Lip-Smacking Sales From Lip Products

After years of putting effort into eyes, American women are once again puckering up to lip color. After all, how many more years can the smoky eye look set the trend line? The trend is starting in the prestige market and will likely filter to mass in the next few months. The halt in lip color sales was particularly painful to a category that had always relied on the lipstick index, which showed that no matter what, lipstick sales rarely declined since women always had a few bucks for a new lipstick to update their look. In the last year, that index did not hold true.

However, new research from The NPD Group reveals the total prestige lip segment grew by 7 percent to $185.2 million in U.S. department stores and 4 percent in units to 9.8 million for the year-to-date period of January through April 2011.

What’s interesting is that lip color paced the gains with an increase of 11 percent in dollars to $92.1 million, compared with January through April 2010. In the past few years, the gaining segments in lip were treatments. It has been a slow revival and end of year 2010 results showed the first unit increase in lip since 2002.

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“What is particularly noteworthy of the trend in lip color is that we are seeing these significant increases in sales at a time when overall usage of lip color appeared to be dropping off. Coming out of the recession, it seems that the consumers thirst for color and play was reawakened,” said Karen Grant, vice president and senior global industry analyst, the NPD Group. “In 2010, we saw the preference for rich as well as retro colors and in 2011, we are seeing new neutrals come to the fore.” She added lip color appears to be getting its groove back.

According to NPD, MAC is the best-selling brand, followed by Lancôme L’Absolu Rouge, Clinique Long Last Soft Shine, Lauder Pure Color Lipstick and Chanel Rouge Coco Shine.

In mass stores, the lip color category was down in drug, food and mass units — excluding Wal-Mart — by 0.4 percent for the 52-week period, ended March 20, 2011, according to the Symphony/IRI Group. Drugstores, however, showed more than a 7 percent decline in that period as discount and food stores made greater inroads in lip. Drugstore chains have shifted footage allocations from lip and into the nail category with the expansion of OPI and Essie into mass. Now some footage might have to be reallocated as lip surges back. The top sellers in lip color at mass are Cover Girl Outlast, then Revlon Super Lustrous, followed by L’Oréal Colour Riche and Cover Girl Continuous.

Fashion and beauty trends are obviously cyclic and the return to lip is just the final loop back as women have gone to eyes, to nails and are now focusing again on lips. Lip isn’t the only good news coming out of stores. The NPD Group and Symphony/IRI Group have announced the first quarter 2011 results of their partnered product, the Beauty Cross Channel Monitor, the beauty industry’s only point-of-sale tracking product that looks at sales performance in department stores (prestige) and the food, drug and mass market, excluding Wal-Mart.

Total U.S. beauty sales in the prestige and food-drug-mass channels are trending similarly in first quarter 2011, up 5 percent and 4 percent, respectively. Makeup sales, while also trending similarly, tell a slightly different story with the food/drug/mass channel faring better than prestige due in part to the double-digit sales gains in the $127 million nail segment.

“Despite the current economic situation, the beauty industry continues to trend upward showing growth for the fourth consecutive quarter in both the food-drug-mass and prestige channels,” said Diane Nicholson, president, beauty, The NPD Group. “After a positive, yet cautious 2010, it’s encouraging to see consumers continue to embrace newness and innovation in the beauty space.”

According to NPD’s Economy Tracker, 35 percent of consumers planned to maintain or increase their spending in cosmetics and fragrances for first quarter 2011, up 2 percentage points from last year. This is despite the fact that consumers are also dedicating a larger percentage of what’s in their wallets to gas and groceries, as prices of these categories rise.

People, Places and Things

A few words with Adam Berkowitz, founder of Stockn’Go, an online beauty retailer that has is growing three times its projected rate.

WWDBeautyNews: Online retailing isn’t new. What is different now and why are more people buying online?
A.B.:
People were hesitant before for security reasons, they didn’t know the brands and all kinds of reasons. Now, with gas so expensive and time so valuable, they trust online resources. We even think we can sell fragrances people know and also color. Our bestsellers now are products women can get in all markets.

WWDBeautyNews: Do you only sell direct to consumers?
A.B.:
No, we also sell to independent retailers such as drugstores and we do a big business with case loads to sororities and fraternities. Our top markets right now are cities where it is hard to get to reasonable stores [in terms of price] and lug the products upstairs. Our difference from competitors is definitely our prices.

What’s In Store

NACDS Offers App for Marketplace: The National Association of Chain Drug Stores has launched its 2011 Marketplace mobile Web-based application, or “app.” This mobile app is designed to enhance attendees’ efficiency and experience at the NACDS Marketplace Conference, which runs from June 25 to 28 in Boston.

The first NACDS mobile app was introduced for the NACDS 2010 Annual Meeting and has become an important resource for applying today’s technology to NACDS’ proven meeting format. In addition, the NACDS mobile Web site — m.NACDS.org — is fully updated with information about the upcoming conference and all 2011 NACDS events.

The NACDS mobile app is compatible with most Smartphone platforms, including the iPhone, Droid and BlackBerry devices and can be downloaded for free on m.NACDS.org or from NACDS’ main Web site atnacds.org.

Walgreens Adds New Skin Care

Skin by Monica, an all natural line of skin and hair care products for women, men and babies, is expanding its distribution and will be available in select Walgreens locations in August. “We are pleased to bring another innovative beauty brand to our eco-conscious, ingredient-savvy customer,” stated Shannon Petree, Walgreens divisional vice president and general merchandising manager for beauty. “Natural skin care is not a passing trend. Today’s beauty shopper wants to feel good about the products she uses while receiving the results she expects. Customers will be pleased to find this hot new brand that has beauty blogs buzzing at their neighborhood Walgreens store.” The Skin by Monica collection offers more than 52 skin and hair care products for women, men and babies, which are all free of parabens, urea, alcohol, petroleum and other harmful chemicals. The products are organic, made with vitamins and minerals from the earth, packaged in eco-friendly materials and never tested on animals.

 

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