We are all very familiar with shopping from mainstream retailers, whether from a department or grocery store (high street and online), online shop (specialist and general), perfumery or pharmacy. However, not all products are available in all outlets. Cosmetic manufacturers and brand owners may decide to only sell through selected retailers to maintain the control of the brand and thereby ensure the full consumer experience required by the customers.
What is selective distribution?
Selective distribution is a system in which suppliers rely on a few, specialist intermediaries to sell their products. In the cosmetics and personal care industry, it concerns products sold in perfumeries, department stores, pharmacies, spas, beauty institutes and hair salons. It gives consumers access to a wide palette of innovative products and advice provided by professionally trained advisers, focused on their specific needs.
Selective distribution is driven by a large number and a variety of retailers, ranging from SMEs to larger retailers, with over 17,000 luxury outlets and about 110,000 beauty salons, in addition to around 150,000 pharmacies in the EU.
Strict legal parameters on selective distribution networks offer protection from free-riding, which could potentially undermine the investment of the brand owner and the retailer in innovation and quality.
Why selective distribution is beneficial to consumers
Selective distribution outlets bring a variety of benefits to consumers, including the following:
- Choice: a range of products that meet the highest consumer expectations
- Service: professionally trained sales forces to advise consumers
- Experience: creation of a brand environment supported by marketing investments that create a unique shopping experience
- Quality: guarantees of high-end cosmetic products
Why we support selective distribution
Cosmetics Europe supports efficient distribution networks, and we represent both mass-market companies as well as companies that distribute their products through selective distribution.
Without the capacity to protect the brand image and the quality associated with European cosmetic and personal care products, the market in the EU could reduce from the current wide choice of products available in high to low price points to one where all products are aimed at mass market and budget ranges. To avoid this, companies need to be able to differentiate those products with unique characteristics that are valued by customers. Without this, incentives to innovate and to invest in high-end quality products will decrease, damaging the industry as well as reducing consumer choice.
Achieving excellence in the distribution and the sales environments of cosmetic products, including the selective distribution model, allows companies to showcase innovation and introduce new products as an investment in the marketplace. This sort of investment invariably filters across to mass market brands creating a healthy and competitive market, which ultimately provides a wider array of products for consumers to choose from according to their personal preference and budget.
Selective distribution is also recognised by European competition authorities and jurisdictions as a legitimate and necessary distribution scheme, especially for the distribution of high quality products like cosmetics.