Since 1996, the prestige beauty industry has relied on NPD’s comprehensive beauty market research and business solutions to deliver insights into what is selling, where, why, and at what price. Our research includes information for the U.S., Canada, France, Italy, Mexico, Spain, and U.K. beauty markets. It helps companies address the emerging trends, needs, and behaviors of the next generation of beauty consumers.
We monitor global beauty industry trends – from the “big picture” down to the category, geographic region, and store levels. We can even help you look for opportunities or evaluate pricing strategies.
How do we do it? We bring our robust data assets, along with our industry expertise, and combine them with your data or third-party data to find solutions to your business issues.
Scentiments is a new suite of consumer insights on fragrances and scented products that delivers a robust view of consumers, their attitudes and lifestyles, and shopping and usage behaviors. Brands and retailers use this information to guide product, point-of-sale, and marketing strategies that resonate with consumers and drive growth. Enhanced by our fragrance experts’ industry knowledge and keen insights, Scentiments offers the industry the most comprehensive understanding of the U.S. fragrance consumer.
Learn More About Scentiments
Store-Level Enabled Retail Tracking
Store-Level Enabled Retail Tracking complements BeautyTrends®. It can help you determine whether sales are distribution-driven or whether certain parts of the country are contributing more to national share or driving growth. The velocity measure set that is part of Store-Level Enabled Retail Tracking takes into consideration sales volume (Annualized Industry Volume or AIV) rather than considering store count alone, for a more meaningful read on where products are selling and how they are performing.
BeautyTrends® is the point-of-sale (POS) tracking service measuring the performance of fragrances, makeup, and skincare products. SKU-level detail is captured monthly for more than 75 product categories. Channels reported on include prestige department stores, mid-tier national chain, fine department stores, TV/shopping, and dot-com/Internet pureplay retailers. Evaluate purchasing trends so you can make better business decisions and take full advantage of emerging opportunities across these key channels.
Fragrance data is also available on a weekly basis. Having a faster read on what’s happening in the marketplace is essential for tracking new launches – during the holiday season and all year round.
Beauty Cross Channel Monitor
NPD and Nielsen have partnered to produce the Beauty Cross Channel Monitor. This comprehensive report on the beauty market provides the only total market view spanning both the prestige and mass channels. The Beauty Cross Channel Monitor combines Nielsen and NPD point-of-sale data across a range of retail channels, providing a precise read on sales and performance for all beauty categories including dollar sales, unit sales, and average retail price, in addition to a ranking of the top 75-100 brands. Brand marketers can evaluate the performance of categories, segments, and brands across major beauty distribution channels to better understand and respond to new U.S. beauty market opportunities.
Beauty Multi-Country Topline Report
This report provides consistent, comparative, cross-country views of prestige makeup, fragrance, and skincare sales in the U.S., France, Italy, Spain, and the U.K., from a single source. It looks at the performance of top corporations, divisions, brands, categories, and segments in these key global markets. Use this report to evaluate brand performance across countries to guide marketing and product strategies, understand how product mix differs by country, and guide assortment and distribution plans.
Shopping Activity Services
Get access to insights on shopping, browsing, and buying visits across all channels, retailers, categories, and demographics. View conversion rate and average spend measures and see how they vary by retailer, season, and demographic. Gain an understanding of where else your customer is shopping and buying.
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
- What consumer segments should we target and why? How do we know if we’re successful over time?
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- Will my product category grow or decline? Why? What does this mean for my market share?
- What’s the competitive landscape and where are my best opportunities (Food)?
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See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
This quarterly report was created by a team of NPD analysts known for their experience, knowledge, and passion for the beauty industry. It puts data into context, giving you the story behind the data with detail on category drivers and industry insights across makeup, skincare, and fragrance. Use it to uncover opportunities and refine your strategies.
Polish up your nail care consumer knowledge. This report's information and analysis will help to ensure your marketing tactics are aligned with consumers' needs. Use it to understand the roles color and brand play in at-home nail polish purchase decisions, and see what sets at-home nail care consumers apart from their salon-oriented counterparts.
Spending expectations. Attitudes toward spending on beauty. Shopping dynamics. Emotional motivators. And more. Now you can explore the consumer mindset related to beauty and today’s economic reality in the 2015 edition of the Annual Beauty Consumer Economic Indicator Report. The report covers the impact of today’s economy on beauty spending, featuring select data originally presented at our February 2015 Hot Off the Press event. Produced since 2008, the report includes comparisons between our latest insights and previous years’ findings.
