Launching a brand in Europe is the opposite of a sprint — it’s a beautiful marathon.
“When you get it right, it can become a super loyal, high value region,” said Katrin Hermann, vice president of global assortment at Douglas Group, during WWD’s annual Los Angeles Beauty Forum on March 26.
Hermann discussed what it takes to succeed in the European market and where brands should direct their focus. To start, the retail executive gave a brief background on Douglas, the number-one premium European retailer. Originally from Germany, Hermann said the business now operates in 22 markets, with just shy of 2,000 stores and 18,000 beauty advisors.
Katrin Hermann at WWD’s annual Los Angeles Beauty Forum.
Allie Joseph
Despite macroeconomic headwinds, the opportunity and the growth of the premium beauty market is huge, continued Hermann. “[It’s] actually the largest in the world, with over 100 billion of sales. We have a lot of inhabitants, so twice the size of North America, and quite a significant GNI (gross national income) as well, which sets up very well for trade,” she said.
The biggest barrier to entry is the compliance setup. “The regulatory is one of the strictest in the world, but the good news, once it’s done and sorted out, it opens the whole of Europe as a market,” Hermann said.
At the moment, fragrance represents more than 50 percent of sales, the majority of that being luxury. That said, niche and founder-led fragrances are on the upswing, at Douglas especially. On the smaller end of the scale is hair care, which currently comes in at 5 percent. However, the category is showing fast growth.
When it comes to the consumer, Hermann said: “Europe is aging. Our average age is about 44 years. But here’s the twist. The older generations are telling us that they’re really heavily influenced by Gen Z. Gen Z is influencing what they buy, which products they choose, what they talk about to their friends, when it comes to beauty brands as well.”
With that, more than half of Gen Z (ages 13 to 28) reportedly prefer shopping in-store. “Stores still rule. Sixty-seven percent of all the sales in beauty and in premium beauty, they’re still done in brick-and-mortar,” said Hermann, noting that the purchasing decision comes down to value proposition, product performance and brand storytelling.
To wrap up her presentation, Hermann offered the audience a few pieces of advice: be strategic when picking where to launch the brand first, find partners to aid the regulation and compliance approval process, show up with proof of formula and use retailers to unlock customer trust. “It’s very good idea to bring some good shoes coming to Europe, because you’re going to see a lot of stores. We’re here to unlock potential opportunities, so please don’t hesitate to reach out,” she said.
