERS

Beauty & health, a market. of daily habits..

#1

We are all beauty & health consumersMarket of daily habits

Grafiek met 12-tal balken voor % gebruik+Aanduiden health, beauty & care+Telkens vermelding top 3 producten

+80%of shoppers use perfume, hair care, body care and skin care products

% of categories used by the average shopper

Very often on a daily basisMarket of daily habits

Grafiek met 12-tal balken voor % gebruik+Aanduiden health, beauty & care+Telkens vermelding top 3 producten

When used, most categories are part ofa daily habit : perfume, make-up, skin & body care are used daily by over 70%.

Usage frequency for different categories

Care as a traffic boosterMarket of daily habits

Grafiek met gebruiksmomenten vs aankoopmomenten>Dagelijks/relatief hoog gebruik parfum / make-up <> vaak seizoen tot halfjaarlijks aankopen+Bijna dagelijks gebruik hair & care <> maandelijkse aankopen

70%buys hair care

products at least monthly

50%buys perfume two times orless a year

Buying frequency for different categories

Yearly beauty & health budget of € 765Market of daily habits

1 grafiek met gemiddeld budget individu + hoe samengesteld (volgens % van wie wat gebruikt) als stacked bar chart +Eventueel extra stacked bar charts voor paar profielen:

● Jongeren● Ouderen● Allergenen● Bepaald type

Price-sensitive buyers buy less than half of the average shopper

Big spenders spend over € 1.400 and overperform on care & institutes mainly

Budget per category for different segments

The end of category. leadership..

#2

Kruidvat as an overall strong leaderCategory leadership

Grafiek met leaders per domein(icoon + logo merk?)% hoogste + % average van den top 10 / bought

Eventueel top 3?

Retailers with highest market penetration per category

What is category leadership?Category leadership

‘Category leadership’ applies for those brands that have a significant benefit over

its competitors for a specific category, like perfumes, make-up ...

second most bought brandfor perfume

ICI PARIS XL as the only category leaderCategory leadership

Grafiek met plateau’s (voldoende uitvergroot) voor top 10 spelers+1 snelle voor ALLE spelers

Category leadership geldt dus ENKEL voor parfums > IPXL 2x volger, minder spelers, kortere long tail

Maar 1 speler dusRetail brands ranked by % of market penetration

Significant benefit of 34% compared to the 2nd most bought brand

mar

ket p

enet

ratio

n

Only 5 brands of +15% market penetration, compared to 10 for bodycare

Market penetration for all brands in perfume & bodycare category

Category leaders demonstrate leadership in every wayCategory leadership

Funnel voor IPXL

scores best-in-class for every step in the funnel

Marketing funnel for ICI PARIS XL compared to the top 5 for perfumes & the market (of 50 stores)

Focus on segment leadership insteadCategory leadership

Mar

ket p

enet

ratio

n

#1

#5#5

#1

has an advantage of 10% over the 2nd player for a specific segment and switches places with the leader for the category

Market penetration for Planet Parfum & Kruidvat for 2 different segments for make-up

A fragmented landscape. of price players..

#3

Price players as the biggest threatPrice players

“Verder bouwend op de long tail van zonet > heel wat spelers van alle kanten zetten druk, in elk van de 6 deel-markten.”

Grafiek met score voor 1 speler, vb IPXL+Geaggregeerde scores voor

- Supermarkten- Value spelers- Service players (apotheek, kapper,

instituut)- Kledingzaken & ketens- Lokale spelers- - Specialisten

Price players take considerable market share for most categories

Estimated market share for different categories of retailers for all categories

Understand who your relevant competitors arePrice players

Bepaalde speler er uitpikken (vb medi-market)& daar kijken naar “relevante” concurrenten cfr C&A grafiek (abs & rel)

BEIDE SAMEN om goed verschil te zien tussen beidevb. telkens top 3 → absoluut = Kruidvat in top 3 / #1 zelfs→ relatief = totaal ander beeld)

Eventueel zelfde “kleur” ofzo om aan te geven of het zoals in vorige grafiek “value” of “kleding” is

Remarkable:Price players are strong competitors, also in the broader ‘health’ category

% of shoppers buying at other retailers for health category - case for Newpharma.be

% of Newpharma.be shoppers that shop at a competitor

% of shoppers from a competitor that also shop at Newpharma.be

Vice versa, only

1 in 8Di clients buys at

Newpharma

Almost

1 in 4clients of Newpharma buys from Di or Colruyt

Omni-channel as the. new normal..

#4

Online impact for beauty & health significantOmnichannel

About

70%buys products online.

Beauty & health are bought by

50%of Belgians,yet not dominated by pure players.

% of shoppers that shop online for all products & beauty and health

1 in 5online shoppersshop at YvesRocher.be.

Digital players interesting for ‘online shoppers’Omnichannel

“Druk van online daarnet ook al aangehaald maar ook hier zien we dat de pure online spelers het sterktste staan op hun domein wat online impact betreft”

= grafiek met winkels met grootste aantal online kopers

+ vermelding gemiddeld+ vermelding 1 merk als vergelijking

Online players show high penetration for ‘online shoppers’, up with 230% on average.

