As I See It
Beauty 2010: Rebuild, Reinvent, Revitalize
Vice President and Global Beauty Industry Analyst The NPD Group
How can you regain momentum in 2010? It starts with understanding your beauty consumer—how they are changing their shopping habits, where they are shopping and why. This new economy brings with it many questions and challenges. To help understand how consumers are buying in beauty, we need to look at what happened in 2009. Then we can begin to rebuild, reinvent and revitalize beauty offerings and sales efforts in the industry for this year and beyond.
As we entered 2009, we knew it would be a challenging one. Little did we know just how difficult it would be. Every major economic indicator sputtered, and prestige beauty was not immune. Heading into the holiday period, all prestige categories were posting declines at record levels. Consumers were shopping less—less frequently and for less product. That was and is the reality of our time. Yet while this reality is sobering, it is in no way a time for despair or to pause. In the 2009 results and manifestations of consumer choice, there is a clear, loud and unmistakable direction to help us understand what we must learn and what is our call to action.
Beyond the economy, prestige beauty—and, in fact, the entire beauty industry across channels—is at a moment in time when consumers are re-evaluating the relevance and purpose of beauty in their lives. Before the economic downturn, NPD began to report a trend of fewer women using beauty products. That trend has continued, and in just the past year, an additional estimated 2.3 million women, ages 18-64 did not use beauty products. For years, the focus of this trend has been on the fragrance category. Now, this trend is in evidence across all three major categories: fragrance, makeup and skincare. This shift away from beauty is absolutely the most important factor that the beauty industry must address.
Where do we begin? As we “seek first to understand,” we see that consumers are telling us the role of beauty must be more than something to attract a mate, play dress-up, or fix a problem. Beauty is most relevant to our consumers when it makes them feel better about themselves, more confident in their lives, more attractive and positive. The products we offer are merely the vehicles to get them to that destination. The innovation we offer is our opportunity to demonstrate to them our point of difference. The service we offer is the bridge that builds their trust and relationship with us. The value we represent, and can thereby ask them to spend with us, is fundamentally based on the meaning we contribute to their lives. Today, it is vital that we distinguish ourselves on these fronts, or we give consumers the incentive to choose value based primarily on savings and price.
How do we begin? Look at what is working. Then, instead of copying, adapt and translate those insights into our individual brands, categories and retail environments.
In fragrance during the course of the year, growth was at both ends of the price spectrum. At either end, the points of difference were the appeals of novelty, functionality, specialty and aspiration. Sales of premium priced fragrances above $100.00 were positive going into the holiday period, while the overall category posted double-digit declines. At the other end of the price spectrum, smaller size women’s fragrances, one ounce and under, grew both in share of market and sales volume.
In makeup, capitalizing on the increased consumer interest in having a more natural look, new products that complemented this trend experienced outstanding success. While the makeup category entered the holiday period in decline, new foundation and concealer products’ sales rose more than 30%, and new eyeliner and multipurpose eye products sales more than tripled. In color, where brands supported these categories with new novelty items, captivating packaging and/or limited editions, some top brands doubled new product sales in even the challenging lip category.
In skincare, going where the consumer needs are, was a successful tactic, even while the overall category struggled. A focus on the key skin concern of aging, as well as more specialized issues such as acne and redness, helped set gains in both dollar and unit sales. As fewer consumers say they are shopping for beauty items in salons and spas, a focus on hair care—protection and treatment products—helped prestige hair sales rise. And among new products offered by top brands, there were leaders who posted gains in excess of 30-50%.
Now in 2010, the reality is that business will still be challenging. The other absolute reality is that we know consumers do still love beauty. Like any great love affair, if we want them to fall in love and stay in love with us, we will have to continue to “bring our best game.” In addition to a focus on product, we have to look at every way we can be in our consumers’ consideration set and be at the top of their minds. We have to be where they are spending their time. We have to talk to them where they will listen. Our consumers will try, they will stay, they will buy—where they see the value. It is our call to action to bring them our very best. 2010 is our year to renew, rethink and revitalize.
About The NPD Group, Inc.
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