TBC Beauty Facts, Figures, and Trends
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TBC Beauty Facts, Figures,
and Trends
June 2012
Beauty statistics – can we ever seem to agree?
Fun Facts
• MAC sells 1 lipstick and 1 eye shadow • 45% of women cut back on skincare
every 2 seconds during the recession, but 14% are already
spending more
• Walgreens has 25,000 beauty SKUs and
8,000 doors • 20% of Americans have a household
• Harrod’s stocks 43,000 beauty SKUs income of $100K plus, which represents
70% of total US consumer wealth
• On average, women aged 18+ spend
$144 year on beauty
• According to NPD, $75K plus households
• By region, the West spends the most on had an increase in beauty spending from
beauty - $154 2008 – 2010 ($134 to $186)
• 57% of women have purchased skincare
at WalMart or Target in the last 6 months
• 10% of your customers are 80% of your
revenue
Euromonitor, “Latest Research: Beauty and Personal Care 2012 Now Live”, Euromonitor.com, first accessed on 6/12/2012
Phelan, Hayley “Beauty’s Top 100.” WWD.COM. 8.12.11, wwd.com, first accessed on 6/12/2012
Yeomans, Michelle, “US personal care market surpasses pre-recession levels in 2011”, Cosmeticsdesign.com, first accessed on 6/12/2012
PRWeb.com, “The NPD Group presents 2011 Overview of the US & Global Beauty Sales’, prweb.com, first accessed on 6/12/2012
Mintel Beauty Retailing Report, April 2011 3
WSL Strategic Retail
An Industry of Giants
• 26% market share of US mass skincare is driven by four flagship global brands:
Neutrogena (which is the largest), Aveeno, Roc and Clean & Clear
Euromonitor, “Latest Research: Beauty and Personal Care 2012 Now Live”, Euromonitor.com, first accessed on 6/12/2012
Phelan, Hayley “Beauty’s Top 100.” WWD.COM. 8.12.11, wwd.com, first accessed on 6/12/2012
Yeomans, Michelle, “US personal care market surpasses pre-recession levels in 2011”, Cosmeticsdesign.com, first accessed on 6/12/2012
PRWeb.com, “The NPD Group presents 2011 Overview of the US & Global Beauty Sales’, prweb.com, first accessed on 6/12/2012 4
Worldwide & US
Cosmetics Market
• Total sales in the beauty and personal
care industry were roughly $426 billion in
2011.
• Total global beauty sales for January –
March 2012 were up 14% to
$2,278,000,000
• Total Makeup sales were $932 million, up 10%
• Total Skincare sales were $844 million, up 19%
• Total Fragrance sales were $501 million, up 11%
• In 2011, the US cosmetics & toiletries
market surpassed pre-recession levels in
sales with a 4.2% growth to exceed $38
billion
• For the top 100 companies in the
cosmetic and personal care sectors, sales
increased by 25.1% in 2011.
Euromonitor, “Latest Research: Beauty and Personal Care 2012 Now Live”, Euromonitor.com, first accessed on 6/12/2012
Phelan, Hayley “Beauty’s Top 100.” WWD.COM. 8.12.11, wwd.com, first accessed on 6/12/2012
Yeomans, Michelle, “US personal care market surpasses pre-recession levels in 2011”, Cosmeticsdesign.com, first accessed on 6/12/2012
PRWeb.com, “The NPD Group presents 2011 Overview of the US & Global Beauty Sales’, prweb.com, first accessed on 6/12/2012 5
Cosmetic Product Categories
Now that you know where all the money is spent, it’s helpful to know what people are
spending their money on. The cosmetic industry (aka beauty industry or personal care
industry) can be broken down into 5 categories with sales distributed as follows:
Hair Care: 20% Facial Skin Care: 27% Fragrance: 10%
Make-up: 20% Personal Care: 23%
Perry. “A Cosmetic Industry Overview for Cosmetic Chemists.”, www.chemistscorner.com first accessed on 6/12/2012
6
Cosmetic Product Categories
Hair Care Shampoos make up the vast majority of this market since almost everyone uses
shampoo. Other significant market segments include conditioners, styling products,
hair color, and relaxers. Currently, the biggest players in this category are Procter &
Gamble (Pantene) and L’Oreal.
