Blame it on the Internet. When it comes to purchasing, Millennial women rule the $13 billion cosmetics market.
A study released by the TABS Group last week revealed that Millennial women (ages 18-34) are the heaviest buyers of products in the cosmetics market, and are twice as likely than older women to be heavy buyers. A heavy buyer constitutes a shopper who purchases more than 10 types of products a year, and Millennials account for 47 percent of that segment.
“Unlike the majority of consumer packaged goods, where women 35 to 54 years old are the core target market, Millennials really do matter in cosmetics,” said Kurt Jetta, chief executive officer and founder of the TABS Group. “Their habits are transforming the industry in the areas of brand preferences, outlet preferences and methods for gathering information.”
With Millennials as the heavy buyers, it comes as no surprise that the proliferation of blogging, YouTube reviews, and social media has had a significant impact on communication with consumers. Twenty-nine percent of heavy cosmetics buyers reported that blog reviews are important factors in determining which products to actually purchase, and 28 deemed YouTube of equal importance.
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When it comes to brands, Maybelline, Cover Girl, Revlon and L’Oréal still reign supreme in terms of customer awareness, but the younger-skewing MAC and Urban Decay are quickly gaining traction, reporting increased awareness, penetration and favorability on levels close to Estée Lauder and Clinique.
Though Wal-Mart and Target are the most popular outlets for cosmetics buyers overall, the fastest-growing retail channel is the specialty beauty outlet, which includes Ulta Beauty and Sephora. Specialty beauty stores grew 19 percent in regular-buyer purchases from 2014, and Ulta Beauty saw a 41 percent increase in buyer penetration and regular-buyer purchases. Sephora also saw major sales increases, with a 25 percent increase in buyer penetration and 32 percent increase in regular-buyer purchases year-over-year.
Because of higher transaction sizes, specialty beauty outlets account for 50 percent of all purchase dollars in the cosmetics market.
“The flat trends in total purchase occasions are consistent with the overall malaise in our industry,” said Jetta. “What is quite meaningful is the dramatic shift that heavy-category buyers are having towards purchasing more expensive products and their move to other channel options. This shift has delivered strong gains in retail dollars, overall.”