For the global beauty industry, 2013 was a year of highs and lows.

“The U.S. did very well,” said Karen Grant, vice president and senior global analyst of The NPD Group. “Most countries did well in beauty, except Europe is being challenged right now so that business is still down quite a bit. They’ve had declines across multiple categories, [and with] fragrance being a big part of their business [growth] is also dragging.”

According to NPD’s 2013 report card, presented at CEW’s “Hot off the Press Event” on Wednesday, the overall U.S. prestige beauty market grew 5 percent in dollar sales, as compared with the same period the prior year. Skin-care and makeup categories led, each increasing by 7 percent, while fragrance dollars remained flat, which Grant attributes to a decline in gift sets.

“In fragrance we are seeing a lot of growth in certain types of brands, what we call artisanal brands [referring to brands like Jo Malone, Creed and Bond No. 9], as well as designer brands [classic and couture],” she told WWD. “Overall in all markets the eau de parfum, the higher price point items, are growing across all countries and tend to be a driver of sales.”

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Looking to the global beauty market, 2013 was a mixed bag, with gains in the U.K. (up 6 percent) and Mexico (up 12 percent), while there were declines in France, Italy and Spain, each down 2 percent.

In France, for example, selective beauty sales dipped 1.5 percent in 2013 to 2.9 billion euros, or $3.85 billion at average exchange, according to the Fédération Française de la Parfumerie Sélective, which was citing figures from The NPD Group.

“In a context where consumption declined throughout the year, our market has resisted rather well,” said William G. Koeberlé, president of the FFPS.

French beauty chains, which generated 76 percent of selective beauty sales in the country, ended last year flat. Accounting for 9 percent of the sector’s revenues, department stores’ prestige beauty sales rose 0.5 percent, while independent perfumeries’ revenues declined 9.8 percent on-year.

By category, makeup sales dipped 0.7 percent, with lip products and gift sets helping buoy the category. Skin-care revenues declined 1.7 percent, with antiaging and moisturizing items registering the strongest business. Fragrance sales were also down 1.7 percent, in part due to a shift of consumer preference to smaller formats.

Koeberlé added that it’s key for the sector to improve the in-store experience for clients.

When it comes to U.S. mass-market sales, the channel increased slightly, with growth of 1 percent for total beauty in 2013 as compared with the same period the year before. Makeup led the upswing, clocking in at 2 percent growth, followed by skin care at 1 percent. Mass fragrance, however, took a dip of 6 percent as compared with 2012.

“While the mass market is positive, it was only up 1 percent, so their business is not as strong. Prestige is showing that it has the advantage right now,” said Grant, who attributed some of the decline in mass to the oversaturation of nail colors and slowing of the category. “The growth of primers continues. The growth of what we called the defined eye products [mascara, eyebrow, eyeliner] — which are all in opening price point areas — has been a continuing trend for more than four years, and that trend is also growing in Europe. The other trend that we saw was around bolder statements, not just eye but lip, lip is doing well with a lot of red. Nail has slowed a bit, and that’s due to some saturation with a lot of different shades.”

In terms of overall learnings from 2013 in the U.S., Grant said value continues to be important to the American consumer but that higher-tiered offerings are thriving across the board. In the total prestige fragrance category, which remained flat in the U.S., scents priced $100 and up increased 30 percent in dollars, and similarly, face makeup priced $60 and up grew 28 percent. Skin care also increased by 15 percent in dollar sales as compared with 2012.

“In the U.S. there’s been some shifting going on in terms of where the business is very strong,” said Grant, adding that the direct-to-consumer channel also helped drive beauty growth in 2013, with an increase of 19 percent. “Makeup and skin care are changing a little bit in how we are seeing [them]. It’s not just about antiaging. There’s a lot more products that are what we call primary care products. In makeup the complement to that is that we are seeing that people are using these products to affect a more perfected look.”

For fragrance, which Grant said is most reliant on the brick-and-mortar space, growth is still there, albeit slower that expected.

“Fragrance is a challenged category yet continuing to hold steady,” said Grant. “Fragrance actually gained about $9 million dollars last year, so they didn’t not grow, they just didn’t grow as fast as we’d like. And where it’s not growing, it may be because people are buying less gift sets, which is not a bad thing.”

All in all, Grant sees the news as good for the overall U.S. beauty industry, especially in the luxury sector.

“One of the key things is that prestige beauty is continuing and doing well. A lot of industries are not doing as well, and I think it’s that a lot of consumers are continuing to see the beauty industry as an area where they can truly treat themselves,” said Grant, pointing to do-it-all quick fixes like alphabet creams and products that offer basic hydration as category leaders.

“There are a lot of positive things going on. Of course there’s a lot of challenges and it definitely not a time we can think things are easy. It’s getting more challenging to keep things fresh and to keep the consumer engaged, but we do have a highly motivated consumer. More consumers seem to be considering the prestige channel, and we have great products and brands to deliver on that, as well as the retail environment being upgraded to really service the clients even better.”

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