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Pockets of growth show signs of hope for beauty industry
24
Mar '10
According beauty market research conducted by The NPD Group Inc a leading market research company, in 2009, the total U.S. prestige beauty receded to $8.19 billion, a loss of 6 percent, compared to 2008.

Prestige Fragrance
The overall industry decline was primarily driven by fragrance. Total sales of fragrance totaled $2.48 billion in 2009, down ten percent in both men's and women's. One segment that performed slightly better than the overall market was gift sets, which dropped the least, down 8 percent in women's and 5 percent in men's, offset somewhat by the increase in average price, reaching an average of $64.50 for both genders.

In women's fragrance juices sales of smaller sizes (1 ounce and under) worked for both men's and women's fragrances. Women's fragrance juices under one ounce grew 8 percent in units, versus annual 2006. Looking at new smaller skus in 2009, growth came from new items like the Harajuku Lovers Snow Bunnies, as well as existing skus like Beautiful and Pleasures. Innovative styles like the Romance and Ralph rollerballs and the solid perfume necklace from Daisy all performed well at retail. For men, growth came from one ounce skus from Polo Blue, Polo Black, the One, Light Blue, and the original Polo.

Prestige Makeup

Prestige makeup posted its second year of declines, down 5 percent in dollars to $3.16 billion. The only two segments to outperform the category were gift sets (+2%), fueled by new face-focused sets and the face segment (-2%), which was driven by mineral-based products. This was aided in part by the fact that there were 50 percent more new mineral products introduced in 2009.

“It is important to point out that prestige only captures a small slice of the mineral makeup pie, but this product remains a big focus and a major driver of the face segment in prestige,” said Karen Grant, vice president and global industry analyst, The NPD Group.

Prestige Skincare

The prestige skincare category posted its first year of declines, down 4 percent in dollars to $2.47 billion. Sets & Kits (+8%) and Hair (+2%) were the only two segments to see growth in dollars.

Even though the category struggled overall, on a positive note, skincare was the only beauty category to see growth in fourth quarter (Oct. - Dec.) 2009, up 2 percent in dollars. The key driver to the quarter's results was basic care skincare, specifically dedicated to sensitive skin, which saw positive growth - outperforming anti-aging growth for the first time.

“2009 was indeed a very challenging year for the beauty industry,” said Grant. “And now in 2010, the reality is that business will still be challenging. The other absolute reality is that consumers – as many as three in five women, tell NPD they are buying beauty products because 'they make me feel confident' and 'even in these tough economic times, I will still buy beauty products because they make me feel better about myself'. As our consumers increasingly seek the best product for the price or the best price for the product we must continue to stay focused on what will increase our relevance to them,” ended Grant.

NPD Group Inc


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