"Some of this growth is due to larger-size products in department stores and increased sales of higher-priced gift sets. Value, convenience, innovation and technology continue to drive the beauty business across all channels of distribution," said the president of NPD Beauty Timra Carlson.
In 2003 sales grew six per cent to $2 billion with unit sales rising by one per cent. Average prices increased five per cent as consumers focused on new cutting edge technologies, anti-aging and high-end products.
In 2003 prestige make-up generated $2.6 billion in sales, up four percent from 2002 with a two per cent increase in units. At an average cost of $19, make-up products were priced two per cent higher than the prior year.
"NPD finds prestige make-up sales to have an edge over other channels of distribution because of their increasing portfolio of niche and innovative branding, this has offset the difference between dollars and units," said Carlson.
Fragrances however continued to struggle. Prestige fragrances reached $2.8 billion dollars in 2003 - down two per cent - while units fell six per cent from 2002.
Several new fragrances launched in the women's category helped to mitigate further declines, while the men's category struggled to compete with 2002's new launch activity.
"Looking ahead to 2004, we may witness a more pronounced change in the way fragrances are organized and chosen by consumers - by 'fragrance family'. When it comes to makeup, multi-functional products that offer innovation and value will continue to grow," said Carlson.