BEAUTY CARE

NPD, IRI study: Channel switching could present opportunities for growth in mass-market beauty

BY Antoinette Alexander

PORT WASHINGTON, N.Y. Beauty shoppers are tightening the grip on their wallets as a result of the current economy, but they are switching channels in such key categories as facial skin care, which could spell opportunities in today’s challenging marketplace, according to findings by The NPD Group and Information Resources Inc.

This is the first year the two groups have partnered to develop a product, the Beauty Cross Channel Monitor, and it is the U.S. beauty industry’s first and only point-of-sale tracking product that looks at sales performance in department stores and food, drug and mass (excluding Walmart).

“For the first time we have the ability to take a broader view of the U.S. beauty industry,” stated Diane Nicholson, president of beauty at The NPD Group. “When looking across total channels — department stores and food, drug and mass channels, excluding Walmart — we can size the market at $19.1 billion, representing approximately 60% of the U.S. beauty industry.”

In looking at the data, The NPD Group and IRI found that while the beauty industry suffered the same fate as most industries and posted declines in 2008, there were some pockets of growth and opportunity driven by some channel shifting.

While department store sales of makeup declined in 2008 versus 2007, makeup posted a slight increase (1%) in the food, drug and mass channel.

Conversely, the hair care segment grew by 6% in department stores compared with a 4% decline in mass, where hair represents a larger portion of the overall business.

Skin care remained steady across all channels but a bright spot was facial skin care. This segment rose by 1% across all channels, driven by a more health performance in mass, with 2.1% growth in 2008.

“In this ever-changing and challenging environment, the ability to understand the market dynamics across channels is more crucial than ever,” stated John Deputato, SVP client solutions for IRI. “Our clients are very interested in how consumers are changing their shopping patterns.”

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SkinWear extends its U.S. launch

BY Allison Cerra

TORRANCE, Calif. SKWPartners announced Tuesday the extended launch of SkinWear.

SkinWear boasts itself as the only extended-protection, all-in-one hand cleanser, sanitizer and moisturizer which has been proven to kill germs for as long as eight hours with a single application. This non-alcohol-based product picks up where commonly available anti-bacterial soaps and “instant sanitizers” leave off by killing 99.9% of all germs that can make people sick, and continues to kill bacteria for up to eight hours, drastically decreasing the potential spread of germs and contamination.

“SkinWear is a radical departure from hygiene products available to date,” said SKWPartners’ Tom Guzek. “Not only is SkinWear more thorough and cost-effective than current anti-bacterial soaps and alcohol-based hand sanitizers, SkinWear’s eight hour extended efficacy actually continues to kill germs between washings, reducing the spread of germs.”

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Inter Parfums reports double-digit loss in Q1

BY Antoinette Alexander

NEW YORK Inter Parfums, which manufacturers and distributes licensed prestige perfumes, cosmetics and personal care products for specialty retailers, and supplies mass market fragrances, reported a double-digit drop in first-quarter sales and affirmed its 2009 guidance.

“As we previously indicated, year-over-year first quarter sales comparisons were impacted by several factors. The continued strength of the U.S. dollar relative to the euro, had the net effect of depressing 2009 first quarter sales by about 6% as compared to last year,” stated Jean Madar, chairman and CEO of Inter Parfums. “Additionally, last year?s first quarter included our largest ever global launch of our largest licensed brand, Burberry The Beat for women, pushing European-based sales up 46% as compared with the first quarter of 2007. With regard to U.S. operations, the comparable quarter sales decline also factors in an exceptionally strong first quarter in 2008, with sales up 31% from the first quarter of 2007. These factors combined with the impact of the global economic crisis on discretionary consumer spending produced the first quarter sales decline.”

Net sales for the first quarter were about $90.4 million, down 27% from $123.2 million in the year-ago period. As comparable foreign currency exchange rates, net sales were down 21%.

The company is expected to issue its full first quarter results on May 11, after the close of the market.

Assuming the dollar remains at current levels, the company continues to expect 2009 net sales of $390 million, with net income of roughly $21 million, or 70 cents per diluted share.

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