Things are not looking up for mass beauty.
Sales in mass market channels continue to decline — a trend that has been consistent for at least a year. The lag, which has most acutely been seen in makeup, is expected to continue through the back half of the year and into 2019.
Overall, mass beauty sales are down 1.1 percent year-over-year, and tracking flat in the last four weeks ending Aug. 11, according to the latest data from Nielsen. Cosmetics sales are flat year-on-year, and decelerated to a decrease of 0.7 percent in the last four weeks. IRI data from the last 52 weeks ending Aug. 12 shows that every key category within color cosmetics is experiencing losses. Foundation is down 3.3 percent, powder is down 5.5 percent, lipstick down 1 percent, bronzer down 11.6 percent, mascara down 0.6 percent and eye shadow down 8.9 percent. There are some significant gains in a few highly trend-related categories: The body accessory category, which includes face mists and setting sprays, is up 25 percent. Eyebrow makeup is still hot, up 17.2 percent. Lip treatment sales, which include care-centric oils, masks and balms, are trending up at 35 percent.
As most category sales keep on lagging, industry experts and analysts are beginning to attribute the continued slowdown to a lack of innovation coming from mass beauty brands, combined with a sluggish retail environment that is losing beauty shoppers — particularly younger consumers — to online and specialty stores.
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Online and specialty channels are untracked in widely used mass beauty data, making the category sales increasingly complex to track. But as brand sales languish, and major revamp efforts on key legacy brands fail to result in improved sales data, experts agree that it is not just the drugstore shopping experience that is to blame for mass beauty’s slowdown.
Legacy brands are also turning outside of the U.S. mass landscape looking for growth. Camillo Pane, chief executive officer of Coty Inc., the owner of Cover Girl, Rimmel and other mass brands, recently said the business was looking for growth through e-commerce channels and in emerging markets to combat shelf space losses from 2016 and 2017.
Cover Girl, which began rolling out a completely revamped line of trend-driven products, and a buzzy 40-shade TruBlend Matte Made Foundation range, is down 7.4 percent, according to Nielsen data tracking the four weeks ending Aug 11., up from 9.1 percent year-on-year. Revlon, which also introduced repositioned branding and products this year, is down 8.8 percent in the last four weeks, down from -6 percent year-on-year. Rimmel and Almay have suffered more — each are down 13.9 percent and 15 percent, respectively. Even E.l.f., a brand that has gained significant shelf space in drugstores this year for its trend-oriented and value-priced products, is tracking closer to the legacy brands, down 8.8 percent in the last four weeks versus 1.6 percent growth year-on-year. The one consistent outlier is L’Oréal’s stable of brands. Maybelline is up 5.4 percent and NYX up 20.5 percent. L’Oréal Paris is tracking flat in the last four weeks, down from a 4.2 percent spike year-on-year.
So what gives?
“I’m seeing zero innovation [in the mass market],” said Jeanine Recckio, trend forecaster and owner of Mirror Mirror Imagination Group consultancy. “The big problem with the big beauty brands is they are not agile enough — they’re not moving fast enough.”
She cited Maybelline’s TattooStudio Brow Gel, a sculpting product meant to mimic the look of Instagram’s hottest before-and-after shot trend — professional microblading, where hairlike strokes are tattooed onto the brow — as an exception to this. The product has pulled in $12.6 million in sales this year, according to IRI.
Meanwhile brands such as Cover Girl, Revlon and Almay have spent the past year playing catch-up, filling in gaps in their product portfolios with trend items like “glotions,” jelly highlighters and scented makeup. They’ve touted speedier innovation pipelines, with products being ideated and brought to market in six months or less. The problem, experts say, is they’re simply delivering their own iterations of existing trend items, and not bringing real newness.
Jefferies analyst Stephanie Wissink put it this way: “She’s walking into mass [market retailers] and seeing what she already has.”
Looking ahead to holiday and early 2019, some analysts have expressed concern that a diminishing mass beauty category coinciding with a similar sales deceleration in prestige makeup could be a sign of young Millennial and Gen Z consumers cycling away from spending significantly in the category altogether, contributing even further to the mass beauty slowdown.
“I worry about a rotation of the wallet toward fashion,” Wissink said. “Look at Urban Outfitters, American Eagle — they’re starting to put up double-digit comps and it’s not driven by clearance, it’s driven by full-priced, whole margin goods. She’s going into those stores and seeing something she doesn’t have and is willing to spend there, [possibly] over beauty.”
Part of the problem, said Wissink, is that the makeup trend cycle overall has slowed.
In the height of makeup craziness, sales were driven by YouTube beauty trends — contouring, highlighting, strobing, baking, matte-finish foundations.
“I don’t see anything on the horizon in terms of breakthrough innovation, like a contouring or baking trend — those are the things that catalyze [sales],” Wissink said.
In the current trend void, new innovation from brands, particularly the big ones, could be key in driving a mass beauty turnaround, said Wendy Liebmann, founder and ceo of WSL strategic retail. She also shifted responsibility back to the retailers.
“Different, innovative product forms [matter], but so are the way stories are told and the way they are presented,” Liebmann said. “Shoppers are looking for exciting newness in both product [and experiences].”
Mass retailers from Walmart to Walgreens have spent the past year retooling in-store beauty experiences. The back half of 2018 will see this activity ramp up even further. Target is giving 1,000 of its beauty departments a premium revamp to better resemble the specialty shopping experience by year’s end. WWD reported last week that CVS is testing in four stores a radically new beauty format, complete with GlamSquad services and a special section off the wall to promote major legacy brands — the kind of space that a buzzy brand like NYX typically occupies in the drugstore.
This kind of synergy between brands and retailers, which hasn’t been seen so much in the mass and drug environment, will ultimately be key in for a mass beauty recovery, Liebmann said.
“Particularly in color cosmetics and makeup, [the experience] needs to resonate with the shopper. Retailers need to ask, ‘How do we tell the stories that people are craving in social media in the physical space?’” Liebmann said. “There’s opportunity beyond the product and brand. We bury it by presenting them in the same old ways.”