Nancy Jeffries , Contributing Editor02.22.21
The recent State of the Beauty Industry Report, presented virtually by Cosmetic Executive Women (CEW), placed strong emphasis on recovery following a roller coaster year—some categories soared, others slumped badly and new trends emerged. For example, hand sanitizer sales grew 594%; one-third of mass beauty sales are now online; cruelty-free beauty product sales increased 75%; searches for Black-owned beauty brands grew 185%; prestige beauty sales fell 19%; and total prestige beauty industry losses reached $3.8 billion. According to the NPD Group, US sales in beauty, across categories, were: Makeup, -34%; skin care, -11%; fragrance, -8%; and hair, +7%. (click here to read Part I of CEW's State of Beauty Industry report.)
NielsenIQ Reviews an Unforgettable Year
Tara James Taylor, senior vice president, beauty personal care vertical, NielsenIQ, acknowledged that while stores closed, and beauty sales declined, the industry showed resilience. Grocery stores became the main shopping destination for consumers and online sales increased. Studies showed that vaccine skepticism varied across countries, with 54% of the population in the UK saying yes to the vaccine immediately; versus 41% in the US. In Japan, statistics revealed that 57% of the population preferred to wait for some time; while 30% of the population in France said no to the vaccine.
No getting around it, 2020 was a bad year for beauty, according to The NPD Group.
In an altogether unforgettable year, omni-shopping grew; sensitize and moisturize became key to hand care; DIY grew; and demand rose for multicultural products, click and collect shopping, natural beauty sustainability, and CBD/hemp products. Taylor said that online sales were the accelerant for beauty, and beauty and personal care sales rose 16%, with hand care and hair care strong online performers. In addition, convenience and safety drove shopping habits, with consumers seeking clean beauty, therapeutic and clinical products for facial skin care, like Cerave and Cetaphil. Gentle products showed continued growth, with 90% of consumers seeking gentle and efficacious ingredients.
Multicultural consumers drove personal care during the pandemic, and consumers engaged with both ingredients and social consciousness; 36% planned to increase hand moisturization; 18% planned to add products to their skin care routines; and 17% planned to deep condition their hair. African-Americans were 2.4X more likely to buy hair treatments; Hispanics were 1.4X more likely to buy lip and artificial nail products; and Asian Americans spent 1.3X more on skin care, and 1.5X more on fragrances.
Beauty made strides with products that resonated in self-care and low-maintenance for the growing at-home lifestyle, with a top trend being “Beauty for Me.” This manifested in such products as skin care for a particular facial condition, and the need for hand moisturization, due to the effects of frequent hand washing.
The premium men’s market also grew (+4.8%), with top brands including Dove Men + Care, Every Man Jack, Raw Sugar, and Dr. Squatch. Vegan certified grew (+40.7%), with such brands as Garnier Fructis, and Dr. Bronners, showing increased sales. Within the organic beauty category, Shea Moisture, Love Beauty and Planet, and ME! Bath, were strong performers; and cruelty-free products saw a +74.6% increase.
Resilience and DIY were dominant beauty trends, and brands acted fast to tap into their resources and seize opportunities on a global scale. In bath and body, Essenza Bath Bomb sales increased to +11mm, and Mei Apothecary Gua Sha Skin Care, sales grew to +1.4mm. Taylor noted growth came to those brands that thought outside the box, citing a rise in pet grooming sales (+27%), with such products as Burt’s Bees Tearless Shampoo for Pets.
In the wellness category, beauty supplements and personalization went mainstream, with Target and others offering customizable hair care products, and others offering beauty opportunities at home. Pockets of growth identified in mass, predicted to continue growing into 2021, include those smaller pools of innovation, which still drive 13% of category sales. These include products in the CBD/Hemp category, as well as vegan certified, organic, cruelty-free, and premium men’s products.
Taylor emphasized that 2021 is a new year, and it is time to drive with purpose and empathy. “It is not just a nice color and a package anymore. Move quickly, prepare to pivot, and embrace fun. In a stressful and challenging world, beauty should be a bit of an escape,” said Taylor.
NPD Group Sees Opportunity
Larissa Jensen, Vice President, Industry Advisor Beauty, The NPD Group, declared 2020 as the year that “hit prestige beauty like a brick.” In 2020, the US prestige beauty market decline was -19% and lost -$3.8 billion.
“We may feel burdened and challenged, but opportunities are there,” said Jensen.
