Table of Contents
Executive Summary
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- The issues
- Market is growing, but fragmented and highly competitive
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- Figure 1: Share of beauty market sales, by category, 2014
- Demographic trends offer mixed results for the market
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- Figure 2: Any beauty product usage, by age, January 2016
- Most women show moderate investment in the category
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- Figure 3: Time spent on beauty routine, skill level, experimentation, and brand type, January 2016
- The opportunities
- Enthusiasts comprise a dynamic consumer segment
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- Figure 4: Regular usage of beauty products, by all and Beauty Enthusiasts, January 2016
- Engage Millennials with technology and omnichannel approach
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- Figure 5: Sources of information, by generation, January 2016
- Positive attitudes toward shopping is widespread, but choice is overwhelming
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- Figure 6: Attitudes toward brands and shopping, any agree, by all and Beauty Enthusiasts, January 2016
- What it means
The Market – What You Need to Know
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- Nearly one in three women are Beauty Enthusiasts
- Beauty market continues to grow
- Plethora of products and brands are sold through wide range of channels
- Economic growth, population trends, and natural products drive market
Beauty Segments
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- Three segments: Beauty Enthusiast, Occasional Beauty, and Basic Beauty
- Beauty Enthusiast
- Occasional Beauty
- Basic Beauty
- Beauty Enthusiasts are the most avid, engaged consumers
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- Figure 7: Beauty Enthusiast – CHAID output, January 2016
- Occasional Beauty consumers make up largest segment
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- Figure 8: Occasional Beauty– CHAID output, January 2016
- Basic Beauty consumers are least invested in the category
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- Figure 9: Basic Beauty– CHAID output, January 2016
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- Figure 10: Beauty segments – CHAID output, January 2016
- CHAID analysis methodology
Market Perspective
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- Beauty and personal care market is growing, topping $46 billion in 2015
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- Figure 11: Total US retail sales and forecast of beauty products, at current prices, 2010-20
- In narrowly defined beauty market, color cosmetics is largest segment
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- Figure 12: Share of beauty market sales, by category, 2014
- Fashion trends and experimentation propel the largest segment: Color cosmetics
- Haircare benefits from high levels of penetration, regular use
- In facial skincare, sales growth of anti-aging products slows and evolves
- Nail color, currently off-trend, sees growth lag relative to the beauty market as a whole
- In fragmented retail landscape, drug stores and online retailers grow share
Market Factors
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- Improving economy underpins greater spending on beauty products
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- Figure 13: Regular use of beauty products, by household income, January 2016
- Growth in female population should propel market growth
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- Figure 14: Female population by age, 2010-20
- Hispanic population will be vital to market through 2020 and beyond
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- Figure 15: Population by race and Hispanic origin, 2010-20
Key Players – What You Need to Know
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- Multichannel marketing for Millennials and subscription services
- Department stores struggle to grow, some larger brands stagnate
- New ways to engage consumers with technology in-store and via apps
What’s Working?
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- Multichannel, trend-focused approach to engaging with Millennials
- Subscription services with samples and curated selections
- Gentle, organic, and natural beauty products
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- Figure 16: Select beauty products with mild formulations and natural claims, 2015
- Products, marketing, and spokespeople for diverse users
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- Figure 17: Revlon, Choose Love campaign, 2016
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- Figure 18: Sephora Milk Make-up tutorial, 2016
What’s Struggling?
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- Department stores struggle to maintain share
- Larger brands command major shares, but are stagnating
What’s Next?
