Cosmetics see shift in market performance
For the past 52 weeks, cosmetics were a $7.1 billion industry, and the eye, facial and lip subcategories accounted for $4.7 billion of those sales. Within the drug store channel alone, cosmetics experienced $2.7 billion in sales, and the eye, face and lip subcategories saw $1.8 billion. DSN has partnered with Competitive Promotion Report (CPR) and IRI to create a series of exclusive reports, and this article examines the market performance of top brands within those subcategories for the past 27 months. The top four brands overall in the cosmetics category were L’Oréal, Maybelline, CoverGirl and Revlon.
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With $759 million in sales for the drug channel, the eye category experienced the highest dollar sales in cosmetics during the last 27 months. The top two subcategories for sales were mascara and eye liner with $330 million and $245 million, respectively. For the mascara market, Revlon was not a significant player, though Almay performed much better. However, eye liner saw high amounts of sales for all of the four top brands. For eye liners, the Revlon ColorStay and CoverGirl Perfect Point brands decreased the average percentage of discount for the past year compared with the previous year, while L’Oréal Infallible and Maybelline Unstoppable increased the average percentage of discount. CoverGirl Perfect Point Eye Liner remained the most discounted brand of the four, and Revlon ColorStay Eye Liner had the highest share of the eye liner market.
In the cosmetics facial category, the foundations subcategory experienced the highest dollar sales ($362 million) for the past 27 months. In this category, the retail margin percentages remained fairly constant for the past two years, with CoverGirl TruBlend seeing the highest change with a nearly 6% increase. Maybelline Dream Liquid consistently saw the highest retail margin percentages for both years, and L’Oréal True Match had the highest share of the foundation market.
With $245 million, lipsticks had the highest dollar sales by far in the cosmetic lip category. Despite the fact that Revlon’s Super Lustrous and Maybelline’s Color Sensational lipsticks had very similar retail and list prices, Revlon maintained the highest average share of the lipstick market. Maybelline did have a high average retail margin percentage of 45.9% for the two-year period, while Revlon saw a much lower, 35.3%, average retail margin.
Winning over the Hispanic beauty shopper
When it comes to beauty, you can’t win without the Hispanic shopper.
In sheer numbers, Hispanics will experience the most growth among multicultural consumers, growing from 17% of the total population in 2013 to 29% by 2060. According to census projections, by 2020 Hispanics will account for more than half of all U.S. population growth and nearly 85% by 2050.
But it isn’t simply the sheer growth of the Hispanic population that makes these consumers a must-have in beauty. It goes deeper — much deeper.
To take a closer look at this critical beauty shopper and help uncover the growth opportunities that beauty brands are not adequately courting, Nielsen recently released its “Beauty Care and Hispanics” report.
The Hispanic market posted more growth across all beauty segments than did the general population. While sales coming from non-Hispanics are declining in cosmetics, hair care accessories, personal care appliances and shaving needs, all of those categories are actually growing among Hispanics. Cosmetics, for example, were down 1.2% in 2014 from 2013 among non-Hispanics, but were up 7.4% among Hispanics during that same time frame, according to Nielsen. In fact, half of the top 20 categories where Hispanics over-index — or spend more than the general population — are in the health and beauty segment.
“You can’t win without Hispanic consumers,” said Monica Gil, SVP, GM, multicultural growth and strategy at Nielsen. “Beauty is a mega category with moderate growth. The Hispanic beauty consumer opportunity has not been fully realized by retailers, manufacturers and marketers.”
According to Gil, the factors driving growth among Hispanic beauty shoppers include:
- Cultural factors about outside beauty being a great equalizer among people and a reflection of inner beauty;
- Hispanics have larger households with more children (also more multigenerational households) than the general population, so they spend more and also share and explore more products;
- Improving incomes;
- 60% of Hispanic women in the United States are younger than the age of 35 years, which means they are in acquisition mode for an array of products and services; and
- 64% of the total Hispanic population were U.S. born and more likely to be bilingual and receive messages for products in two languages instead of one.
When looking to reach these shoppers, Gil suggested that more can be done with social media and online in terms of advertising as Hispanic consumers tend to skew younger and be more socially connected than the general population. And when Hispanic women are online, their circle of influence is other Latinas who are similar to them; they love to receive information for Latinas, by Latinas.
It is essential, however, not to treat Hispanic consumers as one monolithic group.
“What doesn’t work as well is taking a mainstream commercial and just translating it into Spanish without also reviewing the content, to use Hispanic talent and to ensure that it resonates with Hispanic consumers,” said Gil. “If growth is being led by Hispanic consumers, company’s marketing plans should reflect that and lead with Hispanic insights on the front end instead of an afterthought. Also, it is important for companies to embrace the cultural and linguistic dexterity, where Hispanics are speaking two languages, three if you count Spanglish.”