Avoid relationship trouble. See inside the relationship between women and their makeup — discover what consumers want, why they buy, how they use your products, and more.
It’s Beginning to Smell a lot like Christmas: Home Fragrance Most Important When Company is Expected, NPD FindsIn preparing their homes and minds for the holidays, and the festive family gatherings they bring, consumers turn to scent and décor to get into the holiday spirit. Home fragrance is most important to consumers when company is expected, as scents are a way of honoring their guests and ensuring they have a pleasant visit, according to Scentiments, a new suite of consumer insights and tools on the fragrance industry from global information company The NPD Group.
The Internet Surpasses Print and Broadcast Advertising as Preferred Source of Makeup Product Information, According to NPDDefining many of the most popular, growth-driving trends in makeup today from contouring to draping, the internet went from the least-frequented source of product information four years ago, to the fastest-growing in 2016, swaying both styles and sales, according to global information company The NPD Group’s Makeup In-Depth Consumer Report 2016. More women today are looking to the internet for information on makeup products and brands, up 11 percentage points versus 2014, or more than any other information source.
Craving pizza? Just Tweet a pizza emoji. Want that area rug? Just click the Buyable Pin for it to adorn your own home. Wish the watch in your Instagram feed were on your wrist? Just click on the brand’s profile link to buy it.
Since 2012, social media platforms have integrated click-to-buy features that allow retailers and manufacturers to sell directly to consumers within social platforms. Twitter, Facebook, Instagram, Pinterest, Tumblr, and Snapchat have all gotten in on the trend.
But even though online sales are growing and consumers are spending more time on social media, the jury’s still out: do these social buy buttons actually encourage people to buy, or have we seen the last of them?
Get our latest Insights – The Future of Social Commerce: How “Buy Buttons” Are Disrupting the Retail World
See how using Account Level Reports delivers critical insight into a brand’s performance compared to its competitors at a given retailer and compared to the rest of the market.
A couple of well-established brands improved their competitive position using retailer-specific insights. Understand how they did it.
10 Ways Younger and Older Millennials Shop Differently
The retail world is obsessed with Millennials.
It wouldn’t be a normal day if newsletters, tweets, and the media didn’t overflow with headlines on the latest Millennial trend, how to “harness” their alleged power, or how to reach this malleable and unpredictable segment.
Who are these Millennials? Do a quick Google search, and you’ll learn they’re foodies. Social media savants. Selfie experts. Experience seekers. Value hunters. Convenience junkies. Savvy shoppers. They’re “authentic.”
In demographic terms, they’re people between the ages of 18 and 34 who reached young adulthood around the year 2000.
But Millennials don’t like to be stereotyped as Millennials. We get it, Ryan Seacrest—they’re tired of being generalized into a broad demographic box and find the label patronizing. They just want to be treated as unique individuals.
When it comes to the wide-spanning age bracket, they do have a point—the difference between life in your late teens and life in your early 30s is pretty substantial. Do 18-year-old you and 34-year-old you want the same things, behave in the same way, or buy the same stuff?
With this in mind, we decided to divide the group into two smaller segments for study: younger and older Millennials. We set out to learn how these groups differ, both attitudinally and behaviorally, in their retail choices. We learned a lot, like the fact that older Millennials over-index in loyalty apps. And younger Millennials shop more at department stores.
If you’re a retailer or manufacturer looking to better understand the complexities of these highly-coveted sub-segments across the retail and foodservice spaces,
The Gen Y Gold Rush
Before we dive into retail specifics, let’s review an economic reality to set the context: U.S. Millennials haven’t had it so easy. Coming of age during the Great Recession, 13.8 percent of those 18-29 are unemployed or out of the workforce, far above the national jobless rate of 5.1 percent. And they’re a “boomerang” generation—33 percent stay at home with their families and fewer live independently. (Who can blame them? Seven out of 10 college grads from 2014 have a student loan, owing an average of $28,950 per borrower.)
But debt and other deterrents haven’t kept Millennials from buying things.
Any obsession with the Millennial demographic—also known as Gen Y—is with good reason. U.S. Millennials outnumber Baby Boomers by nearly 10 percent, surpassing them as the nation’s largest living generation in 2015, according to the U.S. Census Bureau. They’re estimated to reach $1.4 trillion in annual spending by 2020—roughly one-third of all retail spending. So retailers and manufacturers need Gen Y’s share of wallet to increase their market share. And this dependence will only intensify as Boomers continue to age and the Millennial segment gains purchasing power. Frankly, if you’re a retailer who’s not focused on this budding segment, we’re seriously concerned. (Please call us immediately and we’ll help.)
