The only way is up as US beauty industry rises from recession

By Andrew McDougall

- Last updated on GMT

Related tags: Marketing, Percentage point

The only way is up as US beauty industry rises from recession
Total US beauty sales are up in both the prestige and mass markets for the first quarter of 2011, suggesting that after a cautious 2010, the beauty industry has shaken off the recession.

Market research providers SymphonyIRI Group and The NPD Group announced the results (monitoring the period January through March) as part of the Beauty Cross Channel Monitor.

The Beauty Cross Channel Monitor is the US beauty industry’s first point-of-sale tracking product that looks at sales performance in department stores (prestige) and the food, drug, and mass market, excluding Walmart (FDMx).

Prestige and mass both on upward trend

According to the Monitor, total US beauty sales in the prestige and FDMx channels are trending similarly in first quarter 2011, up 5 percent and 4 percent, respectively.

Results show that make-up sales, while also trending similarly, tells a slightly different story with the FDMx channel faring better than prestige, due in part to the double-digit sales in the $127m nail segment.

“Despite the current economic situation, the beauty industry continues to trend upward showing growth for the fourth consecutive quarter in both the food/drug/mass and prestige channels,”​ said Diane Nicholson, president, Beauty, The NPD Group.

“After a positive, yet cautious 2010, it’s encouraging to see consumers continue to embrace newness and innovation in the beauty space.”

Plans for increased consumer spending

According to NPD’s Economy Tracker, 35 percent of consumers planned to maintain or increase their spending in cosmetics and fragrances for first quarter 2011, up two percentage points from last year, despite the fact consumers are also dedicating a larger percentage of their wallets to gas and groceries, as prices of these categories rise.

In fragrance, the prestige market grew by 6 percent during the first quarter of 2011 versus flat sales in the FDMx channel. NPD says the increase in prestige fragrance is due to the positive performance in top existing juice brands, as well as strong sales from 2010 fragrance introductions.

Conversely in skin care, the FDMx channel is triple the size of the prestige channel, yet prestige is trending better, up 6 percent versus 3 percent in FDMx. The face, sun care, and gift set segments were key drivers in the growth of prestige skincare, according to results.

“Now more than ever, as the beauty consumer evolves and channel shifting continues, the Beauty Cross Channel Monitor is a valuable resource for understanding beauty trends across the prestige and mass markets,”​ said Victoria Gustafson, vice president, Beauty Vertical, SymphonyIRI Group.

“Capitalizing on the dynamics between these channels is a critical component to maximizing brand strategies.”

Related topics: Market Trends

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