Three Hidden Gems in 2009's Low Prestige Beauty Sales
There's opportunity to be had -- if you know the right categories in which to look
OK, so the recession has hurt everyone in our industry. But prestige brands? They've been hit worst of all. As if things weren't bad enough after 2008's 3.3 percent drop in sales, 2009 kicks them while they're down with a whopping 7 percent drop in the first half of the year.
The sub-categories hardest hit? Fragrance, with a 10 percent drop, makeup sales were down 7 percent, and skin care brought up the rear with a 6 percent drop.
| ´ | Dollars | Sales Lift |
|---|---|---|
| Overall Beauty | $3.7B | -7% |
| Fragrance | $1.0B | -10% |
| Skin care | $1.2B | -6% |
| Makeup | $1.5B | -7% |
| Source: NPD Group | ||
Three Little Gems
But wait. When you sift through all that bad news, there are a few little gems of genius just waiting to be discovered:
Men and Wealthy Still Buying Fragrance
New fragrance launches were down 17 percent from 2008, with women's new fragrance launches generating 31 percent less dollar volume -- but men's new fragrance launches? They were up 23 percent from the prior year. Plus, sales for fragrances priced $75 to $99 and $100+, which account for 29 percent of prestige fragrance sales, were up 2 percent and 9 percent, respectively.
The New "Lipstick Index"
True, the term Leonard Lauder coined during the 2001 recession has been discredited as an economic indicator -- and may be replaced with a "new lipstick" index. Sales of newly launched lipstick skyrocketed 47 percent during the first half of 2009. Or perhaps it's a "new mascara" index, since new mascara launches' sales were up 4 percent. Or face makeup, whose sales were up 34 percent.
Bundle It and Moisturize It
In the skin care category sets and kits sales were up 8 percent, which means consumers are eager for regimens and value bundles. And while new skin care product launches were down overall for the first six months, facial moisturizers -- which comprise more than a quarter of new product launches so far in 2009 -- were up 2 percent.
So while the recession has been particularly hard-hitting for prestige beauty brands, data shows consumers are still spending -- yet being very choosy with where they spend their prestige dollars.
The economic recovery is going to be long and slow, so beauty brands in these categories should closely track how consumers are voting with their dollars, and adjust their product launch plans accordingly.
- Emrah Kovacoglu, Founder and CEO, Total Beauty Media, Inc.
