The drugstore is now the cool place to shop for skin care.
Millennials, unimpressed by miracle creams, are turning to the mass market for skin care, where they’re finding prestige-inspired products on the cheap. Mass power players are innovating faster than ever, unleashing sophisticated items as soon as they start gaining steam in the high-end market. Meanwhile, mass retailers from Target to CVS are on the warpath, reworking their beauty assortments to reflect the deluge of today’s skin-care trends.
“The momentum around mass right now, especially in facial, is huge,” said Karen Grant, global beauty industry analyst at The NPD Group. By the end of last year, NPD was tracking mass facial skin-care sales as being up 4 percent from 2015, while prestige sales remained flat.
It’s the Millennial attitude toward skin care, which skews more toward basic care and prevention rather than wrinkle correction, that is driving growth in the mass market.
“Consumers are looking for quick-fix solutions and using makeup to offset [skin issues], so skin care is shifting into more primary care,” said Grant.
Attuned to the hazards of sun, pollution and stress, young consumers seek straightforward, natural-sounding skin-care products that are gentle, efficacious and fast-acting, and growth is being driven by such unsexy categories as cleansers and moisturizers.
“[Young consumers] are shifting to more affordable brands,” agreed Cécile Shrimpton, senior marketing and retail consultant at Wagram Consulting. “It’s very much back to basics — they know if they protect their skin [with SPF] and hydrate really well, that’s what counts.”
Beauty’s most recent big buy signifies this shift toward simplicity — in January, L’Oréal’s Active Cosmetics Division announced it would acquire CeraVe, AcneFree and Ambi from Valeant Pharmaceuticals for $1.3 billion.
Although sales are being driven by basic categories, don’t think Millennials will settle for any old boring cleanser to wash their makeup off with — no-rinse formulas such as micellar waters are popular, along with cleansing oils and solid formulas. Even Johnson & Johnson-owned Clean & Clear has introduced a bubble-foaming face wash, based on the Korean innovation, for early this year. “It’s not a commodity-like service product like toothpaste anymore,” said Shrimpton, of cleansers and moisturizing products. “[Millennials] are all about having fun and having a cool moment applying skin care with cool formulas.”
Over the past year and continuing into the January launch season, the major mass skin-care brands have focused on introducing basic items like cleansers and moisturizers with sophisticated upgrades that mirror prestige formats and ingredient trends.
Active and natural ingredients are wins with Millennials, who are looking to cultivate healthy, less stressful lifestyles for themselves — which includes cutting down on laborious skin-care routines. “It’s got to be a quick-fix — instant results, no fuss,” said Shrimpton, who noted that young consumers are especially concerned with purging the body of toxins, both real and perceived. “Detox is the new antiaging, let’s face it.”
To that end, Garnier is introducing its Moisture Bomb collection, a series of hydrating items, from a sheet mask to gel-cream moisturizer — formulated with amla and pomegranate extracts known for their antioxidant benefits. Neutrogena is turning its hit Hydro-Boost Water Gel into a full-fledged franchise, complete with a hyaluronic acid-infused gel-oil cleanser and serum. L’Oréal Paris is utilizing hyaluronic acid as well, combining it with aloe water to formulate the moisturizers in its new HydraGenius range.
“Millennials in particular are seeking to add benefits and keep their products natural and ingredient-driven,” said Kathy O’Brien, vice president of skin and marketing services at Unilever.
The company is certainly getting in on the mass attack. In 2015, it launched a makeup-removing micellar water — a French pharmacy staple, made of micelles (cleansing oil molecules) — under Simple, and this year St. Ives is launching its Facial Oil Scrub in apricot and coconut varieties, which is meant to be a more of-the-moment take on its long-standing exfoliating scrub. Unilever has also made headway with Pond’s, introducing last year its Luminous Clean collection, designed to brighten and hydrate while cleansing, and this summer will unleash a customizable boosting serum under Simple. O’Brien noted she sees opportunity to appeal to the younger set with Dove’s classic beauty bar, which she said offers multiple benefits, including cleansing and hydrating.
It is not just products that are becoming more premium, but the retail landscape, too. Chains like the Walgreens Boots Alliance and CVS are making a concentrated effort to usher in more niche, specialized offerings that reflect the many skin-care trends permeating the prestige market.
Target Corp. is another prime example. The chain has been at the forefront of natural skin care and the K-beauty explosion. Target installed the Amore Pacific-owned Laneige in 2014 and the success of that brand gave the green light to install more Korean powerhouse names, the most recent example being a slew of items selected by Peach & Lily founder Alicia Yoon.
Dawn Block, senior vice president of beauty and essentials for Target, said this is part of an ongoing effort to provide skin-care products that are in demand by the chain’s shopper. “Bringing this curated assortment to Target provides us with a chance to test new offerings and expand on our positioning as a go-to, credible source for beauty must-haves, while giving our guests added convenience.”
While Target has historically sat on the higher end of the mass market, most retailers in the segment are feeling the pressure to amp up the quality of their beauty offerings — even Wal-Mart Stores Inc. launched a line of sheet masks, called Masqueology, last year, and will soon launch Le Petit Marseillais, a line of French body washes.
Mass retailers are tapping brands like Nip and Fab to add a cool factor to their assortments. Nip and Fab is a diffusion line from the founder of Rodial, an edgy prestige skin-care line known for infusing its products with exotic ingredients such as bee venom and dragon’s blood. The mass line has brought Rodial’s pricey offerings to an affordable level. For example, the Rodial Bee Venom Super Serum is priced at $200, but Nip + Fab’s Bee Sting Fix Repairing Shot, incorporates a similar ingredient and retails for $24.99.
“The buyers in the U.S. want to invest in up and coming brands — in the last few years there’s been a lot of exciting brands entering the mass market, compared with what there used to be 10 to 15 years ago,” said Maria Hatzistefanis, founder of Rodial and Nip and Fab. “They realize if they keep selling the same old, same old, L’Oréal and all those brands, consumers aren’t interested. They want something cool that has social media buzz.” Nip and Fab certainly has it — the brand has partnered with Kylie Jenner.
“The mass retailers realize what’s winning is these small niche brands with expert viewpoints,” agreed Michel Dallemagne, chief executive officer of Lumene, a Finnish skin-care brand that is in the midst of a major overhaul, complete with updated packaging, formulations and marketing tapping into the brand’s wellness-oriented Nordic heritage. Industry sources estimate Lumene’s valuation could quadruple over the next two to the three years, after increasing shelf space at Target and Ulta Beauty, and expanding internationally.
And the French pharmacy brands such as Pierre Fabre’s Avéne and L’Oréal’s La Roche-Posay and Vichy are increasingly competitive and trend-driven as well. Vichy just launched a range of clay masks, and La Roche-Posay is rolling out probiotic-based skin care in the U.S. market. Though the lines have been in the mass market on the coasts for some time, it is only a matter of time before they permeate the flyover states. “We’ll see more of a national distribution strategy behind these brands, as awareness starts to increase and retailers have begun to realize category growth on the coasts,” said Martin Okner, cofounder and managing director at SHM Corporate Navigators. “With the point we’re at now with social-influencer marketing, we’re going to see more mid-America interest in these brands [very soon].”
Of course, the mass versus prestige war also boils down to something very simple — cost. With prestigelike innovations hitting the mass market at all angles, prestige skin care will have to step it up to retain customer attention to the higher end of the market. “The challenge for premium brands is to prove that it’s really worth spending more to achieve benefits that you can’t get from mass,” said Margie Nanninga, beauty analyst at Mintel. “I don’t know if that’s possible at this point because mass has become so [advanced].”