Comparing the journey to a seed, which must come completely undone to achieve its greatest expression, everything must change. The shell cracks and the insides come out; and to someone who doesn’t understand growth, it would look like complete destruction. Jensen’s metaphor is not lost on the beauty industry.
“Brands are finding distribution outside of prestige channels,” she said, “and NPD is tracking traditional prestige, plus innovation labs and direct retail models, to understand the changes.”
The pandemic took its toll, with door-to-door closures, promotion, and consumer shifts driven by COVID, resulting in total volume sold in 2020 returning to 2015 spend levels. Retail spend started to grow in different areas as consumers moved online, but makeup remained especially challenged.
Bath specialty retailers were strong due to consumer demand for their product assortment, including soaps, candles and hand sanitizers; and other categories defied market dynamics, including growth in fragrance, potpourri, body spray, hand soap, exfoliators, and body serum (overall +$27.0 million). Declines online were seen in makeup cross segment, including lip color, and fragrance sets with ancillaries (-$7.6 million).
Jensen noted that behaviors have changed because of COVID, and preferences have emerged that could stick. Brands will have to determine which channels will respond to specific strategies, and how they will maximize each.
“Brick and mortar declines nearly mirrored online growth, and recognizing differentials revealed online penetration,” she said. “As individuals move to online it will be key to see why nuances are important. Brands sold in prestige channels have shifted, mid-range brands are capturing share, and the key to uncovering opportunities lies in recognizing the subtleties between the channels."
Jensen described how prestige distribution continues to morph, noting that more than half of makeup units sold online were on promotion. Direct retail declined through the crisis, and as stores closed, consumers moved online, with direct retail performing better than prestige during and after lockdown; presenting a key opportunity for direct retailers to fill a void for consumers. She cited both Sephora and Ulta as having increased their footprint by approaching consumers in different ways, noting two game changing partnerships that increased retail footprints. Target and Kohl’s saw increased purchase frequencies, higher spend per buyer, and a large consumer base. The partnership between Ulta and Target, expanded their existing consumer base; while Sephora and Kohl’s partnership targeted new consumers.
The stay-at-home economy has seen increased demand for sports equipment, small appliances, and housewares; and Americans have been saving on things like travel, and using their purchase power in the beauty segment and elsewhere. Fragrance took a huge hit in March and April, but grew +40% in June, a significant rebound. However, makeup has been unable to break out of the slump since COVID, as fewer consumers are using makeup and more are using skincare products.
While 2020 was hard on everyone, the female job market was particularly hard hit, said Jensen. Female job loss totaled one million more jobs lost then men, and this greatly impacted the beauty market. While 54% of total US workers are staying home, in those regions, makeup performance is weaker. The recovery of the makeup segment will be tied to the work recovery of women in those areas.
In 2020, makeup continued to lose share to skin care (makeup purchase fell 21% year on year, and average spend declined 3.8%); and clinical brands surpassed natural brands. The TikTok docs became a social media sensation, as TikTok became the app of choice for dermatologists to recommend products and educate consumers. Comfort was key, as consumers purchased candles, slippers, sweatpants and electric blankets, growing double digits in the comfort category. Feeling good, vis-à-vis clean brands and CBD product growth translated to +70%. In addition, spa days, supporting black-owned brands, and holiday spend, all saw growth. Brick and mortar channel also boosted results for fragrance and hair for holiday in December.
Clearly, 2020 was a year that changed everyone; with 49% still not comfortable shopping in stores and 64% still not comfortable eating in restaurants. This significant statistic appears to have found an antidote in the selection of Pantone’s 2021 Color of the Year, Illuminating Yellow. Much like the buried seed noted by Jensen at the beginning of the presentation, 2021 will ultimately see growth, and is already seeing growth in fragrance.
“Recovery, however, will be determined by when the consumer is ready to engage in normal activity,” said Jensen. She urged brands to adhere to strategies that leverage promotion; leverage the strengthen of each channel; maximize product assortment to meet consumers’ changing needs; and own the transformation.
Jensen closed with a breakdown of the year’s top winners in the beauty market.