Skin Care The range of products that are offered for the skin care market are much more diverse
than the hair care market. Skin care includes skin moisturizers, cleansers, facial
products, anti-acne, and anti-aging products. The biggest companies in this market
include Procter & Gamble (Olay) and Unilever (Vaseline).
Make-up The color cosmetic market includes anything from lipstick to nail polish. Included are
things like blush, eyeshadow, foundation, etc. The array of products is vast and the
number of color variations are practically infinite. The market is highly segmented so
there isn’t really one dominant player. Maybelline and Clinique are just a couple of
significant brands.
Perry. “A Cosmetic Industry Overview for Cosmetic Chemists.”, www.chemistscorner.com, first accessed on 6/12/2012
7
Cosmetic Product Categories
Fine Fragrance This market segment has really taken a hit in the last few years but it still makes
up about 10% of the cosmetic industry. This is the highest profit segment of the
cosmetic industry but consumers are fickle. Only a few brands (like Chanel #5)
can last for a long time. Fine fragrances come and go like fashion and
companies have to continue to reformulate just to compete. Sales of prestige
fragrances rose 10% in North America in 2011.
Personal Care The “personal care” category represents 23% of the cosmetic industry and is
made up of things like toothpaste, deodorants, sunscreens, depilatories, and
other personal care products not yet mentioned. The dominant companies are
many of the same already mentioned, P&G, L’Oreal, and Unilever.
Perry. “A Cosmetic Industry Overview for Cosmetic Chemists.”, chemistscorner.com, first accessed on 6/12/2012
8
Euromonitor, “Latest Research: Beauty and Personal Care 2012 Now Live”, Euromonitor.com, first accessed on 6/12/2012
A Look into Key Distribution
Segments
Drug Stores The US drugstores industry includes about 20,000 companies with
combined annual revenue of about $220 billion.
• Major companies include Walgreens, CVS Caremark, and Rite Aid.
• The industry is concentrated: the 50 largest companies generate about 70
percent of revenue.
Spa Services The spa services industry in the US includes about 18,000 facilities with
combined annual revenue of more than $13 billion.
• Major spa services companies include destination spa chains Canyon Ranch
and Golden Door, massage clinic franchise Massage Envy, as well as day
space franchise Woodhouse Spa.
• The industry is highly fragmented: most spa services companies operate a
single facility with less than $1 million in annual revenue.
“Cosmetic Industry Overview” Hoovers.com, first accessed on 6/12/2012.
9
A Look into Key Distribution
Segments
Department Stores The US department store industry includes about 3,500 stores with
combined annual revenue of $70 billion.
• Major companies include Sears, JCPenney, Macy's (which owns
Bloomingdale's), and Dillard's.
• The industry is highly concentrated: the top 50 companies have
nearly 100 percent of the market.
Cosmetic Retail Market The cosmetic, beauty supply, and specialty store industry includes
about 13,000 stores with combined annual revenue of around $10
billion.
• Major companies include ULTA, Sephora, and divisions of Limited
Brands (Bath & Body Works) and L’Oreal (The Body Shop
International).
• The industry is concentrated: the top 50 companies have almost 75
percent of industry revenue.
“Cosmetic Industry Overview” Hoovers.com, first accessed on 6/12/2010
10Key Players
Massive multinational corporations dominate the makeup industry, but in recent years
they have been creating or acquiring boutique brands in order to crack the market for
premium makeup.
Estée Lauder and rival L'Oréal have realized that, like the spirits industry, the key to
success lies in offering a suite of products targeted at a wide range of customers, but
with special emphasis on the growing global luxury sector, in particular China.
