Sell your skin care products in pharmacies

Pharmacies are estimated to have a 28% share ofthe skincare market in Europe, compared with 20% for perfumeries. And this share is set to grow as pharmacies bring in more skincare brands and consumerslook for more dermatological type solutions for their needs. “[In France] the biggest pharmacies are gettingmore sophisticated in terms of merchandising, inventory control and managingtheir cash.

They are trying to form coalitions to get better costs and shareback office systems,” explains one beauty executive. “Pharmacies are verycash-oriented and they demand huge margins so they will negotiate hard if they aregoing to give a brand space,” he adds. In some of these larger locations, theskincare offers can rival the neighborhood perfumery. The channel has movedfrom purely therapeutic skincare to embrace brands with more luxury positioning,such as Nuxe, or Caudalie.However, the sector is highly fragmented whichmeans that sales reps often have to visit each pharmacy individually. Inaddition, assuring a promotional plan is difficult due to competition amongbrands.

This also means challenges when it comes to training, which has to bedone on a location-by-location basis and controlling brand image, which istough when dealing with independent retailers.Prestige beauty groups including Estée Lauderand Clarins have tested the potential of the pharmacy sector, through itsDarphin and Kibio brand respectively. “These companies are thinking about whatthey can do in the channel not through their main brands, but through anacquisition or with another brand in the group,” comments the beauty executive.

Organic beauty brands have also been steppinginto pharmacies, although many of the smaller brands have shown disappointing sales.A recent study from Paris-based Cosmetic Monitor notes that France’s 22 500pharmacies, 61% sell certified organic cosmetics, accounting for 8% of thechannel’s skincare sales. But sales in the channel are declining, which thestudy attributes to pharmacists’ lack of knowledge of certification standards,prices that are too high and insufficient support for small brands. “Last yearpharmacies made space for natural and organic, but it’s been a disappointment.It was the big trend and they gave the category too much space, so now they aremaking choices, and are going with bigger natural brands that have more recognition”,says the executive.

Source : BW confidential May-June 2011

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