Top Launches by Country:
• US: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• Canada: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• Mexico: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• UK: Marc Jacobs Perfect EDP 50ml
• Italy: Dior Capture Totale Cell Energy Cream 50ml
• Spain: Paula’s Ibiza Loewe EDT 50ml
• France: Miss Dior Rose N’ Roses EDT 50ml
• Germany: Boss Alive EDP 30ml
• Peru: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• Chile: MAC Maker Lipstick
• Argentina: Good Girl Supreme EDP Spray 80ml
• Brazil: Good Girl Supreme EDP Spray 80ml
• China: Lancôme Clarifique Refining Enzymatic Dual Essence
2020 Top Hair Launch:
• Living Proof Perfect Hair Day (PHD) Dry Shampoo
Top 5 Notable Hair Launches:
• Daily Rinse Shampoo: Ouai Fine Hair Shampoo
• Treatment: Olaplex No. 0 Intensive Bond Building Hair Treatment
• Daily Rinse Conditioner: Ouai Fine Hair Conditioner
• Styling: Drybar Liquid Glass Miracle Smoothing Sealant
• Hair Color: Drybar Blonde Ale Color-Enhancing Brightening Hair Mask
Top 5 Hair Brands:
• Olaplex
• Living Proof
• Moroccan Oil
• Bb Bumble and bumble
• Oribe
2020 Skin Care Top Launch:
• Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
Other #1 Skin Care Launches in 2020:
#1 in Units: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
#1 Black Friday: Philosophy Purity Made Simple One-Step Facial Cleanser Paraben Free
#1 Online: Clinique Limited Edition Moisture Surge 72-Hour Auto Replenishing Hydrator
#1 Velocity: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
#1 in New York: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
Top 5 Skin Care Brands:
Clinique
Estée Lauder
Lancôme
Kiehl’s
La Mer
US Makeup, 2020 Makeup Top Launch:
Too Faced Cosmetics – Born This Way, The Natural Nudes Eye Shadow Palette
Other #1 Makeup Launches in 2020:
#1 in Units: Benefit Cosmetics Brow Microfilling Eyebrow Pen
#1 Black Friday: MAC Powder Kiss Liquid Lipcolour
#1 Online: Too Faced Cosmetics - Born This Way, The Natural Nudes Palette
#1 Velocity: Hermes Satin Rouge Lipstick
#1 in New York: Too Faced Cosmetics - Born This Way, The Natural Nudes Palette
Top 5 Makeup Brands:
1. MAC
2. It Cosmetics
3. Clinique
4. Benefit
5. Lancôme
Top 10 Fragrance Launches:
1. Marc Jacobs Perfect
2. Acqua Di Gio Profundo
3. Armani My Way
4. Valentino Voce Viva
5. Coach Dreams
6. Paco Rabanne 1 Million Parfum
7. Coco Mademoiselle L’Eau Privée
8. Good Girl Supreme
9. Polo Deep Blue
10. Coach Blue
Top 5 Prestige Men’s Fragrance Parent Brands:
1. Sauvage
2. Bleu De Chanel
3. Acqua Di Gio Pour Homme
4. YSL Y Homme
5. Gucci Guilty Homme
The CEW State of Beauty was sponsored by Mane, Mintel, Nielsen IQ, NPD, BeautyInc, Fairchild Media Group, Moss, Cosmoprof North America, and Kaplow Communications. For more, click here.
NielsenIQ Reviews an Unforgettable Year
Tara James Taylor, senior vice president, beauty personal care vertical, NielsenIQ, acknowledged that while stores closed, and beauty sales declined, the industry showed resilience. Grocery stores became the main shopping destination for consumers and online sales increased. Studies showed that vaccine skepticism varied across countries, with 54% of the population in the UK saying yes to the vaccine immediately; versus 41% in the US. In Japan, statistics revealed that 57% of the population preferred to wait for some time; while 30% of the population in France said no to the vaccine.
No getting around it, 2020 was a bad year for beauty, according to The NPD Group.
Multicultural consumers drove personal care during the pandemic, and consumers engaged with both ingredients and social consciousness; 36% planned to increase hand moisturization; 18% planned to add products to their skin care routines; and 17% planned to deep condition their hair. African-Americans were 2.4X more likely to buy hair treatments; Hispanics were 1.4X more likely to buy lip and artificial nail products; and Asian Americans spent 1.3X more on skin care, and 1.5X more on fragrances.
Beauty made strides with products that resonated in self-care and low-maintenance for the growing at-home lifestyle, with a top trend being “Beauty for Me.” This manifested in such products as skin care for a particular facial condition, and the need for hand moisturization, due to the effects of frequent hand washing.
The premium men’s market also grew (+4.8%), with top brands including Dove Men + Care, Every Man Jack, Raw Sugar, and Dr. Squatch. Vegan certified grew (+40.7%), with such brands as Garnier Fructis, and Dr. Bronners, showing increased sales. Within the organic beauty category, Shea Moisture, Love Beauty and Planet, and ME! Bath, were strong performers; and cruelty-free products saw a +74.6% increase.