Given that Millennials are such an expansive, diverse group, our Chief Industry Analyst Marshal Cohen reminds us that there are many ways to divide up this set for study; segmentation by age is just one way to showcase their differentiated spending. But make no mistake about it: age really does matter. As consumers navigate through shifts in life stage, it reflects back in their purchasing behavior.
When we divide the group into two segments (ages 18-24 and 25-34), there are already some major demographic differences to note. For one, older Millennials are more educated and have a higher income, shown by data collected by our partner, CivicScience. But with more than one-third of 18- to 24-year-olds still in college, they can’t be expected to have the same level of education or earning power. Older Millennials are less racially diverse and are primarily white (74 percent compared to 68 percent of young Millennials). A greater percentage of young Gen Yers are single/never married (80 percent compared to 44 percent of older Millennials), fewer are married (only 10 percent compared to 40 percent of older Millennials), and fewer parent a child (10 percent compared to 40 percent of the old Gen Y segment).
The two groups think and behave differently, too. Younger Millennials are more optimistic about the state of our economy. They’re less likely than their older counterparts to think Donald Trump would make a good president, and more likely to see the new “Star Wars” movie. Younger Millennials are more likely to applaud Bernie Sanders’ performance in the first Democratic debate. And they eat granola with a higher frequency than their elder Millennial brethren.
So how do these differences play out on the retail floor? Here are 10 ways the groups differ in their shopping behavior:
1. Young Gen Y Specialize in Beauty
We studied the receipts of 8,766 Millennials through our Checkout TrackingSM service, following the purchases they made during the first half of 2015, both online and offline. This revealed younger Millennials devoted a greater share of spend to specialty beauty retailers compared to the total Gen Y population. The younger set significantly over-indexed at retailers like Lush, meaning they are more likely than the senior Gen Y group to visit a specialty beauty retailer when they need new concealer or mascara.
But there were also some “neutral” beauty brands that earned consistent share of wallet across the Millennial age bracket. Both Gen Y groups devoted about 20 percent share of beauty spend to Bath & Body Works and 22 percent share to Sephora. The only specialty beauty retailers where older Millennials significantly over-indexed compared to their younger comrades were The Body Shop and bareMinerals.
But it’s not all about specialty shops when it comes to cosmetics. In an online poll of 15,031 U.S. adults conducted from January 2014 through January 2015 through our partner CivicScience, we asked respondents where they buy most of their makeup and cosmetics. The result? Millennials do the majority of this shopping (49 percent) at superstores like Walmart, Target, and Costco—a greater share compared to that of the total U.S. adult population (45 percent). And younger Millennials demonstrate a slightly greater affinity for superstore makeup than older Millennials.
When it comes to how Millennials shop for beauty products, their purchasing behavior is pretty consistent throughout the segment, but there are also some differences. Our Shopper Engagement survey fielded in August 2015 showed Millennials old and young are equally likely to browse in store and buy in store (58 percent). Younger Millennials are more likely than older Millennials to browse and buy online (20 percent vs. 17 percent), less likely to browse online and buy in store (14 percent vs. 15 percent), and less likely to browse in store and buy online (8 percent vs. 10 percent).
"With so many retailers and brands trying to court this segment, it becomes very competitive and challenging to win share of younger Millennials’ discretionary, hard-to-come-by spending"
2. Young Millennials Shop More Specialty Apparel
The Millennial segments demonstrated the biggest discrepancy when we looked at share of wallet devoted to specialty apparel stores. Young Gen Yers like shopping in specialty stores for specific items, devoting 3.2 percent share of wallet to this retail channel, compared to older Millennials’ 2.1 percent share and the total adult population’s 1.9 percent share, shown by Checkout Tracking receipt data.
Marshal Cohen thinks reaching younger Millennials requires laser-like focus. “With so many retailers and brands trying to court this segment, it becomes very competitive and challenging to win share of younger Millennials’ discretionary, hard-to-come-by spending”, he explains. Millennials want to shop and play at places that market their products directly to them. If they feel you’re “for real,” or in other words, not only including them, but genuinely speaking directly to them—they will be more inclined to shop with you.
Specialty fashion retailers are the perfect example. We took a deep dive into data on some of these top retailers to see at which specific retailers younger Millennials over-indexed compared to more senior Millennials over a 12-month period. One look at the over-indexing stores on this list, and you’ll see just how these specialty stores fared with the younger Millennial.
