Data / Categories / Channels / Cosmetics / Omnichannel / Trend Features / Tactics

Bright Spots in Store Brand Cosmetics

Points of struggle and strength avail themselves in cosmetics

June 30, 2014
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As private label struggles to gain traction in the cosmetics category, retailers are offering high-functioning and distinctive store brand products to remain

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Private label brand cosmetics

competitive. In a setting where consumers have an widening variety of retail channels to shop, overall cosmetics category sales were sluggish, with face and eye growing only about one percent (up 1.0 and 1.6 percent, respectively) in dollar sales, while lip cosmetic sales were flat (-0.6 percent) for the 52 weeks ending April 20, 2014 according to data from IRI.

Although overall sales were relatively weak, some private label segments are experiencing exciting growth.


Channel Competition Intensifies

Mobile shopping has increased competition, especially with the elimination of shipping charges for most beauty purchases over a certain minimum, coupled with shoppers feeling more comfortable making online beauty purchases.

But there are still opportunities for store brands. October 2013 M/A/R/C research by the Integer Group shows that 48 percent of shoppers say “a convenient location” is the top factor in where they shop for beauty products. They seek out a wide selection and variety of products at the lowest prices. Respondents to their study say they conduct ongoing research of the category online in a recreational mindset, but 83 percent head straight to the store when they need to make a purchase.


Opportunities in Face Makeup

In face cosmetics, private label foundation sales doubled from year ago, and concealers were up 37 percent, as new products and innovative ingredients brought excitement to the category.

“The ethnic opportunity is huge. The broad spectrum of skin colors emerging from blended families makes it difficult to find perfect shade,” said Rhonda Schaffer, national sales and marketing manager at Colorlab Cosmetics, Inc.

A January 2008 study published in the Journal of the American Academy of Dermatology shows 50 percent of women over 25 years of age have at least some facial acne. As many women are still dealing with acne long after their teens, “concealers blend easily and cover those scars and marks,” said Ivonne Ruggles, owner and president of Contemporary Cosmetics Group.


Colors Set the Tone

“The Pantone color of the year is the driving force in color trends,” notes Schaffer. “We had our Great Gatsby (darker) shades for winter, but our summer line is focused on Calypso (coral), Bahama Mama (rose), and South Beach (pink) shades for nails, with coral for lipsticks—light beachy colors,” said Ruggles.

Although the overall lip category trends were flat, private label lipstick sales doubled compared to a year ago, up 147.78 percent, per IRI. “Brights, blues, greens, yellow, aqua, and black are trendy lipsticks for teens and the ethnic markets,” said Schaffer.

“Color is very important in the artistry of makeup application,” said Ruggles. “We enthusiastically await Pantone’s release of the new color of the year, and they did not disappoint with this year’s Radiant Orchid. Purple is a color that complements all skin tones.”


Tough As Nails

After years of stellar growth, sales have begun to moderate in the nail category, and will to continue to slow through 2018, according to the January 2014 “Nail Color and Care—U.S.” report from Mintel, due to an increasingly saturated product landscape combined with the competitive threat posed by salon nail services.

IRI data shows overall category nail sales were off for the past 52 weeks, down 5.57 percent in unit share and 3.97 percent in dollar share. The data further reveals that nail cosmetics is the only cosmetics segment where private label has any significant share of the category. It’s also the lowest priced segment in cosmetics, at an average unit price of $3.34. With store brands price discounts highest in this segment, private label has many opportunities to compete.

The bright spot: Nail treatments continue to post solid gains, up 54.4 percent, according to IRI data. In-store and online tools that help women achieve salon-quality results at home could help counter some of the competition posed by professional nail services. Another positive: ethnic market growth. Hispanic women are highly engaged in the nail category, especially when it comes to trend-driven services such as nail art. Young women are seeking information and customized products, while older women concerned about nail health, according to Mintel.

Schaffer agrees: “Now pedicures are not optional—almost everyone does their nails. It’s considered an essential.”


Vegan Lines to the Fore

“There are two sorts of anti-aging consumers. One kind of consumer does Botox, the other does organic and natural, focusing on back to nature. It’s two different markets, two different audiences,” stated Ruggles.

But the organic market is transcending beyond mere natural ingredients. New combinations of exotic ingredients, veganism and other trends are newly emerging, according to the October 2013 Kline Group report, “Natural Personal Care: Global Market Analysis and Opportunities.” The natural cosmetics market is dominated by new launches of full product lines based on certified argan oil, açaí berry, pomegranate and calendula, among others. “These industry developments have positively affected the sales growth of the mature natural cosmetic markets in the United States, which increased 7.7 percent in 2013.”Oils are back again,” said Ruggles. “For a while, consumers did not want oils in cosmetics, but now it’s popular once more. We offer argan oil in our line.” Use of argan oil in cosmetics has skyrocketed in recent years.

While vegan foods are snatched up in food stores, they are also gaining attention in cosmetics. Vital to the vegan lifestyle is the commitment to not wear, eat or use anything that exploits animals. “We offer ingredient based lines that are gluten-free, fragrance-free and cruelty-free,” noted Schaffer, adding that “80 percent of our line is vegan.”

The Bottom Line

• Meet the needs of ethnic shoppers

• Keep colors current

 • Oils make a comeback 

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