Resilience and DIY were dominant beauty trends, and brands acted fast to tap into their resources and seize opportunities on a global scale. In bath and body, Essenza Bath Bomb sales increased to +11mm, and Mei Apothecary Gua Sha Skin Care, sales grew to +1.4mm. Taylor noted growth came to those brands that thought outside the box, citing a rise in pet grooming sales (+27%), with such products as Burt’s Bees Tearless Shampoo for Pets.
In the wellness category, beauty supplements and personalization went mainstream, with Target and others offering customizable hair care products, and others offering beauty opportunities at home. Pockets of growth identified in mass, predicted to continue growing into 2021, include those smaller pools of innovation, which still drive 13% of category sales. These include products in the CBD/Hemp category, as well as vegan certified, organic, cruelty-free, and premium men’s products.
Taylor emphasized that 2021 is a new year, and it is time to drive with purpose and empathy. “It is not just a nice color and a package anymore. Move quickly, prepare to pivot, and embrace fun. In a stressful and challenging world, beauty should be a bit of an escape,” said Taylor.
NPD Group Sees Opportunity
Larissa Jensen, Vice President, Industry Advisor Beauty, The NPD Group, declared 2020 as the year that “hit prestige beauty like a brick.” In 2020, the US prestige beauty market decline was -19% and lost -$3.8 billion.
“We may feel burdened and challenged, but opportunities are there,” said Jensen.
Comparing the journey to a seed, which must come completely undone to achieve its greatest expression, everything must change. The shell cracks and the insides come out; and to someone who doesn’t understand growth, it would look like complete destruction. Jensen’s metaphor is not lost on the beauty industry.
“Brands are finding distribution outside of prestige channels,” she said, “and NPD is tracking traditional prestige, plus innovation labs and direct retail models, to understand the changes.”
The pandemic took its toll, with door-to-door closures, promotion, and consumer shifts driven by COVID, resulting in total volume sold in 2020 returning to 2015 spend levels. Retail spend started to grow in different areas as consumers moved online, but makeup remained especially challenged.
Bath specialty retailers were strong due to consumer demand for their product assortment, including soaps, candles and hand sanitizers; and other categories defied market dynamics, including growth in fragrance, potpourri, body spray, hand soap, exfoliators, and body serum (overall +$27.0 million). Declines online were seen in makeup cross segment, including lip color, and fragrance sets with ancillaries (-$7.6 million).
Jensen noted that behaviors have changed because of COVID, and preferences have emerged that could stick. Brands will have to determine which channels will respond to specific strategies, and how they will maximize each.
“Brick and mortar declines nearly mirrored online growth, and recognizing differentials revealed online penetration,” she said. “As individuals move to online it will be key to see why nuances are important. Brands sold in prestige channels have shifted, mid-range brands are capturing share, and the key to uncovering opportunities lies in recognizing the subtleties between the channels."
Jensen described how prestige distribution continues to morph, noting that more than half of makeup units sold online were on promotion. Direct retail declined through the crisis, and as stores closed, consumers moved online, with direct retail performing better than prestige during and after lockdown; presenting a key opportunity for direct retailers to fill a void for consumers. She cited both Sephora and Ulta as having increased their footprint by approaching consumers in different ways, noting two game changing partnerships that increased retail footprints. Target and Kohl’s saw increased purchase frequencies, higher spend per buyer, and a large consumer base. The partnership between Ulta and Target, expanded their existing consumer base; while Sephora and Kohl’s partnership targeted new consumers.
The stay-at-home economy has seen increased demand for sports equipment, small appliances, and housewares; and Americans have been saving on things like travel, and using their purchase power in the beauty segment and elsewhere. Fragrance took a huge hit in March and April, but grew +40% in June, a significant rebound. However, makeup has been unable to break out of the slump since COVID, as fewer consumers are using makeup and more are using skincare products.
While 2020 was hard on everyone, the female job market was particularly hard hit, said Jensen. Female job loss totaled one million more jobs lost then men, and this greatly impacted the beauty market. While 54% of total US workers are staying home, in those regions, makeup performance is weaker. The recovery of the makeup segment will be tied to the work recovery of women in those areas.