Here we see very clearly how young Gen Yers spend a significantly lower share of their apparel spend at children’s retailers (Carter’s and The Children’s Place) compared to the older Millennial segment. The data reflects young Gen Yers’ preference for stores like Hollister and American Eagle over places like Ann Taylor and Banana Republic.
What we found particularly significant was the fact that two of the most neutral apparel retailers—Lululemon and The North Face—earned similar wallet share among Millennials of all ages, demonstrating activewear’s ability to transcend ages 18 to 34.
But Department Stores Aren’t Dead
Given younger Millennials’ affinity for specialty apparel retailers, perhaps we can understand Macy’s decision to mimic this specialty/boutique feel by opening a basement floor dedicated entirely to the younger consumer (Gen Z and young Millennials), only showcasing the brands most relevant to this age group.
But it is important to note that across the entire channel, Millennials of all ages devote a greater share of wallet to department store spend than the rest of the U.S. adult population. And younger Millennials are also more likely than older Millennials to have shopped at department stores. While the younger group is more likely to have shopped at Nordstrom, the older group is more likely to have shopped at Sears.
Interestingly, while younger and older Millennials differ in their likelihood to have shopped at Nordstrom (26 percent vs. 15 percent), the likelihood of the groups to have shopped at Nordstrom Rack, the fashion retailer’s off-price subsidiary, is not as polarizing (25 percent versus 22 percent respectively). Though less significant, younger Millennials are slightly more likely to have shopped at Marshall’s, while both age groups are equally likely to have shopped at TJMaxx.
3. Younger Millennials Are Sportier
Though activewear share of spend is consistent across the Millennial spectrum, budding Millennials are more likely than older ones to have shopped at sporting goods stores (29 percent vs. 20 percent reported to have shopped at one in the past year). The differences were significantly pronounced at REI (49 vs. 16 percent). There were also marked differences at footwear retailers Nike (40 vs. 19 percent) and Finish Line (32 vs. 19 percent).
So does this mean younger Millennials are more active than their older counterparts? Our Sports Industry Analyst Matt Powell shed light on this question. “I’ve been talking a lot about viewing the generational changes on a spectrum (from the oldest Boomer to the youngest Gen Zer), rather than as distinct and dramatic changes,” he explained. For example, Boomers are mostly white, conservative, less technically inclined, lavish, and not particularly focused on health or fitness. In contrast, Gen Z is less white, liberal, tech-reliant, frugal, and very health/fitness focused. And Millennials fit somewhere in between on this spectrum.
“So when we think of changes moving along a spectrum over time, it is logical that younger Millennials behave somewhat differently than older ones, and in this case—have a greater focus on fitness and health,” Matt explains.
That’s not to mention that as older Millennials buy homes and start families, they spend less money on themselves (and less on things like sports equipment), while the younger Gen Yers do not yet have those financial obligations.
4. Younger Millennials Eat Healthier, Cook Less, and Shop Wholesale
When it comes to the food and beverages they order, younger Millennials are more likely than older Millennials to look for benefits they can obtain by eating healthier, seeking items that provide energy, are filling, reduce stress, and build muscle. These are messaging opportunities for building a younger Millennial customer base.
In addition, young Gen Yers are more adventurous than older generations in their food choices, with 47 percent of younger versus 40 percent of older Millennials claiming to choose something new (compared to only 34 percent or less for older generations). And younger Millennials have other considerations when trying something new. For example, convenience is at the top of the list. Items that are quick to order, prepare, and consume with easy portability and little mess satisfy this need.
An analysis of data from CREST®, our flagship restaurant and foodservice information service, found the Millennial segment experienced the greatest decline in restaurant visits of any generation from 2007 to 2014. This decline was greatest among the older Millennial segment (the group more likely to have kids under age 13 in the household). And if you’ve ever been responsible for a child at a restaurant who is having a meltdown or making a concoction out the table condiments, you get it. Not to mention the impact of having more mouths to feed; the relatively cheaper expense of eating at home was the primary reason for the decline in visits among older Millennials. Healthy eating concerns also played an integral role in the decision to eat at home.
Older Millennials are also more into cooking than are younger Millennials, with just over half of the older segment saying they love or like to cook. It may be easier to attract younger Millennials back to restaurants because they are not as tied to cooking at home.
Last month Whole Foods revealed it will open a line of grocery stores specifically targeting the Millennial shopper. These smaller stores will offer curated, limited selections of products at value prices. While research indicates Millennials do like to specialize, our Checkout Tracking receipt data indicates an affinity for wholesale clubs across this segment. When it comes to at-home food purchasing, younger and older Millennials devoted the greatest share of wallet to wholesale clubs Costco and Sam’s Club, and were similarly likely to have shopped at each grocer. Younger Millennials over-indexed at BJ’s and Publix, but under-indexed at Safeway.
