Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Market is growing, but may be impeding its own potential
- Heavy competition for a piece of the pie
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- Figure 1: Retailers shopped primarily, June 2018
- The opportunities
- Define what inclusivity means
- Capitalize on the store experience, but encourage more cross-channel shopping
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- Figure 2: Method of shopping, by generation, June 2018
- Go beyond free to value-add
- Devise strong social media and influencer strategies
- What it means
The Market – What You Need to Know
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- Slow gains expected
- Some troubled segments impede overall growth
- Population growing and diversifying
- Interest in health and wellness spills over to beauty
Market Size and Forecast
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- Inching up, one year at a time
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- Figure 3: Total US retail sales and fan chart forecast of beauty products, at current prices, 2013-23
- Figure 4: Total US retail sales and forecast of beauty products, at current prices, 2013-23
Market Breakdown
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- Share leaders
- Color cosmetics maintains stronghold
- Fast-growing categories
- Strong economy boosts smaller, discretionary categories
- Facing challenges
- Concerns about nail damage and a general orientation towards lower-priced products impedes growth of struggling sectors
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- Figure 5: Total US retail sales of beauty products, by segment, at current prices, 2016 and 2018
- Vast majority of purchases occur outside of grocery and drug channels
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- Figure 6: Total US retail sales of beauty products, by channel, at current prices, 2016 and 2018
Market Factors
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- Women 35-44 represent a key target segment; men still important contributors
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- Figure 7: Level of involvement, by gender and age, June 2018
- Country’s diversification shapes the beauty market’s future
- Consumers more mindful of their health and wellness, leading to a “clean beauty” phenomenon
- Clean beauty
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- Figure 8: Attitudes toward product labels and ingredients, by age, June 2018
- Ingestibles
- Cruelty-free claims on the rise in color cosmetics
Key Players – What You Need to Know
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- Augmented reality: are brands more interested in it than consumers?
- Direct sellers and subscription services attract niche targets
- The Amazon effect is about to get stronger
- Brands using tech to become more personalized
What’s Trending?
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- Au naturel in all forms is in, but that’s not all that women want
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- Figure 9: Interest in beauty trends, by race and Hispanic origin, November 2017
- Augmented reality is what’s now and what’s next
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- Figure 10: Influence of augmented reality on store selection, by generation, June 2018
- In their words: AR, yay or nay?
- Target’s on a beauty craze
- Riley Rose on the scene
What’s Struggling?
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- Direct sales companies and subscription services not scaling audiences
- Direct sales companies
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- Figure 11: Shopping incidence of direct sales companies, May 2017 and June 2018
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- Figure 12: Interest in direct sales companies, by generation, June 2018
- In their words: thoughts on direct sales companies
- Subscription services
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- Figure 13: Beauty box subscription shoppers – Any shopping (net), by generation, June 2018
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- Figure 14: Dollar Shave Club “Getting Ready” TV ad, July 2018
What’s Next?
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- Wellness 2.0
- Here comes Amazon…again
- Voice-activated assistants as the new beauty advisors
- Machine learning aids online retailers in becoming more personable
- DNA testing takes personalization to a whole new level
The Consumer – What You Need to Know
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- Not all beauty buyers are women 18-34
- Spending on the rise
- Amazon has surpassed specialty beauty retailers in terms of where consumers shop
- Sensorial experiences tough to emulate online
- Social media and influencer strategies required
Who’s Buying?
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- Retailers should focus on increasing basket size or stimulating repeat purchases among light buyers
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- Figure 15: Repertoire of beauty items purchased, June 2018
- Heavy buyers: adults 35-54 emerge
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- Figure 16: Repertoire of heavy* beauty purchasers, by age and gender, 2017 versus 2018, May 2017 and June 2018
- Light buyers: African American consumers buying less
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- Figure 17: Repertoire of light* beauty purchasers, by race and Hispanic origin, 2017 versus 2018, May 2017 and June 2018
- Two thirds actively involved in the beauty buying process
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- Figure 18: Engagement, by repertoire of beauty items purchased, June 2018
Spending
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- On average, spending has increased 13% in past five years
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- Figure 19: Trended mean spending by category, January 2013 – March 2018
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- Figure 20: Trended mean fragrance spending, January 2013 – March 2018
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- Figure 21: Amount spent on fragrances, January 2017 – March 2018
- Multicultural consumers outspending Whites
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- Figure 22: Mean spending by category, by select demographics, January 2017 – March 2018
Retailers Shopped
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- Nearly eight in 10 consumers shop at five channels
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- Figure 23: Retailers shopped, June 2018
- Channel shifting continues to occur
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- Figure 24: Retailers shopped – Any shopping (net), 2017 versus 2018, May 2017 - June 2018
- In their words: where they shop and why
- Men seek the basics while women are more selective
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- Figure 25: Retailers shopped – Any shopping (net), by gender, June 2018
- Where are the young women shopping?
