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Makeup, Scent Sales Get Wired

Internet sales of cosmetics and fragrances now make up 4 percent of all sales, or about $1.7 billion in the more than $42 billion U.S. beauty industry, and it's one of the fastest-growing channels, according to a new report from the Port Washington,...

Internet sales of cosmetics and fragrances now make up 4 percent of all sales, or about $1.7 billion in the more than $42 billion U.S. beauty industry, and it’s one of the fastest-growing channels, according to a new report from the Port Washington, N.Y.-based The NPD Group consumer tracking firm.

In its recent report, “Emerging Channels: Beauty Care Products Over the Internet,” NPD said 43 percent of women who shop for beauty on the Internet reported that they spent more money online last year than they did in 2005. The number-one reason given for shopping on the Internet is convenience. A total of 74 percent of those who shop online say it “saves time” and about 70 percent say “it’s easier or quicker to shop online than in a store.”

“Consumers have become more wired and so they are more likely to research, choose and replenish beauty brands online,” said Karen Grant, senior beauty industry analyst for NPD. “We find that women are less accepting of buying new brands over the Internet, but they are spending their money on brands they know and trust.”

Contrary to popular opinion, middle-aged women are just as likely to shop on the Internet for beauty products as their younger counterparts. Among women who shop the Web for beauty products, 41 percent are 45 to 64 years old and 36 percent are 18 to 34 years old. NPD pointed to the large percentage of women aged 45 to 64 who shop on the Internet and predicted that “this age group will become increasingly more important as it’s the fastest growing segment of the population.”

In a statement, Grant added, “Buying beauty products has traditionally been a touch-and-feel experience, but we are seeing women utilizing the Internet more and more to buy beauty products, particularly the brands they are familiar with. Age is not an issue; we find shopping online crosses all age groups.

“As a channel, the growing importance of the Internet for beauty is undeniable. However, like every other channel, it also has inherent challenges,” continued Grant. “Women love the Internet for its convenience, but they also love the in-store experience. In fact, nine out of 10 females ages 18 to 64 tell us that the number-one reason they will shop in-store is the experience of touching and feeling the products — something the Internet does not provide. So, it’s important to get a deeper understanding of what drives consumer choice on the Internet. Where and how beauty is purchased is not an either-or scenario. It is the marriage of the in-store experience with the Internet that will secure the success for brands, manufacturers and retailers in the future,” said Grant. The top Web sites that the women respondents report buying from are: Drugstore.com, sephora.com, avon.com, clinique.com and bathandbodyworks.com.

This story first appeared in the June 29, 2007 issue of WWD.  Subscribe Today.

Internet consumption increases with income, according to the study. Fifteen percent of women in the $75,000-and-above category shop the Web for beauty products, versus 10 percent of women with household incomes of $35,000 to $44,000 and 7 percent of women with household incomes of less than $35,000.

NPD said its survey reached 15,000 women ages 18 to 64 with an ending sample of 4,135 who reported shopping for beauty products during the past 12 months.