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Multicultural shoppers set pace in beauty care

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CHICAGO — While purchases by multicultural Americans over-index across beauty care categories, major brands are just now starting to look seriously at this growing consumer segment and put forth novel products to meet their needs.

That is the assessment of Courtney Jones, vice president of multicultural growth and strategy at Nielsen. Higher-end and niche brands have always catered to the multicultural market, but mainstream beauty suppliers of products in food, drug and mass outlets are “really looking at innovation,” she says. They’re not just taking existing lines and changing bottle colors or adding a fragrance or an extra ingredient, but investing in research and development, “especially in hair care. There’s just so much going in that space.”

For their part, retailers have shown mixed results in meeting the needs of multicultural shoppers, Jones says. Some are doing enough, but others could be doing a lot more. Chains that are leading the effort to recognize this emerging market have had end-cap promotions geared to women of color and their hair care needs, or an emphasis on new shades for multihued skin tones in their advertising and marketing, she says.

E-commerce provides another means of targeting the market. Digital channels and websites allow retailers to have a much broader assortment than they have in-store, thereby catering to the needs of various ethnic groups, Jones says. “That is really helping to drive growth.”

For suppliers, e-commerce historically offered a more feasible distribution outlet than brick-and-mortar stores. But now e-commerce and in-store offerings are proving complementary, with digital marketing bringing people into stores, leading to higher traffic and increased basket sizes, she says. In short, she says, e-commerce has become critical to helping optimize brick-and-mortar sales.

Indeed, despite an overall slowdown of in-store sales in the U.S. fast-moving consumer goods (FMCG) market in the year ended December 31, Nielsen’s view into e-commerce tells a more positive tale.

It showcases growth within specific product categories, including beauty. Compared to the relatively flat growth in the traditional brick-and-mortar grocery category, in 2016, e-commerce actually drove 1% of top-line growth. Across developed categories such as beauty and personal care (where beauty saw only slight in-store growth of 0.6% and personal care saw 1.3% in-store growth from 2015 to 2016), online retail drove more than 10% of 2016 sales.

New e-commerce initiatives, along with other efforts of beauty manufacturers and food, drug and mass retailers, reflect the growing purchasing power of multicultural consumers. But while the population as a whole is spending more, there are key differences among different ethnicities.

Hispanics tend to spend a lot on makeup and hair care, Jones says, with Latinas especially favoring hair color, hair spray and styling products.

Hair care is a priority for African-Americans. For those seeking products for textured hair the good news is they no longer have to solely patronize niche beauty supply stores and higher-end department stores. Many of the products they’re looking for are available at drug stores, mass merchandise outlets and supermarkets, Jones notes.

And products for textured hair have cross-cultural appeal, she emphasizes, pointing out that curly or wavy hair is hardly limited to black women. Indeed, recognition of the extent of the market, along with resistance to chemical relaxers with potentially harmful ingredients, has spurred a rise in natural products for textured hair. The upshot is that there are now widely available entire natural product lines for curls, or with anti-frizz attributes.

In stores, the change has led to the renaming of “ethnic” departments as “textured hair” sections, and their expansion from as little as a few feet into full aisles with promotional end-caps, Jones observes. “The narrative is a little different because there is broader appeal,” she says.

Demand for products across ethnicities may be best illustrated by the popularity of cosmetics and skin care items for Korean women.

Burgeoning demand has made South Korea the No. 4 country in beauty exports, with about $2.4 billion in annual sales, notes Jones. That success has been driven, in this country, by the Korean beauty care phenomenon extending far beyond Asian Americans. “K-beauty is huge in the beauty category as a whole,” she says.

For Hispanics, seven of their 10 biggest nonedible expenditures are associated with health and beauty aids. “That lets you know how important the beauty category is to them,” Jones comments. Fragrances are particularly prized by Latinas, she adds.

For the multicultural market as a whole, social media is a much sought-after form of expression — even more so than for the overall consumer population — especially when it comes to appraising new cosmetics and hair and skin care products. That explains why there are so many beauty bloggers, Jones says, and why so many of them are women of color. It also explains why so many have become brand ambassadors. They are category experts who are sought out by retailers and manufacturers to validate products, she says.

Even when they’re critical, bloggers can help suppliers by pointing them to needed product enhancements, Jones notes. Bloggers are wholeheartedly trusted by followers and YouTube viewers for their lack of bias and their expertise on ideas from packaging to color palettes to formulation, she stresses.

Nielsen Homescan_multicultural beauty care spending


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