Mmoma, Ejiofor. "World's Best-Selling Makeup." Forbes.com. 2/9/06
11World’s Largest Beauty Brands
Goudreau, Jenna “Forbes top 10 Global Beauty Brands" Forbes.com., first accessed on 6/12/2012
12World’s Largest Beauty Brands
Goudreau, Jenna “Forbes top 10 Global Beauty Brands" Forbes.com., first accessed on 6/12/2012
13Growing Beauty Category:
Men’s Grooming
Men’s Grooming is Fastest Growing Category
According to Euromonitor International, men’s grooming is set to be one of the fastest-
growing categories in beauty and personal care, predicted to add approximately $4 billion
to its global value size ($27 billion) by 2014.
Why? Sales are set to rise thanks to changing attitudes among men globally about grooming and a
shift in key emerging regions away from manual work toward white-collar jobs.
Where? The U.S. commands the highest value sales, accounting for an 18% share of the global $27
billion men’s grooming in 2009, but it is showing signs of slowing growth as an after-effect of
the recession, and Western Europe remains the largest region for the male-specific category
because of strong sales in the French, German and U.K. markets. The region is set to
continue to see strong growth, adding more than $800 million to its size by 2014 as men in
the region move beyond basic products related to shaving to more sophisticated grooming
regimens that incorporate numerous skin care and post-shave products.
Lennard, Carrie. “Masculine Dynamism—Men’s Care Growing Fast”. 12/6/10. GCI Magazine.
14Consistency is Key
Differing from other categories, beauty has
been the most consistent throughout the
economic downturn and recovery.
• From holiday 2008 through early 2010, the beauty
category displayed search impression levels that
were flat to slightly decreased. In addition the
number of orders in the luxury beauty category
increased only slightly at nine percent and
conversion rates increased at a rate of 17%.
• This consistency in the luxury beauty category
throughout the recession and upswing perhaps
indicates support for the widely known “lipstick
effect,” the theory that consumers are more willing
to purchase lower cost luxury goods even when
their funds are more limited.
“Beauty: Consistency is Key.” Range Online Media. 2010. 15Prestige Sales Shine
in U.S. Department Stores
Sales for prestige beauty are on a positive trend.
According to NPD, the total U.S. prestige beauty industry showed an increase
of 11% to $9.5 billion vs. $8.6 billion in 2010
The Top Five Prestige Fragrance Brands
Chanel – Coco Mademoiselle
Giogio Armani – Acqua di Gio Pour Homme
Chanel – Bleu de Chanel
Dolce & Gabbana – Light Blue
Gucci – Guilty Homme
The Top Five Prestige Skin Care Products
Clinique – Dramatically Different Lotion Pump (4.2 oz)
Clinique Even Better Clinical Dark Spot Corrector (1.7oz)
Clinique Even Better Clinical Dark Spot Corrector (1.0 oz)
Estee Lauder – Advanced Night Repair Eye Synchronized Complex
La Mer – Crème De La Mer Moisturizer (2.0 oz)
The Top Five Prestige Lip Products
MAC Lipstick
Clinique Almost Lipstick
Lancôme L’Asolu Rouge
Lancôme Rouge In Love
Estee Lauder Pure Color Lipstick
WWD.com, “Beauty, A Rosy View”, www.wwd.com first accessed on 6/12/2012
The NPD Group / BeautyTrends® 162011 Winners & Losers
• Fragrances contributed 35% to the growth in premium
health & beauty products market in 2011, skincare 30%
and makeup 15%
• With gains of +57%, women’s celebrity brands were
shining
• Nail polish is still hot. Between 2008 – 2011 (a
timeframe characterized by the recession) sales of nail
polish soared by 43%
• According to Mintel, in 2011 KAO Brands showed
impressive growth in the mass market category
• BB creams are the new darling. In the 12 months
ending March 2012, BB creams sold in U.S.
department stores generated close to $9 million.
