Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Slow growth expected for the future
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- Figure 1: Total US sales and fan chart forecast of beauty products, at current prices, 2011-22
- A whole new retail landscape
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- Figure 2: Retailers shopped, by age, May 2017
- Role of sales associate evolves
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- Figure 3: Attitudes regarding sales associates, by select generations, May 2017
- The opportunities
- It’s all about the experience
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- Figure 4: Method of shopping, May 2017
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- Figure 5: Interest in retail services, by select generations, May 2017
- Stay ahead of social media trends
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- Figure 6: Attitudes and behaviors toward social media, by select generations, May 2017
- Invest in e-commerce and technology
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- Figure 7: Attitudes and behaviors toward mobile technology, May 2017
- What it means
The Market – What You Need to Know
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- Continued slow growth expected
- Top three categories account for nearly half of sales
- Top categories mitigate losses from smaller categories
- Multicultural population benefits market
Market Size and Forecast
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- Consistent and steady sales pattern
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- Figure 8: Total US sales and fan chart forecast of beauty products, at current prices, 2011-22
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- Figure 9: Total US retail sales and forecast of beauty products, at current prices, 2012-22
Market Breakdown
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- Share leaders
- Color cosmetics sits firmly on top
- Fast-growing categories
- Body care and sun protection products gain on facial skincare
- Facing challenges
- Shaving and hair removal, fragrances, and nail care post sales declines
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- Figure 10: Total US retail sales of beauty products, by segment, at current prices, 2015 and 2017
- Seven out of 10 purchases occur outside of supermarkets or drug stores
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- Figure 11: Total US retail sales of beauty products, by channel, at current prices, 2012-17
Market Factors
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- More buyers in the market bodes well for sales growth
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- Figure 12: Female population by age, 2012-22
- Men also play a key role
- Huge multicultural influence
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- Figure 13: Population by race and Hispanic origin, 2012-22
- Bright economy should positively impact market
- Positive halo effect from investments in health and wellness
- Channel shifting is occurring as department stores struggle
- Direct sales remain small, but could be a threat in the future
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- Figure 14: Direct sales company shoppers – Any shopping, by age and gender, May 2017
Key Players – What You Need to Know
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- Specialty retailers feeling the love
- Department stores playing catch-up
- Why fix what’s working? More tech, tools, automation on the way
- Is Amazon ready to be a prestige beauty seller? Better yet, is prestige beauty ready for Amazon?
What’s Working?
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- Young women flocking to specialty beauty retailers
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- Figure 15: Specialty beauty retailers shopped, May 2017
- Ulta company overview
- Sephora company overview
- Customer profiles
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- Figure 16: Specialty beauty retailers shopped, by key demographics, May 2017
- Keys to success
What’s Struggling?
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- Department stores bet on beauty for turnaround efforts
What’s Next?
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- More tools and tech
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- Figure 17: FaceCake’s Custom Augmented Kinetic Experience tool, March 2016
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- Figure 18: WAH Nails store, UK, December 2016
- Figure 19: Burt’s Bees Wall of Kisses magic mirror, UK, March 2017
- New automated salespeople and data-based consultants
- K-beauty’s influence leading to more retail partnerships
- Anticipating Amazon’s next move in beauty
The Consumer – What You Need to Know
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- Young women buy the most items
- Mass merchandisers and drug stores remain top channels shopped
- In-store shopping preferred over online
- Store and brand familiarity leads to repeat shopping
- Social media is a playground for beauty enthusiasts
Who’s Buying?
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- Nearly a quarter of beauty purchasers are “heavy” buyers
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- Figure 20: Repertoire of beauty items purchased, May 2017
- Young parents are a key target group
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- Figure 21: Repertoire of 8+ beauty items purchased, by key demographics of heavy buyers, May 2017
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- Figure 22: Amount spent by category, January 2016-March 2017
- Figure 23: Mean spending by category, by key demographics, January 2016-March 2017
- In their words: interest in beauty products
Retailers Shopped
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- Specialty stores reign in traffic
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- Figure 24: Retailers shopped, May 2017
- Subscription services fail to scale audiences
- In their words: subscription services
- Men more likely to grab-and-go while women seek options
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- Figure 25: Retailers shopped, by gender, May 2017
- Retailers need to remain mindful of multicultural customer base
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- Figure 26: Retailers shopped, by race and Hispanic origin, May 2017
- Drug and mass channels make big changes to retain core customers
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- Figure 27: Retailers shopped, by age, May 2017
- In their words: where they shop and why
Method of Shopping
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- In-store shopping remains valuable
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- Figure 28: Method of shopping, May 2017
- In-store shopping incidence rises with age
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- Figure 29: Method of shopping, by generation, May 2017
- Online shopping rates expected to rise
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- Figure 30: Frequency of buying items online, May 2017
- What can retailers do to improve loyalty of online shoppers?
