Twenty Percent of Skin Care Dollars Spent on Upscale Products

Baby Boomers, who generally have significant disposable income and are concerned with retaining their youthful appearance, may be the driving force behind the increase in upscale skin care products.

According to The NPD Group, the sale of luxury skincare products priced above $50, particularly those with anti-aging properties, has grown 27% from 1997 to 2000. Now accounting for one-fifth of total category dollars, sales of luxury skincare products totalled $354 million for 5.3 million units in 2000.

Money is no object when it comes to this market. According to NPD BeautyTrends retail point-of-sale data, the priciest item tracked was La Prairie’s 7oz Skin Caviar Luxe Cream at an average cost of $300. However, more and more of these higher-priced SKUs are from traditional department store brands such as Estee Lauder and Lancome, not just classic luxury brands like La Prairie and Guerlain.

“We’re seeing successful skincare franchise lines like Estee Lauder Re-Nutriv ($52-$250), which launched in the late 1950s, competing head-to-head with lines like Guerlain Issima ($50-190) in the battle for consumers prestige dollars,” observed Mark Brooks, skin care manager at NPD BeautyTrends.

Swiss brand La Prairie expanded its offerings the most, claiming over one quarter of all new high-end SKUs. Over the past four years, Guerlain also introduced a number of products from facial moisturizers to anti-aging products to body treatment products. Erno Lazlo rolled out a couple of different lines from day and night moisturizers to Retinol eye products to Intensive Firming face products. Still others who have introduced more expensive skincare items in the past four years include Chanel, Shiseido, Dior, Clarins and YSL. Industry sources mentioned recently that Givenchy is planning to launch a new luxury line sometime this year.

“The future looks promising for the age specialist category as it remains the primary source for technological breakthroughs and innovation. In consumers’ eyes, high costs are justified by the advanced technology and complex ingredients required to develop the best skincare products,” added Mr. Brooks.

With older people becoming a larger proportion of the population (38% according to the latest census are 35-to-64 years old), NPD anticipates that this segment of the beauty industry will continue to be strong for many years to come.