Less will be more for cosmetics players in 2010

By Simon Pitman

- Last updated on GMT

Related tags: Private label products, Cosmetics, Elizabeth arden

As the global economy emerges from recession, consumers are embracing more modest consumption patterns, something cosmetics players cannot ignore as 2010 looms.

Shrinking spending power caused by the recession led to a significant shift in consumer patterns, with the financial results of some of the world’s biggest personal care players reflected by consumers downgrading to less expensive products.

Private label – which is characterized by no frills packaging, less complicated formulations and a cheaper price – has stolen the thunder from products placed at the upper end of the spectrum.

Likewise, niche natural products also continued to show market growth worldwide, despite the market recession. As with private label, they tend to have fuss-free packaging and simpler formulations, but have still proved increasingly popular despite commanding a premium price.

Will consumers continue to spurn luxury products in 2010?

But as consumer spending power shows the first clear signs of returning, it seems that luxurious products with higher price tags are more likely to be left behind on store shelves, as the commitment to products deemed to give greater value holds strong.

It would appear that the recession has caused many consumers to do some soul searching and question some of the indulgence they allowed themselves during the ‘good times’.

Underlining this trend is the fact that A-list stars such as Paris Hilton and Britney Spears no longer dominate the media headlines they once created all over the world, which cultural experts have attributed partly to the changing economic climate.

These names have become synonymous with excess and indulgence, characteristics once celebrated, but now deemed by many to be meaningless and frivolous.

Demise of Britney and Paris

Indeed, it is going to be very interesting to see if the demise in media coverage will affect sales of Paris Hilton and Britney Spears fragrances during the all-important 2009 holiday season.

In the space of the past five years Paris Hilton fragrances have been the driving force behind sales at the Parlux fragrance house while Britney Spears fragrances have helped cushion the performance of Elizabeth Arden during several challenging years.

Already the masstige, prestige and luxury cosmetics players have been hard hit throughout 2009, with consumers readily swapping $100-a-jar anti-aging cream for $20-a-jar private label products that claim to do the same job.

Gone are the chrome-plated, gold embossed, crystal-effect fragrances, face creams and color cosmetic products, to be replaced by simpler, more subtle products that do not promise the earth.

Return to hippe values?

These values also coincide with increased concern over the environment, which is leading consumers to search out more eco-friendly packaging, combined with a greater concern for health and well-being, which is pushing consumers towards simpler and more natural formulations.

In line with this, market researcher Mintel says that consumers will be looking out for ‘fitter’ products in 2010. This means cosmetics with fewer ingredients and packaged in a clear, fuss-free manner.

However, simply developing a copy cat private label or natural care products is not going to work as cosmetic consumers are always looking out for something new or that adds value.

The right track to follow is likely to be the development of products that combine the values of natural or private label products while adding greater functionality or enhanced product claims.

Bearing this in mind, 2010 is likely to be a busy year for packaging developers and formulators.

Related topics: Market Trends

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