Conversations & Insights November 20, 2012

Beauty: EU Supplement 2012



The Digital IQ Index: Beauty EU Supplement distills trends, best practices and case studies in Beauty across the EU-5 markets, and highlights digital leaders in each market as well.

Europe is the largest cosmetics and skincare market, registering 36 percent of global retail sales. In addition, the EU, led by France, is the largest exporter of Beauty products, making Europe the epicenter for influence globally for the $230 billion sector.

However the industry's focus has been squarely on growth markets in Asia and South America. The promise of developing markets coupled with economic challenges in Europe has resulted in an under-investment in e-commerce, new media and mobile in the EU.

As firms re-allocate creative and financial resources abroad is there a risk of atrophy in the foundation of the business?

In our 2012 Digital IQ Index: Beauty we suggested e-commerce is key to the industry's efforts to uncouple from traditional third party retail channels that are flat or declining.

In the EU, the opportunity is even more pronounced: 35 percent of French consumers, 36 percent of German consumers and 32 percent of UK consumers indicate they have made a beauty purchase online versus just 27 percent in the U.S.

However, EU e-commerce penetration and innovation lags the US significantly. In the U.S. 68 percent of beauty brands support e-commerce and an additional 27 percent link to online retail partners. In EU-5 markets Beauty e-commerce penetration is less than 50 percent.

With the exception of the UK, current digital ad spending for the EU-5 lags as well. Spending per internet user ranges from $118 in Germany to less than $80 in France, Italy and Spain compared with U.S. and UK estimates of $165 and $185, respectively.

Arguably even more powerful than paid digital ads is the opportunity for beauty brands to establish a direct relationship with the consumer. Despite slow adoption, several beauty brands' country-specific Facebook, Twitter, and YouTube communities now match, or even exceed, the growth and engagement of their U.S./global pages.

Estee Lauder Companies continues to invest in digital innovations in the EU. In 2011, Estee Lauder Companies registered an estimated $50 million in EU e-commerce sales up 28.4% from 2010.

Over the last 12 months, Estée Lauder brands spearheaded 8 of the 21 new e-commerce launches by beauty brands in EU-5 markets and 16 of the 29 EU-5 mobile site launches.

L'Oreal, who maintains a significantly larger offline business in Europe, achieved 10% growth with 24.8 mm in e-commerce sales.

This report is a supplement to our 2012 Digital IQ Index: Beauty and attempts to distill trends, best practices and case studies in Beauty across the EU-5 markets. In addition, we have highlighted digital leaders in each market.

Our aim is to provide a tool for identifying areas of strengths and weaknesses, helping brands achieve greater return on digital investments. Members can download the full report at

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