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Thanks in part to aggressive marketing and streamlined product lines from leading brands and retailers, consumers who curtailed their purchase cycles and refrained from testing new products during the recession are back and ready to spend.
Sales reached $8.4 billion in 2012, a more than 8 percent increase since 2010. A new report from Mintel Group Ltd., “Color Cosmetics – US – July 2012”, forecasts a 22 percent increase between 2012 and 2017, with sales expected to climb to $10.3 billion.
With a healthy, growing outlook, private label cosmetic lines are poised to garner more market share with a focus on their unique niche within the category, particularly those with domestic-based roots.
“I believe the state of the economy has retailers looking for products that are ‘Made in the USA’”, says Lisa Antinelli, vice president for Diamond Cosmetics, Sunrise, Fla. “We are seeing an increase in calls from buyers and category managers looking for domestic manufacturers to produce their existing lines of products.”
Grayce Young, Owner of First Impact New York, NY adds, “We have personally seen quite a boost in business for some of our clients because of emerging international markets like China, Brazil and Korea. There’s a big demand for U.S.-based brands internationally. “
Domestic interests aside, private label lines should stay the course, following the trends and changes most important to their customer base.
According to Mintel’s report, the projected 10 percent increase in the U.S. female population before 2016 will encourage color cosmetic sales, though shifts in the age of the female population, namely an increase in the 55-74 segment, will influence which types of cosmetics are most in demand.
To effectively target the significant Baby Boomer population, “Manufacturers should consider the factors that older women are more likely to consider important
when choosing cosmetics – namely moisturizing, anti-aging, and whitening/brightening – when creating product formulations,” states the report. “Cosmetics that provide functionality beyond basic beauty enhancements have found a receptive consumer audience.”
Brands that are clinically tested and deliver stated results are among the most popular. Judith Mancini, CEO of Calabasas, Calif.-based La Contessa Skin Care, points to key ingredient trends: resveratrol combined with peptides to reduce wrinkle depth and volume, plant stem cells to reduce fine lines and preserve the longevity of skin stem cells, and telomere DNA, which neutralizes multiple factors of aging.
“These ingredients are becoming popular because the consumer sees results and the latest packaging and delivery systems makes these brands attractive to the consumer,” Mancini says.
High-tech ingredients such as plant stem cells, superfruits (such as cranberry, pomegranate and acai berry), and rainforest oils such as jojoba, argan, and tamanu have appeared in hair care and personal care products for quite some time. Sarah Bumby, vice president for First Impact New York, says the color cosmetic segment is on-trend and starting to incorporate these same materials into their products as well.
“It’s more difficult to integrate these ingredients into color cosmetics, but color companies will strategically use the ingredient in an amount that will allow them to keep it at the same price point in the end,” she says. “People want to feel good about their lipstick or blush and the ingredients in it, but formula stability is first and foremost.”
COLOR AND PERFORMANCE
Mintel data show that sales of color cosmetics overall increased 3.5 percent in 2012, suggesting a “return to prestige purchases, as well as shopping for cosmetics at a wider range of retailers,” though “consumers are being selective in how they opt to spend their cosmetics dollars.”
Lip makeup overall experienced the largest sales growth in the past year, increasing 5.7 percent, with eye makeup following close behind with a 3.8 percent increase. In both segments, manufacturers increased product appeal by concentrating on new formulations promising longer lasting color and wear, plus added functionality such as moisturizers and SPF.
Sales of private label nail color were up a healthy 16.34 percent. Antinelli believes this increase was in part because of the introduction of gels and decals to the segment, but also to the fact that women can express themselves with their nail color.
“A woman can wear an outrageous shade of polish, if not on her fingernails, then on her toes, and she’s making a statement,” Antinelli says. “Additionally, women
are very careful about what they put on their skin. An unknown brand of blush or foundation could be risky, but an unknown brand of nail polish, especially in the right color, is just plain fun.”
Color pallets are important, Bumby says.
“Everything cycles. One of the hot colors for this fall is denim, in nail color, in eye shadow,” she says. “Everything comes back around. Eggplant and emerald are hot colors now. Five years ago it was camel, café, beige. Orange is out, but two years ago it was in. Ten years from now it will be back again.”
Antinelli says that a wide range of color in the category is “essential.”
“As manufacturers, we must stay on target with the fashion industry to bring these seasonal shades to market in a timely manner,” she says.
GET THE LOOK, GET THE BUYER
Mintel’s reports says that younger cosmetic wearers were the most influenced by new products or brands in the category, “underlying the need for manufacturers and marketers to use a multifaceted approach when targeting this cosmetically engaged demographic.”
One means of getting the attention of the younger cosmetics buyer is through innovative packaging that not only looks good, but also adds value or function to the product.
“Airless packaging is the latest innovation because it maintains the integrity of the product, protects the product from germs and oxidation, extends shelf life, retains product efficacy, dispenses the product with precision and uses the entire product,” Mancini says.
“A lot of companies have gone to tubes and clicky-pens because it’s sanitary,” Bumby says. “You’re not putting your fingers in the product which keeps the integrity of the product longer. We’re seeing a lot of airlift pumps, angle tips, dome tips with roller balls to facilitate creative dispensing.”
Perceived value is an important consideration, as well.
“Packaging has trended towards two-in-one lipsticks and eye shadows because the consumer wants value in their product,” Young says. “Duos, packs, kits, anything that offers an added benefit in your packaging.”
Influencing consumers on their product purchases is a matter of allowing shoppers to try before they buy, according to Mintel’s report. Free samples allow consumers a no-risk experience to try new or lesser-known products. “The fact that 81 percent of respondents cite a free sample as influential when trying a new makeup product or brand underscores the importance of this type of initiative for manufacturers,” the report says.
Beauty box suggestions were cited by 27 percent of respondents, and provide manufacturers with an eager audience of early adopters.
“Providing products for bloggers and beauty editors to try with the hopes that they will write about it will also be a way to attract attention,” Mintel suggests.
Ultimately, it’s about staying on top of rapidly changing trends in style and fashion.
“If you become stagnant and haven’t introduced something in a new way or upgraded the packaging for your product, the consumer will get tired,” Young says.
“Be innovative with ingredients, packaging and delivery systems and pay close attention to unique product merchandising,” Mancini adds.