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Beauty Retailing - US - January 2016

Beauty Retailing - US - January 2016

US retail sales of beauty products reached $46.2 billion in 2015 and are slated to grow to $51.8 billion by 2020, for a gain of 12%. This slow and steady growth will be fueled by a stronger economy, as well as by population gains among women (and men), and multicultural segments, particularly Hispanics. The category is so broad and diverse that the abundance of choice can cause consumers to stay in their routines, buying the same brands and products and shopping at the same places for beauty products repeatedly.

Diana Smith, Senior Research Analyst - Retail & Apparel

This report covers the following areas:

Beauty market slated for growth

Amazon rivals specialty retailers as preferred retail channel

Men are beauty buyers too

Unlock the mobile moments


OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Beauty market slated for growth
Figure 1: Total US sales and fan chart forecast of beauty products, at current prices, 2010-20
Amazon rivals specialty retailers as preferred retail channel
Figure 2: Retailers shopped, October 2015
Rinse and repeat
Figure 3: Reasons for buying beauty products, October 2015
The opportunities
Men are beauty buyers too
Figure 4: Beauty items purchased by men, by age, October 2015
Unlock the mobile moments
Figure 5: Behaviors and attitudes toward using mobile devices to shop for beauty products, October 2015
Give them what they want
Figure 6: Interest in retail innovations, by heaviest beauty shoppers, October 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Steady outlook
Crowded landscape
Population trends impact the beauty market
MARKET SIZE AND FORECAST
Steady market growth should hold in the foreseeable future
Figure 7: Total US sales and fan chart forecast of beauty products, at current prices, 2010-20
Figure 8: Total US retail sales and forecast of beauty products, at current prices, 2010-20
MARKET BREAKDOWN
Color cosmetics clearly lead this multidimensional category
Share leaders
Fast-growing categories
Facing challenges
Figure 9: Total US retail sales of beauty products, by segment, at current prices, 2013 and 2015
Drug stores comprise nearly 20% of beauty sales
Figure 10: Total US retail sales of beauty products, by channel, at current prices, 2010-15
MARKET FACTORS
Population growth among women bodes well for beauty market
Men take a vested interest in their appearance
Multicultural segments are key targets
Figure 11: US population, by race and Hispanic origin, percent of total population, 2010-20
A brighter economy will help support sales in the market
Increasing interest in organic and natural beauty products
KEY PLAYERS – WHAT YOU NEED TO KNOW
Drug stores are holding their own while department stores slip back
Many men have no qualms about using grooming products
Technology is transforming how the category is shopped
WHAT’S WORKING?
Drug stores experiencing success
Figure 12: Factors that influence where to shop, by primary retailer shopped – Drug stores, October 2015
Marketing to men
WHAT’S STRUGGLING?
Department stores trying to keep up
Figure 13: Factors that influence where to shop, by primary retailer shopped – Any department store, October 2015
WHAT’S NEXT?
Subscription services are beginning to make an impact
Technology continues to invigorate the category
In-store immersion
Virtual tools
THE CONSUMER – WHAT YOU NEED TO KNOW
Opportunity to extend targeting efforts
Path to purchase gets more complex
Ample opportunity for experimentation by retailers and consumers alike
Mobile phones as personal beauty shopping assistants
WHO’S SHOPPING FOR BEAUTY PRODUCTS?
Over half of beauty purchasers are “heavy” buyers
Figure 14: Repertoire of beauty shoppers, October 2015
Figure 15: Beauty items purchased by store type, by repertoire of beauty shoppers, October 2015
Young parents are another key target group
Figure 16: Repertoire of heavy beauty shoppers*, by demographics, October 2015
Don’t overlook the men
Figure 17: Mean skincare and haircare expenditures, by gender and race/Hispanic origin, February 2014-March 2015
RETAILERS SHOPPED
Signs of channel shifting and blurring
Figure 18: Retailers shopped, October 2015
Men and women shop the category differently
Figure 19: Select retailers also shopped at, by gender, October 2015
Department stores commonly visited by multicultural consumers
Figure 20: Select retailers also shopped at, by race and Hispanic origin, October 2015
Grocery stores for beauty products?
Figure 21: Select retailers also shopped at, by repertoire of beauty shoppers, October 2015
REASONS FOR CHOOSING WHERE TO SHOP
Attractive prices and convenient locations drive nearly half of beauty buyers to their retailer of choice
Figure 22: Factors that influence where to shop, October 2015
Easy-to-navigate stores draw young male buyers
Figure 23: Agree that easy to shop/navigate the store/website impacts retailer choice for beauty products, by gender and age, October 2015
To help or not to help
Figure 24: Attitudes toward sales associates – Agree, by gender and age, October 2015
In their words
BEAUTY ITEMS PURCHASED
Grooming staples are commonly purchased items
Figure 25: Beauty items purchased, October 2015
High/low buying strategy in place
Figure 26: Beauty items purchased by store type, October 2015
Hispanic women see beauty products as tools to enrich their looks
Figure 27: Any beauty items purchased by store type, by female race and Hispanic origin, October 2015
In their words
REASONS FOR BUYING BEAUTY PRODUCTS
Bee-lining to the products she knows and trusts
Figure 28: Reasons for buying beauty products, October 2015
Young and multicultural women key targets for trial tactics
Figure 29: Agreement to trying something new as a reason for buying beauty products, by select demographics, October 2015
Product reviews can impact purchase decisions
Figure 30: Agreement to read a review of a product online and then bought it as a reason for buying beauty products, by select demographics, October 2015
In their words
SHOPPING PROCESS REVEALED
ATTITUDES TOWARD DIGITAL TECHNOLOGY
Power of the mobile device
Figure 31: Behaviors and attitudes toward using mobile devices to shop for beauty products, October 2015
Geo-fencing mobile strategies and beacon technology can help retailers engage with customers
Figure 32: Agreement to redeem coupons received on mobile device while shopping for beauty products, by select demographics, October 2015
Men prefer to consult their phones for advice instead of a human
Figure 33: Attitudes toward digital technology, by gender, October 2015
In their words
CHAID ANALYSIS
Figure 34: CHAID analysis among those who agree they would be interested in smartphone/tablet apps that give them beauty product offers to redeem in-store, October 2015
ROLE OF SOCIAL MEDIA
Influenced and influential
Figure 35: Attitudes toward social media's influence on beauty purchases, by gender, age, and repertoire of heaviest beauty shoppers, October 2015
Figure 36: Reasons for buying beauty products and/or choosing where to shop related to social media, by select demographics, October 2015
Over half of heavy beauty buyers use YouTube
Figure 37: Social media sites visited daily by repertoire of heaviest beauty shoppers, October 2015
In their words
INTEREST IN RETAIL INNOVATIONS
More samples please
Figure 38: Desired retail innovations and/or improvements, October 2015
Younger consumers interested in delivery and pickup services
Figure 39: Select desired retail innovations and/or improvements, by gender and age, October 2015
Hispanics and Blacks like personalized assistance
Figure 40: Select desired retail innovations and/or improvements, by race and Hispanic origin, October 2015
If consumers were beauty store owners…
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET
Figure 41: Total US retail sales and forecast of beauty products, at inflation-adjusted prices, 2010-20
Figure 42: Female population by age, 2010-20
Figure 43: Consumer confidence and unemployment, 2007-November 2015*
APPENDIX – THE CONSUMER
Figure 44: Attitudes toward digital technology, CHAID analysis, October 2015
Figure 45: Amount spent on beauty products in last three months – Makeup, haircare, and skincare, July 2014-September 2015
Figure 46: Attitudes and opinions about social media, July 2014-September 2015

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