According to The NPD Group Inc., the U.S. prestige beauty industry reached $11.2 billion and grew 3 percent in dollar sales in 2014, compared with 2013.
Color cosmetics experienced the healthiest gain, by 6 percent, while fragrance dollars grew by 2 percent and skin care increased by 1 percent. The lip segment was key to makeup’s growth, driven by lip color, said Karen Grant, global beauty industry analyst, The NPD Group. Of the top 100 new shades on counter in 2014, pink surpassed red as the leading color, bringing in 23 percent more dollars. Prestige makeup, skin care and fragrance in the U.S. all experienced 2 to 4 percent growth in average price. Sets and kits drove the growth for skin care, with antiaging sets serving as the catalyst, said Grant, adding that new scents experienced the largest increase for women’s fragrance, while it was gift sets for men.
“The beauty industry had a solid annual performance in a somewhat difficult retail environment, but there’s still plenty of room for improvement and development,” said Grant. “We saw that fewer consumers, especially beauty shoppers, cut spending in 2014. At the same time, 2014 reported the fewest number shopping for beauty in six years. This tells me that beauty shoppers are happy, but some may be seeking happiness elsewhere. This ‘elsewhere’ is in other products and services, as well as experiences; consumers today are not just pursuing ‘products for me,’ so much as they are seeking ‘experiences for us.’ The challenge for the beauty industry, therefore, doesn’t lie solely in the products, but in fulfilling this sense of experience, and having both play together in harmony.”
The prestige market (defined as products sold in U.S. department stores) outpaced the mass market (defined as products sold in food, drug and mass-market doors). The mass market remained flat in 2014, with mass skin care growing by 2 percent and mass fragrance and color cosmetics declining by 4 percent and 1 percent, respectively. “Beauty is an industry where consumers are willing to spend, and where the majority of them — more than 80 percent of U.S. women alone — invest,” added Grant. “While there is brand loyalty, consumers at the same time are always on the hunt for products that will perform better, and are willing to add to their routine if a product proves worthwhile. The industry is at an advantage in the U.S., a crossroads, where world beauty comes together in one place, and the innovation and types of products that connect with consumers, and satisfy their needs and desires, show themselves in a natural light.”