Euromonitor, “Latest Research: Beauty and Personal Care 2012 Now Live”, Euromonitor.com, first accessed on 6/12/2012
The NPD Group / BeautyTrends®
Walker, Rob, “State of the Industry”, Euromonitor International, 6/1/2012, www.gcimagazine.comfirst accessed on 6/12/2012
Woitalla, Ina, “Hot off the press, Prestige Beauty Sales Results”, Mintel Beauty & Personal Care , www.mintel.com first accessed on 6/12/2012 17Succeeding in Beauty
Only a very small percentage of new beauty products and brand introduced into the market
each year are successful. The experts offer different explanations as to why:
• According to Procter & Gamble CEO A.G Lafley, “In our industry, only about 15 to 20 percent of new brands and
products really succeed. Every year from 2000 through 2007—the last completed fiscal year virtually all of our
incremental growth has come from innovation. One of the things we try to understand is … what's the real pace of
innovation that's right for the consumer, right for the retailer and right for us.”
• According to research agency AcuPoll, “As many as 95 percent of new products introduced each year fail.”
• According to Ernst & Young, “Upwards of 80 percent of new brands fail and the primary reason is a lack of
differentiation from competitors.”
• According to Marketing Corporation of America, “Line extensions have a failure rate of 49 percent, while 74 percent
of more innovative products fail. Reasons for new product failure include: A value proposition that is not sufficiently
compelling and/or awareness and trial is not generated by marketing.”
• According to the Americian Association of Advertising Agencies, “In the highly-competitive consumer goods market, the
success of a new product is the hard-earned result of streamlining innovation processes and supporting them with
experienced, dedicated people and enabling technologies. About 75 percent of new products fail and that number
may be even higher in a recessionary environment.”
Cavallero, Matt. “Cosmetics Stocks Will Make Your Eyeliner Run”. 10/1/2010.
"The eyes have it! Eye makeup sales bolster color cosmetics growth, reports Mintel” 7/2010. 18
Miles, Lynn. “New Products, Facts, and Stats.” 6/607. Research Matters #6757.Make-up Usage, Motivation,
& Purchase Behavior
Daily Makeup Usage
• Average woman spends 20 minutes a day applying makeup
• 4 out of 5 women wear makeup.
• 76% use lip gloss and lipstick • Moisturizing (54 percent) and SPF (51
• 65% of respondents report using mascara percent) are the most popular skin care
• 63% of women report wearing eye shadow benefits in makeup products. These were
followed by “oil-free-won’t clog pores” (32
• 62% use eye liner percent); “reduces wrinkles-fine lines” (30
• 38% use brow pencils percent) and items that are natural or
• 22% use lip pencil mineral-based (27 percent), according to the
• 7% use compact lip color report
• 86% of makeup users have used makeup • Only one million women, based on census
with skin care benefits in the past year projections, are wearing only one makeup
product a day
“The eyes have it! Eye makeup sales bolster color cosmetics growth, reports Mintel” 7/2010.
"How much will you spend on makeup in your lifetime?”. 3/12/10.
Evans, Michael. “NPD Report Shows Decline in Makeup Usage”. 8.18.10.
19Make-up Usage, Motivation,
& Purchase Behavior
Emotional Connection/Motivations
• Nearly half of U.S. women surveyed believe wearing makeup gives them an advantage
at work and makes them feel more in control
• 82% of women surveyed believe wearing makeup makes them feel more self-confident
• 86% of women believe that wearing makeup improves their self-image
Shopping Habits
• Average woman spends $15,000 on makeup in her lifetime.
• From the ages of 16 to 65, a woman shops for cosmetics about five times a year.
• Each time she’ll spend roughly $43, equaling about $216 a year.
• That’s about $2,750 on eye shadow, $1,780 on lipstick and $3,770 on mascara in total
• The average U.S. consumer spent $616 on personal care in 2008
“L'Oréal Survey Reveals Beauty Habits in the Face of Recession”. 8/31/09. GCI Magazine.
"How much will you spend on makeup in your lifetime?”. 3/12/10.
20So How Do You Become A Beauty Rock Star? “Making it in the beauty biz!”
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