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Spa Products Show Strongest Growth in 2008

Historically, the beauty industry has weathered store closings, recession and war with strong sales. Due to one of the worst economic downturns in the nation’s history, 2008 was different. It was the first year each beauty category truly struggled and total prestige beauty sales declined 3% versus 2007, according to The NPD Group, Inc., a leading market research company.

Prestige Makeup

Although fragrance sales have struggled for the past few years, the decline in makeup was most surprising. Annual 2008 marked the first time makeup products posted a decline, dropping 3% in dollars and 6% in units. All segments in the makeup category showed declines including face, eye and lip segments.

And yet, despite the declines, there were still key areas in the category that helped stave off stronger declines within makeup. One bright spot for makeup was natural, which experienced a surge in prestige offerings in the past year. Premium priced products in the face segment also showed strength in 2008, even as other makeup segments struggled with their premium price offerings.

Prestige skin care

Prestige skin care was the only category to stay somewhat afloat, staying even with last year on a dollar basis, and capturing 29% dollar share, an additional share point over 2007, of total prestige beauty sales. Total prestige skin care products, which include face, body, sun and hair products, generated $2.4 billion in 2008.

There were also some beacons of light which had stronger performances: anti-aging and specialization, premium price, and natural brands. Anti-aging face products grew, and products that offered specialization (such as allergy relief, redness and whitening/brightening) were up double digits. Premium priced face products (priced $70 and up) increased 4% in dollars from 2007.

Lastly, natural/spa/wellness skin care brands showed the strongest dollar growth of the distinctive brand types, up 6% versus year prior to $304 million.

“The economic realities of 2008 have created fundamental shifts in the behavior of our consumers and the way they approach beauty. In 2009, we recognize that while consumption will not stop for prestige beauty, it has changed. It has become and will become more careful, more selective, and more meaningful. Across all three prestige beauty categories, there were areas that experienced growth despite overall soft performance. We saw growth in premium price, natural and new innovations among trusted brands as well as alternative brand types,” said Karen Grant, senior global industry analyst and vice president, Beauty.

“Moving forward, we must continue to look for these opportunities, find new ways to reach our consumers, and build our relationship and communication with them—that relationship is an increasingly critical part of the total value—not just price—they see in what we are offering them and in whom they chose to invest,” ended Grant.

 

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