"When it comes to accessories, younger Millennials are not the robust market one would think they are..."
5. Young Gen Yers Devote Less Spend to Accessories
Accessories are growing fastest among the Millennial segment. These consumers are responsible for the greatest share of the category’s purchases, with spending up 15 percent from one year ago. Younger Millennials, however, under-index (compared to total Millennials) in the share of wallet they devote to this category. We found this stat surprising, so we asked our Chief Industry Analyst, Marshal Cohen for his thoughts on the trend.
“When it comes to accessories, younger Millennials are not the robust market one would think they are,” Marshal explains. “Traditional thinking has younger Millennials spending more on accessories, as they tend to be more affordably priced than apparel items. But with less discretionary funds, young Millennials need to be very picky about what and when they buy. Spending across a wider scope of ‘necessities’ like phones, data plans, and even food competes for young Millennial spending on experiences—and that means things like accessories will fall short on the priority list for spending.”
6. Older Millennials Use More Loyalty Apps
Older Millennials are more likely than younger Millennials to be a member of a retailer’s loyalty program. But one surprising trend is that older Millennials are more likely than tech-reliant younger Millennials to have at least one retailer’s app downloaded on their mobile device (48 percent vs. 33 percent). The older group is also more likely to frequently use the downloaded app (46 percent often use their app to browse, look for product information, or shop compared to 38 percent of young Millennials). Older Gen Yers substantially over-indexed for use of mobile apps from Target, Walmart, CVS, Dollar General, eBay, Rite-Aid, Best Buy, Gamestop, and Costco.
7. Millennial Youth Need Less Stuff and Shop Less in Store
Younger Millennials are more likely than older Millennials (28 percent vs. 23 percent) to say they have shopped at brick-and-mortar stores less often than last year, primarily because they don’t need to buy as much as they used to (41 percent). This is also a factor of Millennials’ attraction to experiences, and their desire to do more and buy less.
Older Millennials are more likely than younger Millennials to shop less at brick-and-mortars because they cannot afford to shop as much as they used to (32 percent vs. 25 percent)—perhaps a reflection of the financial demands of parenting.
Both groups are similarly likely to have shopped at Amazon and to be members of their loyalty program, though younger Millennials are more likely to be familiar with Amazon as a place to buy consumer electronics. Older Millennials are more likely to have shopped at direct mail/e-commerce sites like eBay.
When it comes to shopping for apparel, younger Millennials are more likely than older Millennials to browse in store and buy in store (62 percent vs. 51 percent), but less likely to browse online and then buy in store (10 percent vs. 16 percent). Younger Millennials are also less likely than older ones to browse in store and buy online (8 percent vs. 14 percent).
8. Younger Gen Yers Are More Adam Levine, Older Are More Metallica
Our BrandLink® solution reports that if you’re looking for a celebrity endorsement that would appeal to Millennials of all ages, B.o.B. and JT are your guys (that’s Bobby Ray Simmons, Jr. and Justin Timberlake to all you non-Millennials). Both would be good fits to target younger Millennials (index 225 and 132 respectively) and older Millennials (index 167 and 137 respectively).
If you want to home in on younger Millennials, Adam Levine and Daniel Radcliffe are good choices (index 138 and 134 respectively), but they could miss the mark for older Millennials.
Only trying to target older Gen Y consumers? Metallica and Guns N’ Roses would fit the bill (index 130 and 121 respectively), but might not have the same recognition, let alone impact, with young Gen Yers.
9. Older Millennials Buy More Kids’ Stuff
Younger Millennials under-indexed compared to the total Millennial segment in child-related categories: baby products and toys. Specifically, older Millennials are more likely to have shopped at Babies R Us, The Children’s Place, Toys R Us, and Party City. This isn’t surprising, since the 18-24 segment is less likely than the 25-34 segment to parent a child. And in today’s day and age, baby photos don’t really start to take over your Facebook or Instagram feeds until you hit your mid-to-late-20s.
The same trend applies to pet products: older gen Yers are more likely than Millennial youngsters to have shopped at pet stores like PetSmart and Petco.
