Tuesday evening brought together a who’s who in beauty at Manhattan’s The Union League to hear how the industry ended 2014 at this year’s CEW/NPD Group’s Beauty Industry 2014 Year-in-Review Event “Hot off the Press.”
To cut to the chase, prestige beauty grew 3% to $11.2 billion, while mass beauty remained flat at $22.1 billion. Unit sales were up 1.5% in prestige and down 2% in mass. Overall, beauty reached $47.9 billion in the US, with TV/Home Shopping accounting for 24%, mass channels 24%, department stores 17%, specialty stores 17% and drug stores 13%.
The gap between prestige and mass was seen in all categories, with prestige skin care growth +2% and in mass +1%; prestige makeup +6%, mass makeup -1%; prestige fragrance +2%, mass fragrance -4%.
Consumers’ beauty trips to mass and prestige stores decreased during 2014, 4% and 8%, respectively. Meanwhile, consumers visited pureplay sites 16% more often during the year.
NPD reported that the retail trends for 2015 include:
• Consumers are no longer being proactive, they are reactive.
• Mobile is a necessity, not a luxury.
• Mobile has entered into a mature phase and now reaches 69% of households.
Highlights in Mass Beauty 2014:
• The US mass beauty industry spent $2.2 billion on advertising, about 10% of overall sales.
• Neilsen research showed that beauty ads in 2014 were 20% less effective for women 18 and older.
• To stand out in mass beauty, address the wellness trend: natural/organic beauty increased 24% at a compounded annual growth rate in the past four years.
• Men are increasing their interest in beauty, accounting for 6% of makeup purchases, 14% of fragrance, 25% of skin care, 30% of hair care and 25% of shave.
Highlights in Prestige Beauty 2014:
• Best selling items globally included Estée Lauder’s Advanced Night Repair Synchronized Recovery Complex II, Estée Lauder Double Wear Foundation and Clinique’s Dramatically Different Moisturizing Lotion.
• Prestige beauty online growth (including TV sales), grew 12%, outpacing brick and mortar growth, which increased 1%.
• Makeup sales were driven by lip products, which grew 9%, eye products grew 7%, face productsincreased 6%.
Globally, beauty saw success in the UK (+5% to $3.7 billion); Canada (+5% to $1.3 billion) and Peru (+7% to $42 million). France saw a decline of 1% to $3.6 billion, and Italy saw a slip of 1% to $2.1 billion. Makeup was a winning category globally with increases in the UK (+13%), the US (+6%), Mexico (+9%), Peru (+13%) and Canada (+10%).