Remarkable: Yves-Rocher’s online impact is online-driven, whereas most brands are omnichannel-driven.

Market penetration for e-stores for ‘online shopper’ segment

Online impact on multiple levelsOmnichannel

10% share their opinion about beauty & health products, 26% read them

Google search strong impact for online players, not for offline retailers

Offline retailers

Online retailers

Influenced via Google search

Influ

ence

d vi

a th

e st

ore

40% searches for broad category topics rather than brands

90% check Dr. Google for symptoms before seeinga doctor

The (offline) answer to Dr. Google?Omnichannel

Impulse drives media spent,. not shoppers..

#5

Media spent is impulse gifting relatedImpulse buying

Valentine’s Day

Mother’s Day

Father’s Day

Summer sales

End-of-year

Draft estimate of budget spent over one year for the average beauty & health retailer

70% buys beauty & health gifts,but men buy on the safe side: 80% buys perfumes

It matches the gifting focus of beauty & healthImpulse buying

% dat gifts koopt en waaraan men het uitgeeft

Categories most bought by men & women as a gift

Yet, most Belgians stock up on suppliesImpulse buying Grafiek met ALLE types

+ Hoarder aangeduid(voor PERSO: enkel bij hoarder je perso score)

1 van een 3-tal %’n uit onderzoek dat aangeeft dat men inslaatCfr % voorraad, % meerdere per keer, % profiel, …+Hoader vergelijken met niet hoarder > frequentie (hoger) + budget (=)Eventueel voor 1 specifiek categorie, eventueel voor bep merk tov gem+Voor bepaald merk & categorie anders?+Verwijzing naar feit dat men alle 3 maanden koopt doch dagelijks gebruikt

+60% stocks up on supplies, it is by far the largest behavioural segment

How others “plan” their

shopping trip: promotions,

rebates, novelties.

% of specific behavioural segment in the average market

Interested in more? Questions?Subscribe for our regular updates on www.true-north.be/this/beautyandhealth

Or contact our Sector Lead Beauty & Fashion: elize@true-north.be

Price & promotions drive. smart buying trend..

#6

Promotions as a winning argument to attract hoardersPrice & promotions

<vb campagne tonen>

Meesten spelen er op in met campagnes als 2+1Verklaart ook het succes van de supermarkten & de prijs spelers

1 in 4buys mainlyor only when a promotion applies

1 in 4 mainly buys when a promotion appliesPrice & promotions

% dat enkel tijdens promotie koopt+Bij uitbreiding % dat voornamelijk met promoties koopt=Veel

// 3 bars

ZEEMANattracts45% promo buyers, in contrast with Mac Cosmetics that attracts only 9%

45% 9%

% of promotion-sensitive buyers for ZEEMAN buyers & Mac Cosmetics buyers

Price awareness in health risingPrice & promotions

% weet nietMaar velen wel alFarmaline.be op TV maakt het transparanterMedi-Market opmerking toevoegen

6 in 10is unaware that prices for medication without subscription differ between pharmacies.

“The aware” are 14% more online-savvy shoppers compared to the unaware.

% of shoppers that are aware vs unaware about price differences for pharmaceutical products

Offering & ‘good feeling’. drive buying decisions..

#7

Expectations center around offering over identityDrivers for purchase

Verwachtingen voor merk & winkel deels gelijklopend

Maar verschil A en B

Identity

Offering

ThoughtLeadership

CustomerExperience

CustomerCentricity

ValueProposition

PricingStrategy

ChannelApproach

Soft indicators

Hard indicators

Beauty & health: offering-driven, identity-supportedDrivers for purchase

Beauty & health store preference is based on offering mostly, secondly on “good feeling”.

(top 10) % of derived importance for selection of 22 aspects that drive retail preference

Remarkable:Although 1 in 4 is promo-sensitive, promotions are only the 8th most important driver for store preference.

Drivers for retail preference for average shopper

Different segments, different reasonsDrivers for purchase

Drivers for the average shopper Drivers for allergy-sensitive

1 Quality of the offering Quality of the offering

2 The shop gives me a “good feeling” Offering for specific allergies

3 Offering for different skin types Price / quality ratio

4 Price / quality ratio The shop gives me a “good feeling”

5 The size of the offering Respect for people & planet

#2#5#4#2#1

#18

#5#3 #3#4

#15#8#5

Allergy-sensitive shoppers have

different expectations:

allergic-focused offering & more

sustainability-minded

(top 5) % of derived importance for aspects that drive preference for 2 segments (average & allergy-sensitive)

Drivers for retail preference for average shopper vs. allergy-sensitive buyer

Working areas as a result of relevant benchmarkingDrivers for purchase

EXPECTED MORE

EXPECTED LESS

UNDER DELIVERED

OVER PERFORMS

Brand underdelivers on aspect, yet shoppers don’t expect them to offer it.Advise: FOLLOW UP

Brand underdelivers on aspect and shoppers have

high expectations.Advise: IMPROVE

Brand overperforms on aspect, yet shoppers don’t expect them to offer it.Advise: COMMUNICATE

Brand overperforms on aspect and shoppers have

high expectations.Advise: KEEP

Working areas as a result of relevant benchmarkingDrivers for purchase

EXPECTED MORE

EXPECTED LESS

UNDER DELIVERED

KEEP

IMPROVE

COMMUNICATE

FOLLOW UP

?

working areas for 4 brands for ‘good advice’

OVER PERFORMS

From purchase to. brand & store loyalty..