10. Older Millennials Have More Home-Related Expenses
We know it might sound shocking, but younger Millennials also under-indexed in home improvement, appliances, tools, and home textile purchases. Older Millennials are more likely to have shopped at home hardware stores like Home Depot and Lowe’s in addition to home specialty stores like Bed Bath and Beyond, Crate and Barrel, West Elm, and Pottery Barn. But, really—no surprises here. What 20-year-old do you know who is remodeling her new home, buying a fancy KitchenAid, investing in a state-of-the-art power saw, or ordering a new line of linens? Let’s face it, whether you’re in school or starting your first job, it’s all about scrounging up repurposed furniture from older family and friends or simply sticking with mom and dad for a few more years until you get your feet on the ground. And when young Millennials finally do uproot themselves, typically this means moving to an urban environment where there are more jobs and inhabiting smaller, rented, and/or shared homes that require fewer furniture expenses.
Older and Younger Millennials: Two Distinct Segments
In the world of market research, people aged 18-34 are typically grouped into one giant segment for study. But they do not share the same experiences, think, or act the same. Half the group grew up on Britney Spears, the other on Justin Bieber. Some grew up with Facebook in middle school, while the rest didn’t create an account until after having their first child. Moreover, this 16-year span represents a pivotal coming-of-age period, and the differences between the oldest and youngest Millennial can be great, as evidenced by our top 10 list. It’s time to start treating these segments as two distinct groups, to better get to know them and to speak to them directly if we want to earn their precious spending power.
Insights and Opinions from our Analysts and Experts
Despite my countless attempts to master its technique, contouring and I did not become friends. Desperation, however, was soon relieved by a new trend. Draping, or creating proportion and natural dimension by using deeper and lighter shades of blush, would be the answer to my prayers.
Draping is gaining in popularity, as Google Trends’ data indicates that search volume for “makeup draping” has skyrocketed 809 percent since May 2016. As of last week, over 200 YouTube tutorials on the technique have been uploaded. Makeup draping is mentioned, on average, every minute online. Products embracing the trend are steadily becoming available as brands launch compacts with drapable blush colors included.
Draping could have an interesting impact on blush sales. In terms of makeup products most widely used by consumers, blush does not make the top five (a list dominated by products like mascara, foundation, and eye shadow) as the percentage of consumers using it has remained steady*. Time will tell if the popularity of the draping trend will spill over into significant sales for blush, but recent data appears to be favorable as blush sales in the prestige channel increased 4 percent in June 2016**.
Draping allows me to create the dimension I have long desired, and provides my face with a natural look that I love. Rather than strive for the complicated and overdone, I am content adding draping to my short, yet essential list of makeup tricks. Kim Kardashian, contour queen: Eat your heart out.
*The NPD Group, Inc. / 2016 Makeup In-Depth Consumer Report
**The NPD Group, Inc. / U.S. Prestige Beauty Total Measured Market, January-June 2016
Social media has changed not only how we live, but how we shop. It’s difficult to find anyone who doesn’t have an Instagram account. This photo sharing social network has taken the world by storm, allowing users to capture moments and share them either privately or openly. Like most of those I know with accounts, once I snap a picture, it’s there for posterity in my feed. But apparently, the younger generation does things a bit differently.
In speaking with my younger and much hipper 17-year old cousin, she questioned why I would leave so many photos on my feed. She explained that most of her friends edit their photos on a consistent basis, taking photos down when they no longer feel these photos define them or if they don’t receive many “likes.” She keeps around 20-25 pictures on her Instagram so it represents the “best” of her life; a glossy representation at best.
Like kids with their Instagrams, beauty retailers have begun to edit their brands and products. Ten or fifteen years ago, when a brand was introduced into a store, the entire collection was displayed. But specialty stores like Sephora and Ulta have changed that, and vertical apparel retailers like Urban Outfitters and Anthropolgie have taken the concept even further. Both retailers often bring in small, niche brands with limited-to-no distribution and take only the star items of the lineup.
This sort of cherry picking makes sense in today’s retail climate. About three-quarters of any major sub-segment within skincare are planned purchases, which indicates that by the time consumers are at the purchase stage either in-store or online, they have completed research through family, friends, or other sources*. As a matter of fact, social media and blogs are among the only sources of information to increase with consumers*.
Skincare is certainly the most affected category within beauty since it is usually a purchase that requires some research and thought. Many of the brands that are thriving through social media are focusing on hero items, while introducing new products that consumers have expressed interest in through social feeds. This is a trend that will not go away anytime soon, so it remains to be seen how some of the more mainstream brands, with a larger product portfolio, adapt to this increasingly edited environment.*Source: The NPD Group, Inc. / Women’s Facial Skincare Consumer Report 2015
A friend’s daughter has made herself some nice pocket cash with a small and lucrative business creating and selling all-natural, homemade sugar lip scrubs. Did I mention her daughter is 11-years old? What is even more amazing is that she is not alone. From what I hear, the lemonade stand is taking a hit as many young girls shift their entrepreneurial spirit to the more profitable, and admittedly more fun, world of beauty.
