Prestige suffers, face segment strong
PORT WASHINGTON, N.Y. —It has been a rough road for the U.S. prestige beauty industry as beauty mavens tightened the grip on their wallets, causing sales of those products sold mainly in department stores to sag 3% in 2008, according to market research company The NPD Group.
“The economic realities of 2008 have created fundamental shifts in the behavior of our consumers and the way they approach beauty. In 2009, we recognize that while consumption will not stop for prestige beauty, it has changed. It has become and will become more careful, more selective and more meaningful,” stated Karen Grant, senior global industry analyst and VP beauty for NPD.
The decline in the U.S. prestige beauty industry was driven largely by fragrance, which experienced a 6% decline—women’s fragrance was down 5% and men’s fragrance down 8%, according to NPD.
Total U.S. prestige beauty* industry| SALES IN BILLIONS | DOLLAR SHARE | % CHG ’08 VS. ’07 | |
| Total beauty | $8.38 | 100% | -3.0% |
| Makeup | 3.20 | 38 | -3.0 |
| Fragrance | 2.68 | 32 | -6.0 |
| Skin care | 2.40 | 29 | 0.0 |
However, sales of higher priced gift sets—those priced between $60 and $100—were a bright spot for the fragrance category. This category represented 65% of gift set sales in 2008, compared with 40% in 2005, and experienced a growth in both dollars (12%) and units (11%).
Thanks to such new brands as Viva La Juicy, Estée Lauder Sensuous, Ed Hardy and the Harajuku Lovers collection, women’s new fragrances posted a 9% boost in 2008, according to NPD.
Fragrance sales have struggled for the past few years, but a bit of a surprise, according to NPD, is the decline in the makeup category. Year 2008 marked the first time makeup products posted a decline, dropping 3% in dollars and 6% in units. All segments in the makeup category—eyes, lips and face—experienced a decline in 2008.
Natural makeup experienced a surge in prestige offerings in the past year, however. Premium-priced products in the face segment also showed strength in 2008, even as other makeup segments struggled with their premium-price offerings, the research stated.
Prestige skin care managed to stay afloat, capturing 29% dollar share of total prestige beauty sales, an additional share point over 2007. Total prestige products, which include face, body, sun and hair, generated $2.4 billion in 2008.
NPD also found that anti-aging face products grew, and products that offered specialization (e.g., allergy relief, redness and whitening/brightening) were up double digits. Premium-priced facial products ($70 and up) increased 4% from 2007.
Natural/spa/wellness skin care brands showed the strongest dollar growth of the distinctive brand types, up 6% versus the year-ago period, to $304 million.