Niche, indie brands are growing at the fastest rate within the U.S. prestige beauty market, according to data from The NPD Group’s U.S. Prestige Beauty Total Measured Market (TMM) retail sales tracking service. Looking at dollar sales within the total market and exclusively online from January through June 2015, this is a trend that is happening across retail.
“Consumers have a heightened interest in a personalized approach to beauty and in their choice of beauty products. This is opening the door to brands that have a specific, fine-tuned beauty focus, whether it be eye brow expertise or targeted solutions for specialized skin concerns, rather than more generalized expertise in a broader category, like makeup or skincare,” said Karen Grant, Global Beauty Industry Analyst, The NPD Group. “Looking across the Total Measured Market for prestige beauty reveals just how dynamic this trend has become, and how brands that previously would not have been considered as major players are carving out their space in the minds and wallets of beauty consumers.”
Overall, consumers are investing in prestige beauty. The industry grew 7% in the first half of 2015, compared to 4% during the same period in 2014. Prestige makeup growth continues to exceed that of its skin care and fragrance counterparts, within the total market as well as online specifically, where skincare holds the lion’s share of dollar sales.
In the prestige beauty total measured market for the first six months of 2015, makeup sales grew to $3.1 billion, an increase of 13% versus an 8% increase for the same time period in 2014. Skin care sales jumped to $2.6 billion, a 3% rise, compared to a 2% uptick a year ago. Sales of fragrance reached $1.5 billion, up 4%, compared to 2% growth the year prior.
Online prestige beauty sales grew in double digits across the category’s top three segments. Skin care sales online for the first six months of 2015 reached $355.8 million, a 22% increase, even with 2014’s increase. Online makeup sales reached $306.7 million, a spike of 34%, compared to a jump of 31% for the prior year’s similar time period. Fragrance sales online reached $13 million, an increase of 6%, compared to a 22% jump in 2014.
The prestige beauty brands seeing the most growth based on dollar sales increases in the total measured market were Anastasia Beverly Hills, IT Cosmetics, Too Faced Cosmetics, NARS and Tarte. The top five growth brands online based on dollar sales change were Anastasia Beverly Hills, Kiehl’s, Tarte, NARS and Too Faced Cosmetics.
“In large part, the rise and success of the more niche, boutique style brands can be attributed to the online environment, which has given these brands a louder voice and broader reach,” added Karen. “While brick and mortar is still the major channel for prestige beauty product sales, online and other Total Measured Market channels, such as mid-tier, are providing new and smaller brands a platform to tell their unique stories and engage with a meaningful base of consumers. This is creating entirely new opportunities, a new view of the competition, and is altering the dynamics within the industry.”