Beyond the pre-teen entrepreneur, there are multitudes of legitimate and watch-worthy kitchen chemists entering the beauty manufacturing space and creating major waves. Many of these home-grown brands began by selling their wares on websites like Etsy. A growing number of them are being picked up by major players in the beauty retail space, including a few up-and-comers like Urban Outfitters and Anthropologie, as well as the more established Sephora and upscale Barney’s New York.
Small batch beauty brands often focus on being some combination of cruelty-free, eco-friendly or non-toxic, with sustainable and certified organic ingredients, or natural ingredients with nutritional benefits. This philosophy feeds well into the ideologies of boutique specialty beauty shops such as Credo, Cap Beauty, and The Organic Pharmacy, where brands like these have a significant foothold.
Given the focus on wellness and health in consumers’ everyday lives, these brands represent a trend that will likely get bigger as time goes on. In the prestige beauty space, brands with a natural focus have long outpaced other brand types in department stores, growing at five times the rate of total skincare in 2015. Eyeing the success of natural and small batch brands, some more established beauty players have followed suit by shifting their marketing speak to be more about the beneficial ingredients in their products, and promoting themselves as free of “the bad stuff” like parabens, sulphates, phthalates, petrolatum, and silicones.
As the wellness-focused consumer grows in size and becomes more educated and aware, she will demand more from her products. The onus will be on beauty brands to earn her dollars spent across all beauty categories. While this trend dominates among skincare products right now, makeup and fragrance are out there and not far behind. Staying ahead of this consumer need will prove a winning strategy for any brand, as beauty heads into the brave new, and more holistically health conscious, world.
I have recently developed a new love. I have fallen in love with candles and reed diffusers. I used to have this irrational fear of candles being dangerous and thought that reed diffusers were too fussy, though they are a great alternative to candles. Now I cannot see, or smell, my home without either.
These kinds of home scents have been growing exponentially in prestige despite their price tags. Consumers have been buying fragranced home-scented items in the prestige market. Though a small fraction of the market, dollar and unit sales of home scents have grown by double-digits for the last three years, with candles and reed diffusers driving the growth*. This sales increase speaks to consumers’ wanting to have signature fragrances for their homes.
My love affair began last year, during a trip to a high-end department store. Passing by an aisle display of candles, I was stopped in my tracks by an arresting aroma. I had to have the candle that wafted such a delicious scent. The ambrosial odor was exactly what I thought my new home should smell like. I balked at the price. They wanted how much for a candle? Disappointed, I walked away from that beautifully scented dream, but after that experience I just couldn’t get it out of my mind. A few weeks later I was in another high-end department store in NYC and was confronted by that same, wonderfully redolent scent. I broke down and bought not only the candle, but the reed diffuser as well.
It’s the artisanal brands that are really driving the growth of home scents. Their growth rate as a whole was 27 percentage points faster than that of the rest of the brand types in the home scent segment*. These brands are helping consumers to be more holistic in their approach to scent. They are not limiting scent just to the body, but are showing the other applications of scent in consumers’ lives. This is a strategy that has been helping them to win as artisanal brands in overall fragrance sales; they have been the only brand type to see double-digit growth for the last three years. The rest of the industry would do well to realize that fragrance as a category has various options and many, sweet-smelling applications.
*Source: The NPD Group, Inc. / U.S. Prestige Beauty Total Measured Market, Annual 2015
When I was a little girl, I remember watching my mother’s cleansing ritual with such awe. All the jars, potions, and lotions that she slathered seemed so glamorous compared to my splash of water. When my mother purchased her skincare products, she either bought them at a drug store/supermarket or a department store. There weren’t any other choices. But Sephora took the counters down and placed the products front and center for consumers to experiment. And while makeup and its various colors and shiny bells and whistles are more commonly associated with the word “play,” 2015 has seen smaller skincare categories emerge as not only functional, but fun.
No category has benefitted more from play than masks. In 2013, masks were a small piece of the skincare face business – barely 1 percent and a $60 million sub-segment. But in the past two years, its volume has doubled*. The same attributes that at one time created apprehension in brands and retailers are the same qualities that make masks attractive to consumers. Masks are more likely to be an impulse purchase and least likely to be brand specific**. With innovative formulas and formats and a focus on results, it’s easy to find reasons to purchase a mask.