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- Figure 31: Attitudes toward online shopping, by select ages and household incomes, March 2017
- In their words: in-store influencers and online product preferences
Items Purchased
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- Grooming staples purchased by majority
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- Figure 32: Items purchased, March 2017
- Higher overlap between less-involved product categories and mass retailers
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- Figure 33: Items purchased, by retailers shopped, May 2017 – Part one
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- Figure 34: Items purchased, by retailers shopped, May 2017 – Part two
- Men remain important to the category
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- Figure 35: Items purchased, by gender, May 2017
Attitudes and Behaviors Toward Shopping
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- Robotic shopping behavior presents challenge for brands
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- Figure 36: Routines versus experimentation, by age, May 2017
- In their words: impulse versus planned purchases
- Understanding purchase drivers can help brands reach new audiences
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- Figure 37: Purchase drivers, by gender and age, May 2017
- In their words: importance of vegan, natural, and/or organic products
Attitudes and Behaviors Toward Mobile Technology
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- Mobile momentum continues
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- Figure 38: Attitudes and behaviors toward mobile technology, May 2017
- Four in 10 would rather talk to their mobile device than a salesperson
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- Figure 39: Attitudes and behaviors toward mobile technology, by gender, May 2017
- Many available mobile moments to connect with multicultural consumers
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- Figure 40: Select attitudes and behaviors toward mobile technology, by race and Hispanic origin, May 2017
- As category involvement increases, so does digital engagement
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- Figure 41: Select attitudes and behaviors toward mobile technology, by repertoire of beauty items purchased, May 2017
Attitudes and Behaviors Toward Social Media
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- Moving at the speed of social media
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- Figure 42: Attitudes and behaviors toward social media, May 2017
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- Figure 43: Attitudes and behaviors toward social media, by select generations, May 2017
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- Figure 44: Attitudes and behaviors toward social media, by gender and age, May 2017
- Personal recommendations hold weight among iGens and Millennials
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- Figure 45: Purchase drivers – Any rank (net), by all women and Millennial women, December 2016
- In their words: influencers
- Shoppable social media should bring more change
Social Media Influencers and Retailer Spotlight
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- Key influencers
- YouTube
- Lifestyle bloggers
- Celebrity makeup artists
- Brand initiatives
- Social media spotlight on specialty retailers
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- Figure 46: Social audience, July 2016-June 2017
- Figure 47: Posts per platform, July 2016-June 2017
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- Figure 48: Number of engagements, July 2016-June 2017
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- Figure 49: Ulta Beauty post on Pinterest, February 2017
- Figure 50: Ulta Beauty post on Pinterest, March 2017
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- Figure 51: Sephora post on Pinterest, June 2017
- Figure 52: Sephora post regarding Urban Decay news on Instagram, June 2017
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- Figure 53: Ulta Beauty post regarding Urban Decay news on Instagram, June 2017
Interest in Retail Services
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- Did someone say free samples and gifts?
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- Figure 54: Interest in retail services, May 2017
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- Figure 55: Interest in select retail services, by women 18-34, May 2017
- Experiences can draw in multicultural shoppers
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- Figure 56: Interest in select experiential services, by race and Hispanic origin, May 2017
- On-demand delivery not a key driver of store preference
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- Figure 57: Interest in on-demand delivery, by key demographics, May 2017
- TURF analysis provides quantitative support for maximizing reach
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- Figure 58: TURF analysis – Interest in retail services, May 2017
- In their words: “If I was in charge of my own beauty store … ”
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 59: Total US retail sales and forecast of beauty products, at inflation-adjusted prices, 2012-22
- Figure 60: Male population by age, 2012-22
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- Figure 62: Disposable Personal Income change from previous period, January 2007-May 2017
- Figure 63: Median household income, by race and Hispanic origin of householder, 2015
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Appendix – The Consumer
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- Figure 64: Amount spent on fragrances, January 2016-March 2017
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- Figure 65: Mean spending on fragrances, by key demographics, January 2016-March 2017
- Rival IQ methodology and supporting tables
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- Figure 66: Total social audience, by platform, by listed brands, July 2016-June 2017
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- Figure 67: Total posts, by platform, by listed brands, July 2016-June 2017
- TURF methodology and supporting tables
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- Figure 68: TURF analysis, table – Interest in retail services, May 2017
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