Douglas has the competition breathing down his neck

A few days before the opening of a new luxury branch last Tuesday, Tina Müller was at the Düsseldorf "Kö" to get an idea of ​​the latest work. "What's completely new here is the scope and variety of beauty treatments," says the head of Douglas, Germany's largest perfumery chain. "We don't offer this cabin concept in any other store."

According to Müller, there are already luxurious shops in Berlin, Hamburg and Frankfurt, and the chain also has an exclusive shop on Sylt. But now it's Düsseldorf's turn with a very special shop. Douglas has also had its headquarters in the state capital for six years, with currently around 900 employees.

Almost five years ago, Tina Müller, previously a board member at Opel, was appointed to the helm of Douglas. With that, the manager returned to the world of beauty and personal care products she was familiar with. Because before her interlude in the automotive industry, she worked for corporations such as L'Oréal, Wella and Henkel. For the Douglas owners, the financial investor CVC with 85 percent of the shares and the entrepreneurial family Kreke (15 percent), she should dust off the traditional brand, push digitization and probably make the company fit for an IPO. The name of the perfumery chain “still has great potential, especially among younger generations,” it was said at the time from Hagen, where Douglas had been based for a long time.

Like many retailers, Douglas has been hit hard by the corona pandemic and the associated business closures. "We digitized our business model very early on, which got us through the Corona period to some extent," says Müller. Since the beginning of the pandemic, online sales have increased from 17 to 33 percent. The number of visitors in the shops is still lower than in the past, but this is more than compensated for by the strong online trade.

Since the end of the restrictions in Germany, however, many customers have been drawn back to the branches, says Müller, who opened his new Düsseldorf shop this weekend with a “Beauty

"Our customers can be pampered and beautified here from head to toe," says the marketing specialist. Among other things, by plastic surgeons who offer wrinkle injections with hyaluronic acid, but there should not be any real operations on Königsallee. Müller wants to use such beauty and luxury temples to strengthen the brand experience and keep customers loyal.

Because especially in the online sector, your competitors like the mail order company Flaconi from Berlin are breathing down your neck. In turn, the French cosmetics chain Sephora has been active in brick-and-mortar retail for a number of years; The subsidiary of the luxury group Moët Hennessy-Louis Vuitton (LVMH) has its own shops in the department stores of Galeria Karstadt Kaufhof, among others, also on Düsseldorf's Königsallee. Sephora has also been selling its cosmetics online via the retail giant Zalando for a year now.

But what none of the competitors have so far is their own online pharmacy. In February, Douglas bought the online pharmacy Disapo, which is based in the Netherlands and has around 200 employees. Müller reports that 11,000 of the approximately 300,000 products in Europe from the pharmacy range are now available on the Douglas website. For example, high-quality sun protection products that are not available in normal drugstores and perfumeries. In addition, there would be over-the-counter products such as painkillers or dietary supplements.

"When the e-prescription arrives, our customers will also receive their prescription medication online from us," says the company boss. Until now, e-prescriptions could only be submitted to online pharmacies by post or fax. Pharmacies have actually had to accept electronic prescriptions since September, but there is still a transitional period for doctors to issue e-prescriptions until January 2023. A pilot project has been running in Westphalia-Lippe since September 1, and around 250 practices are already involved. "The markets for beauty and health are increasingly converging, and we can clearly see this in the wishes of our customers," says Müller. With the introduction of the e-prescription, enormous growth in the online pharmacy business can be expected, and Douglas will take advantage of this growth opportunity.

Younger customers, who may not be able to afford expensive treatments in the Kö-Store, are addressed by Douglas via "Live Shopping", a type of teleshopping that can be consumed via the company's own app. "It's basically like the previous retail television, only for a younger, digital target group," says Müller.

In the meantime, Douglas is also increasingly focusing on its own brands, with which one earns much better than with those of established companies. The share of these own brands in group sales is still less than ten percent, emphasizes Douglas. Of course, you don't want to alienate customers like L'Oréal and Estée Lauder.

At Douglas, for example, there is a so-called “doctor brand” that Tina Müller developed with a doctor friend of hers. The doctor, who says she would like to live to be 120 years old, explains in Müller's podcast "Beauty

"We now also have a small boom in the beauty industry," says Müller. People wanted to meet again, show "and make it beautiful". Since the medical masks fell, the demand for certain products has also increased extremely. "There's no point in lipstick if you have to wear a mask all the time."

This is consistent with the fact that Douglas sales in the third quarter increased by 28.8 percent year-on-year to 830 million euros, the operating result (EBITDA) rose by 44.5 percent to 279 in the first nine months of the 2021/22 financial year, 6 million euros. "Overall, we have grown faster than before the pandemic," says Müller.

Müller refers to the “lipstick index” on the poor prospects for consumer climate due to the Ukraine war and the energy crisis. The term was coined in 2001 as a kind of economic indicator by Leonard Lauder, then head of the US cosmetics company Estée Lauder. "The thesis behind this is that people tend to treat themselves to a little luxury in troubled times," says Tina Müller. The Douglas boss hopes that this could also be the case in the coming months. "But that's just a cautious outlook, because the gas bills are yet to come."