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Piper Jaffray Study: Mass Beauty Market Faces Challenges in Attracting Teens

The study, “Taking Stock With Teens,” highlights spending trends and brand preferences of 9,400 U.S. teens.

A recent Piper Jaffray report further illustrates the challenges mass-market brands and retailers face in attracting teen consumers.

The study, “Taking Stock With Teens,” highlights spending trends and brand preferences of 9,400 U.S. teens. Here are the hard facts: Teens are turning their backs on megabeauty brands. They also are disenchanted with the mass-market shopping experience, said Stephanie Wissink, a senior research analyst at Piper Jaffray.

CoverGirl, the once go-to brand for young women, has been supplanted by MAC Cosmetics in high-income and average income households, the report found. The Piper Jaffrey research pinpoints the shift from CoverGirl on teen girl shopping lists, dropping from the number-two rank in the spring 2010 study to fourth place in the fall 2015 poll. Research also showed that Maybelline is the mass brand that’s gaining momentum.

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“Maybelline has taken risks in the market,” said Wissink in regard to the brand’s nod from teens. “Highly innovative brands are best positioned to retain teen customers.”

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Too many mass brands and big-box retailers are playing it  “safe,” she added. “Shoppers are spending more time in specialty. Millennials don’t want predictable.” Compounding the issue, she said, is large companies get “lazy and reject ideas that don’t meet minimum performance requirements,” which has stifled creativity. “An ankle-biter [niche brand] comes along and then a collective five or six ankle-biters and they take away big-brand share and growth,” she said. One example of a fledgling brand growing in teen baskets is E.l.f., which for the first time appeared in the top 10 preferred cosmetic brand list (for average income households).

She suggested mass merchants take a cue from specialty stores and find ways to display beauty items outside their outer package to elevate the experience. The family members of high-income households rank Sephora as the preferred beauty destination, according to the fall survey. Ulta nabbed the number-two spot. What’s notable is the rankings have changed since spring 2015 when Target was the number-one choice. Piper Jaffray’s research pinpoints the channel reversal where specialty outpaced legacy retailers as the time frame between spring 2015 and fall 2015. At that juncture, specialty overtook mass to account for 61 percent of mentions as the preferred shopping outlet versus 31 percent for traditional merchants. Just 18 months ago, mass, department and drugstores held 54 percent of the mentions versus specialty at 34 percent.

Teens are an important spending group to cultivate, she said, since they have money to spend and influence other market segments.