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- Interactive and virtually integrated retail channels
- Mobile apps for information, customization, and experimentation
- Skincare products for Gen X and Boomer women
- Asian skincare trends offer new usage occasions, benefits
The Consumer – What You Need to Know
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- Beauty Enthusiasts show deep investment in the category
- Millennials are engaged, look online for inspiration and information
- Hispanic women, while often invested, demand high value propositions
- Customers weigh range of factors, seek information from other users
- Tutorials, mobile apps, and personal style focus may build market
Product Usage
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- Regular usage highest for haircare, skincare, and make-up
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- Figure 19: Any and regular usage of beauty products, January 2016
- Regular usage of products escalates among Beauty Enthusiasts
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- Figure 20: Regular usage of beauty products, by all and Beauty Enthusiasts, January 2016
- Millennials and Gen-Xers use wide range of products
- Baby Boomers use fewer products, show less category engagement
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- Figure 21: Regular usage of beauty products, by generation, January 2016
- Hispanics over index for usage of full range of beauty products
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- Figure 22: Regular usage of beauty products, by race and Hispanic origin, January 2016
Time Spent, Skills, Experimentation, and Brand Choice of Beauty Shoppers
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- The majority of women show moderate levels of engagement
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- Figure 23: Time spent on beauty routine, skill level, experimentation, and brand type, January 2016
- Time, skill, experimentation, and brand engagement shape segments
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- Figure 24: Time spent and skill level, by segment, January 2016
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- Figure 25: Experimentation and brand, by segment, January 2016
- Millennials spend more time, experiment more frequently
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- Figure 26: Time spent and skill level, by generation, January 2016
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- Figure 27: Experimentation and brand, by generation, January 2016
- Hispanic women strongly engaged, use mass brands
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- Figure 28: Time spent and skill level, by race and Hispanic origin, January 2016
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- Figure 29: Experimentation and brand, by race and Hispanic origin, January 2016
Purchase Influencers
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- Benefit, ease of use, and brand are top purchase influencers
- Many women rely on familiar products and brands
- Samples and promotions can bring in new users
- Packaging is a secondary factor, but can spark interest
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- Figure 30: Purchase influencers, any rank, by all and Beauty Enthusiasts, January 2016
- Beauty Enthusiasts seek out benefits
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- Figure 31: Purchase influencers, any rank, by segment, January 2016
- Product benefit is an especially important influencer for Boomers
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- Figure 32: Purchase influencers, any rank, by generation, January 2016
- For Hispanics, brand is most widely cited influencer
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- Figure 33: Purchase influencers, any rank, by race and Hispanic origin, January 2016
Sources of Information
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- Information and reviews inspire purchases
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- Figure 34: Sources of information, by all and Beauty Enthusiasts, January 2016
- Enthusiasts devote time to exploring a range of sources
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- Figure 35: Sources of information, by segment, January 2016
- YouTube and social media are key sources for Millennials
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- Figure 36: Sources of information, by generation, January 2016
- Hispanics use a range of sources
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- Figure 37: Sources of information, by race and Hispanic origin, January 2016
Shopping for Beauty Products
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- Most users turn to a range of brands, suggesting opportunity
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- Figure 38: Shopping for beauty products, agree, by all and Beauty Enthusiasts, January 2016
- Enthusiasts research extensively, in-store and online
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- Figure 39: Shopping for beauty products, select statements, by segment, January 2016
- Millennials find information from wide range of sources
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- Figure 40: Shopping for beauty products, select statements, by generation, January 2016
- Hispanics often shop for beauty products as part of household purchase
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- Figure 41: Shopping for beauty products, select statements, by race and Hispanic origin, January 2016
Attitudes toward Beauty Products
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- Positive attitudes are widespread, but choice overwhelming
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- Figure 42: Attitudes toward brands and shopping, any agree, by all and Beauty Enthusiasts, January 2016
- Self-esteem, personal style, and looking youthful drive interest
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- Figure 43: Attitudes toward beauty regimen and trends, any agree, by all and Beauty Enthusiasts, January 2016
- Enthusiasts find pleasure in shopping, sampling, and beauty routine
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- Figure 44: Attitudes toward brands and shopping, any agree, by segment, January 2016
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- Figure 45: Attitudes toward beauty regimen and trends, any agree, by segment, January 2016
- Millennials more likely to take pleasure in following trends, shopping
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- Figure 46: Attitudes toward brands and shopping, any agree, by generation, January 2016
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- Figure 47: Attitudes toward beauty regimen and trends, any agree, by generation, January 2016
- Hispanic women show positive attitudes, but resist paying for top brands
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- Figure 48: Attitudes toward brands and shopping, any agree, by race and Hispanic origin, January 2016
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- Figure 49: Attitudes toward beauty regimen and trends, any agree, by race and Hispanic origin, January 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – Market
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- Figure 50: Consumer Confidence, 2010-15
- Figure 51: Total US retail sales and forecast of beauty products, at current prices, 2010-20
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