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Shoppers Play The Field

While searching for that new niche item or a good deal, American beauty shoppers have trampled the concept of loyalty.

At least that's according to studies by the NPD Group, one of which was recently commissioned by Women's Wear Daily (WWD),...

While searching for that new niche item or a good deal, American beauty shoppers have trampled the concept of loyalty.

At least that’s according to studies by the NPD Group, one of which was recently commissioned by Women’s Wear Daily (WWD), the sister publication of WWD International Beauty Report. For it, 2,067 women were asked about their beauty buying habits.

Its results show that women, particularly the young, shop for beauty more these days, but they are no longer married to a department store or any other type of retailer. Increasingly, consumers are playing the field by dabbling in cosmetics specialty chains, such as Sephora or Victoria’s Secret, and electronic media, like the Internet or QVC on TV.

“People are looking for something that’s different,” said Wendy Liebmann, industry analyst and president of WSL Strategic Retail. She added if they find that item, they will pay for it. “I don’t even know how to define prestige anymore.”

“Consumers are looking for choice and education,” said industry veteran Jane Terker, adding once consumers find that level of trust and comfort, they’ll keep returning. Today’s shoppers look for a no-pressure environment offering a legitimate chance of finding solutions, added Terker, who is chief marketing officer of Klinger Advanced Aesthetics.

An earlier NPD study, which drew responses from 6,863 women in May 2005, showed two out three American women who shop for beauty in department stores also shop in specialty stores. Of the same department store customers, 41% also shop in spas and salons. Another 30% shop online.

But it doesn’t work the other way. Of the specialty store clientele, less than 30% shop in department stores. Also, another 30% shop in spas and salons and 20% on the Internet, which is a magnet for the most prolific buyers.

That earlier study singled out the Internet as the channel drawing the highest proportion of women—or 38%—who have spent more on beauty products in the past year. The Internet also drew the highest number, 21%, who intend to spend more in the future.

This theme was reinforced by the recent NPD study for WWD. “Despite increased pressure on discretionary income, or perhaps because of it, consumers are shopping and they are buying beauty products,” said Karen Grant, director and senior industry analyst for beauty at NPD. Referring to that study, Grant noted women aged 18 to over 55 purchase beauty products at least once a year and they are buying more frequently than five years ago—across all categories.

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“However, their preferences have changed,” continued Grant. “Wanting greater convenience, unique products and environments that let them experiment and ‘play,’ the Internet and specialty stores are the fastest-growing channels for beauty. Not tied to any one channel, a majority of department store shoppers are also cross-shopping in specialty stores, and in the past 12 months, more than half of all 18- to-24-year-olds across the U.S. shopped in specialty stores for beauty.”

In terms of momentum, the specialty chains and Internet have a small portion of shoppers in the WWD survey but the most dramatic growth in attracting customers. In makeup, for instance, only one in 10 women list specialty stores as “usually shopped,” but more than 60% of these women say they are buying from these retailers more often that they were five years ago. The Internet shows a similar story.

Age dynamics are revealing. Analysts note younger consumers look for ideas and directions. According to the survey, these consumers are constantly on the lookout for advice, in-store or through an ad.

The earlier NPD study indicated that 40% of women aged 18-to-64 said they had shopped in a specialty store in the previous year. A total of 55% of all 18-to-24-year-olds made the same statement. When examining the shopping constituencies of specific retail chains, it was revealed that 68% of Sephora’s female shoppers were 18 to 34, with 27% between 18 and 24. At Victoria’s Secret, 59% of the chain’s female beauty shoppers are between 18 and 34, with 32% being 18-to-24. For department stores, less than half—or 42%—are 18-to-34.

Liebmann sees a seismic shift in progress with consumers gravitating toward either “supersized” outfits like Wal-Mart or highly specialized boutiques like the Apple stores. “Department stores fall through the cracks,” she declared. “They do less and less specializing, lack service and can be intimidating. Value, ease-of-shopping experience, emotion and an edited mix are the factors driving the shift.”

This article appeared in WWD Beauty Report International, a special publication to WWD.