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- Figure 26: Retailers shopped – Any shopping (net), by females and age, June 2018
- Where are multicultural consumers shopping?
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- Figure 27: Retailers shopped – Any shopping (net), by race and Hispanic origin, June 2018
Spotlight on Ulta Beauty and Sephora
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- iGen and Millennial women still love specialty stores
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- Figure 28: Specialty beauty retailers shopped, 2017 versus 2018, May 2017 and June 2018
- Similar offerings and clientele
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- Figure 29: Specialty beauty retailers shopped, by select demographics, June 2018
- In their words: Ulta versus Sephora
- Recent initiatives
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- Figure 30: Ulta Beauty “The Possibilities Are Beautiful” TV ad, September 2018
Method of Shopping
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- Flocking to the store
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- Figure 31: Method of shopping, 2017 versus 2018, May 2017 and June 2018
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- Figure 32: Method of shopping – nets, May 2017 and June 2018
- Nearly half of iGens and Millennials are multi-channel shoppers
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- Figure 33: Method of shopping, by generation, June 2018
- In their words: store versus online?
A Deeper Look at Online Shopping
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- Exclusive online products can create intrigue
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- Figure 34: Online purchase drivers for beauty items, March 2018
- Online brand personality is important to consider
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- Figure 35: Reasons for adding the last beauty product purchased online to an online shopping cart, by women 18-34, February 2018
- Barriers such as lack of sufficient product information or reviews are easier to address
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- Figure 36: Reasons for not shopping for beauty products online, April 2018
- In their words: what consumers will buy online
Items Purchased
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- High purchasing rates for grooming staples
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- Figure 37: Items purchased, June 2018
- It’s not all about women 18-34
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- Figure 38: Items purchased, by female and age, June 2018
- Online shopping rates fairly consistent for most categories
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- Figure 39: Online versus in-store shopping habits for beauty products, February 2018
Shopping Behaviors: Routine versus Variety
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- Majority of beauty buyers comfortable in their routines…
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- Figure 40: Routine behavior, by repertoire of beauty items purchased, June 2018
- …but open to exploring options
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- Figure 41: Experimentation level, by gender and age, June 2018
- Loyalty programs can create an emotional connection with customers
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- Figure 42: Loyalty program engagement, by female age, June 2018
Influencers
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- Instagram is the place to be
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- Figure 43: Social media influence, by generation, June 2018
- Using social media to engage customers
- Are sales associates losing their credibility to other influencers?
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- Figure 44: Social media influence, by generation, June 2018
- In their words: the role of the sales associate
- Personal stylists another (secondary) source of influence
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- Figure 45: Influence of personal stylists, July 2018
Interest in Retail Offerings
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- Women want more than free stuff
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- Figure 46: Interest in retail offerings, July 2018
- Samples and unique products could reach two thirds of shoppers
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- Figure 47: TURF Analysis – Interest in retail offerings, June 2018
- In-store beauty services gaining universal appeal
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- Figure 48: Interest in select retail services, by female age, June 2018
- Multicultural consumers prefer a personalized approach
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- Figure 49: Interest in select retail services, by race and Hispanic origin, June 2018
- In their words: if they owned their own store
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- TURF methodology
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 50: Total US retail sales and forecast of beauty retailing, at inflation-adjusted prices, 2013-23
- Figure 51: Total US retail sales of beauty products, by channel, at current prices, 2016 and 2018
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- Figure 52: US supermarket sales of beauty products, at current prices, 2013-18
- Figure 53: US drugstore sales of beauty products, at current prices, 2013-18
- Figure 54: US sales of beauty products through other retail channels, at current prices, 2013-18
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- Figure 55: Female population by age, 2013-23
- Figure 56: Male population by age, 2013-23
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- Figure 57: Population by race and Hispanic origin, 2013-23
- Figure 58: Consumer Sentiment Index, January 2007- July 2018
- Figure 59: Disposable Personal Income change from previous period, January 2007-June 2018
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Appendix – The Consumer
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- Figure 60: Trended purchase incidence of personal care products, January 2013 – March 2018
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- Figure 61: Trended purchase incidence of fragrances, January 2013 – March 2018
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- Figure 62: Trended spending on personal care products, 2014 versus 2018, January 2013 – March 2018
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- Figure 63: Trended spending on fragrances, 2014 versus 2018, January 2013 – March 2018
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- Figure 64: Amount spent by category, January 2017 – March 2018
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- Figure 65: Table - TURF Analysis – Interest in retail offerings, June 2018
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