#8

Brand loyalty is high, 20% never switches product brandsDrivers for purchase

% trouw / mix / switch behaviourPer categorie

(stacked column chart?)

→ aangeven dat dit betekent dat je met juist categorie mgmt wel klanten kan binden

60-75%is loyal to one or a limited # of brands, depending on the category

% of loyalty for product brands

In contrast, store loyalty is a challengeDrivers for purchase

A mere

25-45%is loyal to one or a limited # of stores, except for perfumes (+60%).

% of loyalty for retail brands

Calculate brand equity to know your loyalty potentialDrivers for purchase

equity = (% of lovers) x (1 - % of ‘nevers’)

Brand

guarantee for high retention leaves potential for acquisition

Store loyalty - or preference - is rarely “just average”Drivers for purchase

Gem % lovers vermelden+Lover / hater graph→ meerdere merken plotten→ bepaalde merken exemplarisch uitnemen

39%of clients considers their perfume store a ‘favorite’, yet most brands are not average

Lover - hater graph for perfume

LOW % OF HATERS

HIGH % OF HATERS

LOW

% O

F LO

VER

S

HIG

H %

OF

LOVE

RS

Services as an. opportunity..

#9

60% would buy Institute services from a b&h retailerServices as an opportunity

3 bars:1) % dat het vandaag al afneemt2) % van 1) dat het zou afnemen bij b of

health winkel3) % van 1 DIE ook uw klant is die het

zouden afnemen

Voor pres = 1 & 2 enkel

60%shoppers considers beauty & health retailers trustworthy for beauty treatments

Many other services such as tooth bleaching or dietary advise are still considered to require an ‘expert’

% of shoppers that consider a retailer trustworthy to offer a specific service

The upsell potential of Institute servicesServices as an opportunity

gemiddeld budget per categorie ALS je ze gebruikt > dan is INSTITUUT een belangrijke

> 25 % gebruikt het > geven gemiddeld €264 uit

1 in 4 womenalready frequents Instituteservicestoday

€ 265/year is the average spent for women that frequent institutes, with big spenders spending over€ 380 on average.

To differentiate. as the final goal..

#10

Higher differentiationhas a positive impact on store frequency, basket size, brand love & online conversion amongst others.

Why differentiation matters?Differentiation

To become an aspirational brand...Differentiation

Aspirational brands are more known & different.They often have the possibility to get a price premium for their products

Unconvential brandsare focused or niche brands that will NEVER convince all, but are very distinctive compared to others

LESS CENTRAL

MORE CENTRAL

MO

RE

SIM

ILA

R

MO

RE

DFF

EREN

T

Rituals as a more distinct brand from its competitorsDifferentiation

CD-Graph alle merken voor 1 categorieMake Up+Aantal gehighlight

Centrality - differentiation graph for body care

LESS CENTRAL

MORE CENTRAL

MO

RE

SIM

ILA

R

MO

RE

DFF

EREN

T

is more distinct, yet lacks centrality.Boosting centrality is advised.

as a price player is more central for the body care category.

Positioning changes for different segmentsDifferentiation

CD-Graph alle merken voor 1 categorieMake Up+Aantal gehighlight

Centrality - differentiation graph for body care / 55-65 segment

LESS CENTRAL

MORE CENTRAL

MO

RE

SIM

ILA

R

MO

RE

DFF

EREN

T

“wins” centrality & differentiation for the older generation for body care.

is still very different, yet even less central for the 55-65.

Associations support differentiating positionDifferentiation

CD-Graph alle merken voor 1 categorieMake Up+Aantal gehighlight

ICI PARIS XL

word cloud shows many

identity-driven associations

like scents, zen, delicious, pleasurable …

Rituals

word cloud for associations for clients of ICI PARIS XL and Rituals

WHAT THIS MEANS AS AN OVERALL CONCLUSION?

WHAT THIS MEANS AS AN OVERALL CONCLUSION?

Become a LOVE BRAND, DISTINCTIVE from your competitors.

Choose your SEGMENTS & OVERDELIVER on expectations.

Let CONSUMER BEHAVIOUR understanding guide you.

Michèlle34, Charleroi

Biased non-client

Elise27, Bruges

Brand loyal

Linda47, AntwerpBig spender

Louise22, Marche

Allergic buyer

Manon38, Sint-Niklaas

Influencer

Iris29, Ledeberg

Hoarder

What shopper segments will you focus on?

THANKS..

Interested in more? Questions?Subscribe for our regular updates on www.true-north.be/this/beautyandhealth

Or contact our Sector Lead Beauty & Fashion: elize@true-north.be