In 2020, makeup continued to lose share to skin care (makeup purchase fell 21% year on year, and average spend declined 3.8%); and clinical brands surpassed natural brands. The TikTok docs became a social media sensation, as TikTok became the app of choice for dermatologists to recommend products and educate consumers. Comfort was key, as consumers purchased candles, slippers, sweatpants and electric blankets, growing double digits in the comfort category. Feeling good, vis-à-vis clean brands and CBD product growth translated to +70%. In addition, spa days, supporting black-owned brands, and holiday spend, all saw growth. Brick and mortar channel also boosted results for fragrance and hair for holiday in December.
Clearly, 2020 was a year that changed everyone; with 49% still not comfortable shopping in stores and 64% still not comfortable eating in restaurants. This significant statistic appears to have found an antidote in the selection of Pantone’s 2021 Color of the Year, Illuminating Yellow. Much like the buried seed noted by Jensen at the beginning of the presentation, 2021 will ultimately see growth, and is already seeing growth in fragrance.
“Recovery, however, will be determined by when the consumer is ready to engage in normal activity,” said Jensen. She urged brands to adhere to strategies that leverage promotion; leverage the strengthen of each channel; maximize product assortment to meet consumers’ changing needs; and own the transformation.
Jensen closed with a breakdown of the year’s top winners in the beauty market.
Top Launches by Country:
• US: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• Canada: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• Mexico: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• UK: Marc Jacobs Perfect EDP 50ml
• Italy: Dior Capture Totale Cell Energy Cream 50ml
• Spain: Paula’s Ibiza Loewe EDT 50ml
• France: Miss Dior Rose N’ Roses EDT 50ml
• Germany: Boss Alive EDP 30ml
• Peru: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex 50ml
• Chile: MAC Maker Lipstick
• Argentina: Good Girl Supreme EDP Spray 80ml
• Brazil: Good Girl Supreme EDP Spray 80ml
• China: Lancôme Clarifique Refining Enzymatic Dual Essence
2020 Top Hair Launch:
• Living Proof Perfect Hair Day (PHD) Dry Shampoo
Top 5 Notable Hair Launches:
• Daily Rinse Shampoo: Ouai Fine Hair Shampoo
• Treatment: Olaplex No. 0 Intensive Bond Building Hair Treatment
• Daily Rinse Conditioner: Ouai Fine Hair Conditioner
• Styling: Drybar Liquid Glass Miracle Smoothing Sealant
• Hair Color: Drybar Blonde Ale Color-Enhancing Brightening Hair Mask
Top 5 Hair Brands:
• Olaplex
• Living Proof
• Moroccan Oil
• Bb Bumble and bumble
• Oribe
2020 Skin Care Top Launch:
• Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
Other #1 Skin Care Launches in 2020:
#1 in Units: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
#1 Black Friday: Philosophy Purity Made Simple One-Step Facial Cleanser Paraben Free
#1 Online: Clinique Limited Edition Moisture Surge 72-Hour Auto Replenishing Hydrator
#1 Velocity: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
#1 in New York: Estée Lauder Advanced Night Repair Synchronized Multi-Recovery Complex
Top 5 Skin Care Brands:
Clinique
Estée Lauder
Lancôme
Kiehl’s
La Mer
US Makeup, 2020 Makeup Top Launch:
Too Faced Cosmetics – Born This Way, The Natural Nudes Eye Shadow Palette
Other #1 Makeup Launches in 2020:
#1 in Units: Benefit Cosmetics Brow Microfilling Eyebrow Pen
#1 Black Friday: MAC Powder Kiss Liquid Lipcolour
#1 Online: Too Faced Cosmetics - Born This Way, The Natural Nudes Palette
#1 Velocity: Hermes Satin Rouge Lipstick
#1 in New York: Too Faced Cosmetics - Born This Way, The Natural Nudes Palette
Top 5 Makeup Brands:
1. MAC
2. It Cosmetics
3. Clinique
4. Benefit
5. Lancôme
Top 10 Fragrance Launches:
1. Marc Jacobs Perfect
2. Acqua Di Gio Profundo
3. Armani My Way
4. Valentino Voce Viva
5. Coach Dreams
6. Paco Rabanne 1 Million Parfum
7. Coco Mademoiselle L’Eau Privée
8. Good Girl Supreme
9. Polo Deep Blue
10. Coach Blue
Top 5 Prestige Men’s Fragrance Parent Brands:
1. Sauvage
2. Bleu De Chanel
3. Acqua Di Gio Pour Homme
4. YSL Y Homme
5. Gucci Guilty Homme
The CEW State of Beauty was sponsored by Mane, Mintel, Nielsen IQ, NPD, BeautyInc, Fairchild Media Group, Moss, Cosmoprof North America, and Kaplow Communications. For more, click here.
