While macroeconomic concerns remain, retailers, brand executives and analysts expect a bright outlook for the mass beauty market in 2023.
Mass beauty retailers are finding new differentiation strategies, changes in consumer behavior due to economic uncertainty can also be opportunities for growth, and beauty manufacturers are seeing growth momentum across all of their categories.
"The mass market is in a very interesting position," said Wendy Liebmann, CEO and retail analyst at WSL Strategic Retail, who said that while the broader environment of the recession will certainly affect consumer spending, brands and retailers will benefit — as long as they respond with the right strategy.
Liebmann believes that in the wake of the recession, "people who have been buying high-end or luxury products will choose to pay in installments or look for more affordable prices, but we can't just think that there are many ways to save money." She also points to multiple price options and avoiding excessive promotions as key to driving foot traffic and store sales.
"Retail stores with more affordable pricing must be aware of the need to provide customers with more shopping options. This space needs some very elaborate and 'smart' marketing that allows beauty consumers to have different options so that retailers can gain a foothold in the market. "Whether it's at Target or Walmart, whether it's buying beauty products through pharmacy channels or buying from store channels, we see the need and urgency for differentiation, and retailers are really coming up with different solutions." ”
Ulta Beauty, for example, reinvented its store layout based on price points and categories. The fundamental reason for the retailer's change of model is to cater to customers who have a more diverse choice of shopping channels in the post-pandemic era.
Maria Salcedo, Senior Vice President of Merchandise at Ulta Beauty, said: "The shopping journey for Ulta Beauty customers is not fixed, so our unique business model is able to appeal to today's beauty consumers. For customers, it's a beauty playground where they can explore categories, feel different brands and products, and get inspired by them. ”
Dave Kimbell, CEO of Ulta Beauty, also said: "No matter what price point our customers choose, we are uniquely positioned to provide them with products and services. ”
Drug stores are also beginning to introduce more positioned brands, CVS is involved in luxury beauty through its "skin care center", and brands such as Wander beauty, Bloom and Volition beauty are on CVS's shelves; Kohl's and Target, which mainly target the middle-income group, have also partnered with Sephora and Ulta, respectively, to provide consumers with higher-end beauty products, and Walmart has also partnered with Space NK to sell luxury beauty and personal care brands such as By Terry and Philip B through store-in-shop in supermarkets.
Andrea Harrison, vice president of beauty and personal care at CVS, said the "Skin Care Center" is the first step towards positioning its selection as luxury, but also provides options that reduce the burden on the wallet for consumption.
In Ulta's Q3 2022 earnings call, Kimbell mentioned that "mass brands are growing slightly faster than luxury beauty brands." He also attributed the increase in consumer engagement to new products launched by brands such as E.L.F, NYX, The Ordinary, CeraVe, and others.
Salcedo adds, "Consumers love the versatility and flexibility that Volkswagen brands offer. Beauty is a category that allows people to express and experiment, and mass brands can allow consumers to explore and discover new products more at affordable prices. ”
"I've been bullish on mass beauty products for a long time, even during the pandemic, even when it was very difficult to sell makeup because people were restricted," said Tarang Amin, CEO of E.L.F Beauty. He said E.L.F. has achieved 15 consecutive quarters of net sales growth and is expanding its market share in skincare and color cosmetics.
Stefano Curti, chief brand officer at Coty Volkswagen Beauty, said at the beginning of the year that the market share of Coty Volkswagen's beauty business has also continued to grow over the past 11 months, "Our primary goal is to continue to drive market share growth. To achieve this, we will consolidate the progress we have made and expand our mass brand into new areas such as skincare. ”
According to L'Oréal's just-released 2022 financial data, the growth rate of the mass cosmetics division reached 14.6%, and the company's president of the North American mass cosmetics division, Nathalie Gerschtein, said the growth was due to "a good integration of innovation in this year's products and a good recovery momentum in the market." ”
Empowering data is also one of Gerschtein's goals, she says, "The data-driven consumer-centric strategy has always been a great focus for us, and we will continue to build on that strength. ”
Gerschtein expects cosmetics sales to exceed pre-pandemic levels this year, and boosting their growth is her top priority. "Consumers, especially those who are young, are very interested in trying new looks with cosmetics and are getting bolder."
"The second most important thing is the skincare area. It's clear that ingredients and science-backed efficacy are becoming more important, skincare consumers want to buy products that help them with their skin problems, and people don't want to spend money on things that don't work for them," Gerschtein continues, "You'll find that they're focusing more on reviews and tutorials, while consumers are looking for versatile products to reduce their expenses." ”
Unilever has also invested its R&D efforts in skincare. Esi Eggleston Bracey, CEO of Unilever USA and President of Personal Care North America, said: "For the first time in 17 years, Dove Shower Gel will completely revamp the look and feel of the product itself. The new product uses revolutionary, patented nanotechnology that allows millions of microdroplets to be absorbed by the skin, activating the skin's moisture barrier and keeping the skin clean and healthy for 24 hours. ”
Bracey also said that Dove is the most recommended bath brand for dermatologists. This credibility is becoming increasingly important to consumers.
Cara Sabin, CEO of Unilever's North American Beauty and Health division and Sundial brand, added: "People are looking for efficient, value-for-money products, blurring the lines between mass beauty brands and luxury beauty brands. This is partly due to the growing number of trusted experts, such as dermatologists and 'skincare enthusiasts' on social media, who are knowledgeable about the active ingredients, skincare benefits and results-oriented use of products. ”WWD
Written by Editorial Office
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