For drug chains, re-energized beauty offering dovetails with wellness push
Mass market beauty care sales rose only 2% in 2016, according to NPD Group Inc. (lower than prestige at 6%), but several categories recorded impressive results.
Skin care, for example, is growing faster in mass than class. By the end of last year, NPD reported mass facial skin care sales as being up 4% over 2015 at a time when prestige was flat. Eyebrows is another area where on-trend products are pulling shoppers away from specialty. According to IRI data, brow product sales soared 27% for the 12-week period ended January 22 in mass doors.
And this year looks even brighter, especially for drug stores, as consumers embark on a journey for healthier lifestyles.
According to Jordan Rost, vice president for consumer insights at Nielsen, retail health clinics are seen as driving beauty sales. Specifically, Nielsen notes that 53% of clinic visitors are influenced to buy a product in-store, with 27% of those purchases being personal care items. That percentage increases to 76% when it’s a Millennial shopper. The presence of a pharmacy kicks into the overall wellness positioning of a beauty department, too. “We are seeing the consumer live a much more holistically healthful life, and that is impacting how they are consuming beauty items,” confirmed Rost.
Working out is associated with healthier lifestyles, and women embrace athleisure apparel. That’s spilled into beauty, too. Mintel has called “active beauty” the next key trend to impact the business.
“Consumers are being encouraged to exercise their bodies and brains, and beauty brands will formulate products to help them in their quest for health and fitness,” noted Jane Henderson, global president of Mintel’s beauty and personal care division. “Now, companies and brands are perfectly positioned to better align themselves with this interest by innovating beauty and personal care products to meet the needs of active consumers.”
Items on Mintel’s radar include those that shield hair and skin from the environment, as well as personalized beauty brands teed up to users’ unique DNA. Prestige already has such active beauty items as Tarte, Pink Cheeks, Lola and Activ Bod, and buyers are waiting for the concept to cascade down to mass.
There appears no letup in interest in Korean beauty brands, which have seen strong growth in sales volume, with exports reaching $2.45 billion in 2015, according to Deborah Weinswig, managing director for Fung Global Retail and Technology. Korean beauty brands, she reasoned, have adopted fast fashion development cycles for beauty. Just as Forever 21 rushes a runway style to its stores, Korean beauty companies can duplicate the latest trends. BB creams, cushion compacts and sheet masks are all examples.
Already, mass retailers have jumped in. Target Corp. has a curated selection of 13 items from Alicia Yoon who, with her Peach & Lily website, helped usher in the craze.
“Peach & Lily is known as the authority on Korean skin care,” said Dawn Block, Target’s senior vice president of beauty and essentials. “Bringing this curated assortment to Target provides us with a chance to test new offerings and expand on our positioning as a go-to, credible source for beauty must-haves while giving our guests added convenience and just one more reason to choose Target.”
A few other examples of Korean beauty offerings are on display at Walgreens, Target and Rite Aid Corp., which sell masks from Masque Bar that were developed using Korean expertise. CVS Pharmacy also features its own collection of Korean-developed masks called Beauty360.
With shoppers learning more about beauty from social media, be it tutorials on YouTube or photos on Instagram, they are more willing than ever to try brands they hadn’t heard of from big-budget advertising.
Venerable brands such as Revlon, Maybelline and L’Oréal now share shelf space with up-and-comers such as e.l.f. and NYX (which L’Oréal purchased two years ago). Major launches at CVS are now often indie brands, according to Alex Perez-Tenessa, vice president and merchandise manager of beauty and personal care at CVS Health. There were 2,800 new items launched last year in cosmetics alone at the retailer.
Socially wired shoppers do like to buy from phones and computers. Online beauty now accounts for 15% to 20% of sales, according to Nielsen’s Rost. He advised thinking of how offline and online can work together to ease the path to purchase from discovery to buying.
Online is gaining steam in mass beauty, but there is a sizable audience who research online and want the touch and feel. To capitalize on those who like the experience, retailers are rushing to burnish service in stores. Associates are now armed with tools such as iPads to help shoppers navigate shelves.