Superdrug’s stellar full-year results were driven by strong sales in its cosmetics division as the retailer contours its business for a younger shopper.
Long gone are the days when Boots would step in the way of Superdrug as the rivals competed for sales, causing great detriment to Superdrug’s performance as it experienced four consecutive years of sales decline in the UK until 2014.
Instead of trying to rival market leader Boots and faltering, Superdrug has instead carved out its own unique selling proposition centred on its younger customer base – understanding their purchase drivers, affordability and experience needs – which drove revenue to increase 10.4% during 2016.
Beauty has remained central to this strategy, which saw Superdrug achieve a 30% market share in cosmetics alone.
Despite the rise of beauty newcomers on the high street, seeing the likes of Primark and New Look develop affordable cosmetic ranges for the younger customer, Superdrug has remained at the forefront of its customers’ minds through understanding the influence in which celebrities have on its customer base.
Not only has Superdrug tapped into this market by developing exclusive ranges with vloggers Zoella and Tanya Burr – which do exceptionally well during gifting periods, but it has also utilised social media to align its image with celebrity sponsorships associated with the branded goods it stocks – meaning its celebrity advertisement comes at very little cost.
“Superdrug frequently interacts with its followers through relevant entertainment material to drive engagement”
Videos featuring young influencers Cara Delevingne and Rita Ora regularly feature on its social media pages, in association with Rimmel London, while it frequently interacts with its followers through relevant entertainment material to drive engagement, such as the popular TV show Love Island.
When it comes to beauty, it’s also important to note that Superdrug was one of the first retailers to understand the importance of delivering a strong in-store experience – an area which many retailers are only just discovering – which has seen like-for-like sales grow 7.8% during its latest financial year.
Beauty services, such as eyebrow bars and nail treatments, have been rolled out to over a quarter of Superdrug’s stores, designed to be affordable and accessible.
Under its Beauty Studio store format, customers are also encouraged to share selfies on social media through interactive mirrors in-store.
Aside from beauty, Superdrug has proved it isn’t afraid to compete against health specialists such as Holland & Barrett.
“Sales of its healthcare and wellbeing products grew strongly at 12%, supported by understanding its younger demographics’ interests”
Sales of its healthcare and wellbeing products grew strongly at 12%, supported by understanding its younger demographics’ interest in affordable diet and fitness products, which saw the business take a risk when partnering with protein brand Protein World.
The convenience of its Online Doctor service also can’t be ignored.
While it’s difficult to say any retailer is safe in these troublesome years, it’s clear that Superdrug has carved out a niche that will keep it in good stead.
Superdrug brings fun to buying beauty, ease to keeping healthy, experience to customers’ in-store, and newness to drive sales.
Given its understanding of its market and willingness and ability to adhere to change, it’s perhaps acceptable to say that Superdrug finds it hard to miss a trick.