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Beauty Roundup: May 1, 2009

All the research suggests shoppers are primed for the values at the mass market. But recent visits to mass cosmetics departments tell a different tale.

Why Aren’t There More Customers At Mass?

All the research suggests shoppers are primed for the values at the mass market. But recent visits to mass cosmetics departments tell a different tale. Stores are quiet and many lines are being marked down to be eliminated in 2010 planograms.

Still, recent studies suggest if you build it consumers will come, so busier days could be ahead. The most salient study comes from a unique collaboration between NPD and Information Resources Inc. NPD has always been the power behind prestige data; IRI, one of most respected in mass. Together they have reported the first point-of-sale tracking study looking at performance in department stores and food, drug and mass.

Called Beauty Cross Channel Monitor, it finds channel switching is definitely occurring. This is the first study to get a true estimate of the total U.S. market in department, drug, food and discount stores, estimated at $19.1 billion or roughly 60 percent of all beauty industry volume.

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According to the research, beauty shoppers are tightening their grip on wallets and switching channels, particularly in facial skin care. There is definitely shifting going on. For example, sales of makeup declined in 2008 for department stores, while posting a slight rise (1 percent) in food, drug and mass. Now, surprisingly, there’s the opposite motion in hair care. That segment actually grew 6 percent in department stores versus a decline of 4 percent in mass. This is attributed to high-end lines seeking distribution in department stores. Neither channel grouping fared well in women’s fragrance with prestige off 5 percent and mass 6 percent. Men’s dropped 8 percent in the prestige market; 6 percent in food, drug and mass.

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Another market study bodes well for mass, too. Mintel reported last week that cheap-chic beauty products are the top trend in a tough economy. The research group calls it Econo-chic. Mintel suggests manufacturers launching new products designed to help stylish, budget-conscious women will do well. “Cosmetics companies are quickly responding to the needs of the Recessionista,” said Taya Tomasello, senior analyst for Mintel Beauty Innovation. “Effective and affordable multiuse products and products offering convenience allow women to continue using their favorite brands, but at a reduced costs.”

The biggest trends, as Mintel sees it, include multiuse and convenience. Drugstores and discount retailers should fare well in this challenging market, according to Mintel.

Another Mintel report debunked the Lipstick Effect and said that’s been placed by “Austerity Chic,” and that shoppers are no longer indulging in a lipstick as a pick-me-up purchase. Just 3 percent of those surveyed said they purchased a lipstick to make themselves feel better.

Mass marketers…gear up for these austerity chic shoppers… the research says they are out there!

NEXT: People, Place and Things >>

People, Place and Things

A few words with executives at the National Association of Chain Drug Stores’ Annual meeting. When Mike Duke, president and chief executive officer of Wal-Mart, recently toured a store with “Today Show” host Matt Lauer, he said he’ll know we are starting to exit the recession when people start buying better cuts of meat. We polled attendees at NACDS about what drugstore category will signal better days are ahead.

Wendy Liebmann, WSL Strategic Retail: Things will get better when we see retailers making sure stores are in stock.

Jack McAuliffe, Beauty Handbook: I think when you see people return to the dry cleaners things are improving. Also in drugstores, skin care.

Ingrid Jackel of Physicians Formula: This isn’t as much one that will increase, but I think when you see sales of alcohol decrease things are getting better.

What’s In Store:

Revlon Names New President: Alan Ennis has been named president and chief executive officer, succeeding David Kennedy who will become vice chairman.

NACDS Marketplace: Plans are under way for the National Association of Chain Drug Stores’ Marketplace Meeting which will kick off June 28 in Boston.