BW Confidential - Issue #3 - September 2010 - (Page 44)

Market watch: US The US market Industry roundtable p.46 Retailing analysis p.48 Emerging retail channels p.50 Better days ahead The US beauty market was hit hard by the crisis. What has changed for brands, retailers and consumers and how will the sector evolve in 2010 and beyond? by Alissa Demorest he US beauty market hit bottom in 2009, and there’s still a lot of consumer uncertainty making brands and retailers cautious. Manufacturers’ sales across prestige and mass combined were down by 0.8% in 2009 to $35.5bn according to market research firm Kline & Company, and only the make-up segment saw a slight uptick at +2%. Prestige beauty sales, however, declined by 6% to $8.19bn, according to The NPD Group. Fragrance was down by 10% and make-up and skincare fell by 5% and 4% respectively. Kline reports that beauty sales in department stores and salons dropped by more than 9% in 2009. The good news is that the prestige business has been looking up since the end of 2009. Skincare sales, especially premium items began to recover in the first quarter of 2010, and the segment is now growing by double digits, says NPD (although this is compared with a poor 2009). Make-up is also beginning to see growth in the department-store sector. Perhaps tired of the natural and mineral trend, shoppers are now seeking out stronger color 44 T palettes in their make-up. On the manufacturer front, “prestige brands have been developing their sweet spots,” explains NPD Beauty global industry “ Re-Nutriv franchises. L’Oréal, which says it is “still a little behind in terms of market share gains in the US prestige market” is also looking forward to a better second half, due in part to major product introductions from Lancôme, Armani and Ralph Lauren. Is fragrance getting better? Prestige fragrance, meanwhile, saw its first positive month in May after more than 12 months of steady decline. The top end of the category performed well, as did smaller sizes and novelty packaging, such as roller balls and portable items, which allowed consumers to experiment without paying full price. Gift sets have also been a big feature in fragrance, making up one third of the category’s sales last year. NPD notes that high-end fragrance sets—those retailing at between $80 and $100 (well above the average $50 set) saw sales volume double. Indeed, in all categories in the department store arena in the past 12 months there was a “huge activity” in gift-set sales, says NPD’s Grant, offering shoppers sometimes more than 50% off the regular retail price. September 2010 - N°3 - BW Confidential At an average of $42, the price of some mass products was similar to prestige. The consumer was getting a mass translation of a prestige product at a discount NPD Beauty global industry analyst Karen Grant analyst Karen Grant. She cites Estée Lauderowned Clinique’s focus on its ‘problem-solving’ products, while the Lauder brand has been driving anti-aging skincare through its high-profile Advanced Night Repair and ”

Table of Contents for the Digital Edition of BW Confidential - Issue #3 - September 2010

Cover
Contents
Comment
Update
- Brand & retail news recap
- Digital digest
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
Launches
- The latest in fragrance, skincare & make-up
Interview
- O Boticário president Artur Grynbaum
Insight: luxury
- Category overview
- Pricing
- The internet
- Return to quality
Wellness
- The spa consumer
- Spa case studies
Retail
- New store concepts
Travel retail
- Inflight sales
Market watch: US
- Country overview
- Industry roundtable
- Retailing analysis
- Emerging retail channels
Radar
- Six up-and-coming beauty brands
Packaging trends
- Make-up innovations
Last word
- Inspiration&Creation founder Leïla Rochet-Podvin

BW Confidential - Issue #3 - September 2010