Prestige beauty is off to a slower start in 2016, according to data from global information company The NPD Group, but e-commerce is helping to drive sales across categories.
For the January to May 2016 time period, sales of prestige fragrance, makeup and skin care combined grew 6 percent to $5.5 billion. For the same time period in 2015, sales had grown 8 percent.
Hardest hit looks to be skin care. Sales at brick-and-mortar are down 4 percent year-to-date through May. E-commerce, however, is helping out skin care as online sales grew 21 percent during this time, leading to a 1 percent gain for the category overall, to $1.7 billion.
In makeup, sales year-to-date through May are up 11 percent, to $2.7 billion. Brick-and-mortar sales of the category appear healthy, with an 8 percent increase. Yet last year at this time, makeup in-store sales had grown 11 percent. Makeup sales within the e-commerce channel grew 34 percent, compared to 35 percent in the year ago period.
Fragrances are up 2 percent in overall sales, to $1.1 billion. Last year at this time, the category saw a 5 percent jump in sales. Sales of fragrances at brick-and-mortar are flat year-to-date through May, while online sales are up 26 percent – a huge jump from the 6 percent growth online during the same January to May period in 2015.
“Year-to-date, e-commerce is up in double-digits, whereas brick-and-mortar is in single-digit growth mode. It’s even flat in some categories,” said Karen Grant, Global Beauty Industry Analyst at NPD.
“Looking at the prestige skin care category over the last two years, we see that its growth is being buoyed by double-digit sales growth happening online,” said Karen. “A skin care purchase is often replenishment driven, and the consumer may not always see the need to be engaged in the store.”
“What we continue to see is strong growth online of what we once called ‘indie’ or niche brands, such as natural and clinical brands. They represent the larger part of facial skincare sales done online. That’s another reason why online is doing well,” said Karen.
Consumers, Karen added, may plan for the type of product they will purchase online, but may not have a specific brand in mind when beginning their shopping journey. That, she said, can be influenced at the time of purchase.
Source: The NPD Group, Inc. / U.S. Prestige Beauty Total Department Specialty, January-May 2016