While mask growth is still impressive and in the double digits, facial cleanser’s growth, though less dramatic, has seen a positive halo effect. Most likely an extension of masks, the cleansers sub-segment has traditionally received little attention. With a low price-point and lower commitment, the industry perception is that dollars are better spent on larger sub-segments with more hefty return. Cleansers, however, have seen excitement across most channels; brick-and-mortar, online, and fine department stores are all posting strong growth. This year, we’ve seen several formats debut, create excitement, and conceivably pique the consumer’s interest.
Both masks and cleansers have brought excitement to the consumer and created an environment where the shopper wants to try the new formats and ingredients that are being reported by bloggers and reviewed online. But in order for skincare to regain steady footing, creating an in-store environment that is not only inviting but low pressure, social, and entertaining is key. Using these two entry categories to introduce your brand is a smart way to arouse interest in prospective buyers and create an inviting environment for them to have some fun.
*The NPD Group, Inc. / U.S. Prestige Beauty Total Measured Market
** The NPD Group, Inc. / Women’s Facial Skincare Consumer Report 2015
Years ago, when I was home from college for Christmas break, I remember taking my closet apart one night searching for my favorite “going out” sweater to wear to a party. I knew I never brought it up to school, so it had to be there – except it wasn’t. Aggravated and annoyed, I ended up wearing something else. The next morning, my sister walked into my room to ask me a question and she’s wearing—you guessed it—my favorite sweater. And damn if she looked better in it than I did.
As any woman with a sister knows, whether you like it or not, sisters will borrow from your closet. In the world of beauty, makeup and skincare are no different. Moisturizers with a tint, foundation with sun protection, and colored lip balms are all proof of how these sister categories borrow from each other. But what happens when one sister outshines the other, helped in part by what she borrows? Kind of like when she looks better in your clothes than you do. But I digress.
Consider this. The gap in dollars between prestige makeup and skincare sales has widened. While both categories have grown in volume every year since 2013, makeup has grown at three to four times the rate of skincare, resulting in a gap in dollars of over $1.5 billion in 2015. This is three times larger than the gap between the categories two years ago. So yes makeup is doing well, but it appears to be succeeding at the expense of skincare.
Consumers continue to search for instant gratification and makeup delivers on that need. Add to that an expanded range of skincare benefits (serum foundations, primer oils) and skincare trends (star ingredient, natural products), and the evidence is clear that in addition to fun and play, makeup can also deliver on a multitude of more serious skincare needs.
While this may be dispiriting news for skincare, this is excellent news for consumers. There is no doubt that the sisterly bond that ties makeup and skincare is both important and beneficial to all beauty users, and will continue to drive the sales of both categories for years to come.
Source: The NPD Group, Inc. / U.S. Prestige Beauty Total Measured Market
I am very finicky about what is in my skincare products. I like all natural, organic ingredients and the only way I can control what goes into my skincare is by making the products myself. So, every few weeks you will find me in my kitchen melting and mixing small batches of butters and oils. My sisters used to make fun of my kitchen chemistry, but now I hand them a self-satisfied smile when they beg me to mix up a batch for them.
Though I love making my own beauty products from scratch, I have tried to DIY only for skincare and never for makeup. You will not find me crushing berries and bugs for that perfect shade of red lip stain—even I have my limits. It’s just that I’ve always found DIY makeup to be a little harder to create. According to an NPD study, 4 percent of female consumers DIY all of their makeup products, while 12 percent reported that if they had more time, they would DIY some or all of these products*.
My skepticism, however, was thrown out the window when I heard about a new makeup product that allows users to easily create their own foundation. I currently know of two such products on the market. They can be mixed with any facial product—be it a serum, oil, moisturizer, another foundation, or even my DIY skincare body/facial butter—to create a custom blended foundation. The coverage can also be customized by adding less or more drops of the pigment concentrate. Besides the DIY aspect, I also like that I can add more makeup to my skincare. These kinds of products would appeal to women who may not necessarily be DIYers but like using makeup with skincare benefits, as more than eight out of ten use makeup with skincare benefits**.
Today it’s pigment concentrates for DIY foundation; tomorrow it may be these kinds of concentrates for blush, eye shadow, or even lipstick. The kitchen chemist in me just cannot wait for ‘tomorrow.’
*Source: The NPD Group, Inc. / September 2015 Omnibus
**Source: The NPD Group, Inc. / 2014 Makeup In-Depth Consumer Report
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