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    Breaking News

    Big Gains for Beauty

    Prestige sales rise 6% says NPD.

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    02.08.17
    Two thousand sixteen was a thing of beauty as the US prestige beauty industry grew 6% last year. It marked the third consecutive year that the beauty industry gained $1 billion for three consecutive years and it was the frst time the market reached $17 billion in sales, according to global information company The NPD Group. The makeup category once again experienced the greatest sales growth (12%) and contributed 82% of the industry’s total gains; skin care followed in sales growth (2%); and fragrance (1%).


    “The beauty industry has gained $1 billion for three consecutive years, and while this is something to celebrate, industry players must not get too relaxed. This is no time for walking; it is still very much a run,” said Karen Grant, global beauty industry analyst, The NPD Group. “A proliferation of trends has fueled growth and innovation in many aspects of the industry; however, it has brought with it a restructuring in beauty. As consumers seek feel good experiences and strive for healthier lifestyles they are, at the same time, redefining the meaning of beauty in their lives.”


    Beauty Restructured


    Makeup was the big headline for the industry in 2016. Four out of every five dollars gained in prestige beauty stemmed from makeup. Looking at new product launches in 2016, makeup’s dominance was also evident as sales grew 24% over 2015, achieving almost $1 billion, while skin care and fragrance sales declined. The market drivers in skin care are those products that help the face to be makeup ready, including masks (24%), lip treatments (20%), facial cleansers (7%), and facial exfoliators (5%).    


    Looking at the prestige fragrance category, sales of juices grew 2%for the year. Flankers were a growth driver for this segment, generating 21% of total fragrance sales and 161% of fragrance gains. Coinciding with experiential beauty, fragrance beyond the body was a key growth driver for the category in 2016. Home scents contributed over one-quarter of fragrance gains, with notable growth coming from diffusers (19%), candles (16%), home ancillaries gift sets (75%), and other home ancillaries (21%).


    At a topline channel level, the prestige market outpaced the U.S. mass** channel, where sales grew 2% for total beauty in 2016, as per Nielsen. Unlike prestige, the mass growth was driven equally by the makeup and skin care categories. Skincare saw greater gains in mass than prestige, and fragrance sales were down for the mass channel in 2016.


    A New Look for Beauty in Holiday 2016


    Beauty restructuring was also evident by the industry’s performance during the holiday season. While the holiday season has traditionally been viewed as the perennial l fragrance season, makeup is now leading; prestige fragrance sales declined 1% in Q4 2016, while makeup sales grew 12% during this time. This shift impacted overall holiday performance, as dollar growth slowed in the fourth quarter of 2016 (5%) compared to 2015 (7%). Surpassing fragrance sales in the fourth quarter, prestige makeup sales generated nearly $525 million more than fragrance during the 2016 holiday season.


    “How consumers are using and choosing their beauty products is different today. More than ever, consumers are turning to beauty to look and feel their best. Across industries, services and experiences are on equal, if not higher, footing than products alone. These trends convey to us that there’s a shift in what makes consumers feel good, and how they are gifting to others,” said Grant. “The top-performing brands today are social and community-driven. To be successful, brands and manufacturers need to look beyond the traditional retail channels and find more opportunities to adapt to the emerging trends. They must recognize that it is not only important how many consumers are aware of your brand, but how many convert to it. Those that master this technique will thrive.”  


    *Source: The NPD Group, Inc. / U.S. Prestige Beauty Total Measured Market, Annual 2016

    **Source: Nielsen, Food/Drug/Mass


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