Cosmetics – UK

January 2014
Market overview
• Despite the ongoing economic doom and gloom that has hit UK households in recent
years, spending on cosmetics and fragrances has continued to observe year-on-year
increases since at least 2008, with total market value to have risen by 25.6% over the
past 5 years.
• The fact that many consumers now consider both cosmetic and fragrance products to
be essential, everyday items is likely to have boosted spending within the market in
recent years, with many analysts suggesting that it could even be considered
recession-proof.
• In addition, the market has remained noticeably unaffected by trends towards
discount and value items, which has impacted other market sectors, such as clothing
for example, by eroding market value to a certain extent, with buyers keen to obtain
products for the cheapest price possible due to financial constraints.
• The brand strength of cosmetics and fragrances has played a key part in this, with
consumers still favouring well-established premium brands, such as Estée Lauder, Dior
and Chanel, and many prepared to pay that ‘extra bit’ to obtain higher quality goods.
• Other major trends that have had an impact on the market in recent years include the
interest in ethical and natural cosmetics, as well as male grooming ranges, nail
products and luxury brands.
Market sector
• Facial make-up represented the largest share of the UK
cosmetics sector in 2012, accounting for 39% of total market
value and generating sales of £546m.
• Eye make-up represented the second-largest subsector,
accounting for 32.5% of the cosmetics sector, followed by lip
products (16.5%) and nail products (12%).
Face make-up
• Sales of facial cosmetics have continued to increase over the past year, albeit at a
relatively slow rate of 2.6%, up from £532.2m in 2011.
• Consumer demand for facial make-up remains high, with many users viewing such items
as essential, everyday products. This has in turn ensured that product purchases remain
at a relatively consistent level, as consumers seek to maintain stocks of their favourite
items.
• In addition, many consumers prefer to own a wide range of facial cosmetics. As such,
new product development has remained a key feature of the industry, with retailers
vying to tempt new consumers through the introduction of new variants.
• Recent trends within this subsector of the market have focused on skincare, with
considerable media attention and marketing activities undertaken in order to highlight
the importance of maintaining healthy skin and a healthy complexion, while also
prolonging a youthful appearance.
• Premium facial make-up products and skincare remedies have also continued to achieve
growth in recent years despite the ongoing economic pressures affecting consumer
spending in the UK. This is mainly down to the strong presence of well-known brands,
such as L’Oréal, Dior, Clarins and Clinique, within this subsector, with consumers often
willing to pay a higher price in order to purchase items they feel will achieve the best
cosmetic results.
25-39 buying habits

• 60% of 25-39 years olds buy a mixture of premium and ‘normal’ products. This reflects the
growing disposable income that this age bracket are earning and willing to spend on health and
beauty products.
• Of all the different levels of product, premium beauty is seemingly suffering the most. However,
among other demographics only the over-55s are spending more on premium products than 25-
39 year olds.
• 25-39s have the highest purchasing power of ‘normal’ brands such as Nivea and Simple of all age
ranges in the YouGov survey (16-24, 40-54, 55+)
• One in five women believe that premium make-up lasts longer. It is women aged 25-39 who tend
to be of this opinion.
Most popular brands
Most popular brands
• The make-up brands with the highest penetration are available in wide
distribution and are supported heavily with advertising. They include Boots No7,
Rimmel, Maybelline, Avon and L’Oréal Paris.
• Another reason why penetration is high among these brands is that they are used
by women of all ages. Several other make-up brands are skewed towards a
particular age group and fail to connect with women across the board, e.g.
Revlon, Collection 2000, Clarins and Lancôme.
• Price is a deterrent when it comes to premium brands, which generally have low
penetration. The exception is Clinique, which has an active promotional
programme of GWPs, called Bonus Time, making it more affordable than other
premium brands.
• Women under 24 are more inclined to go for cheaper brands, such as Rimmel,
Barry M and Collection 2000. A low price point allows them to indulge a love of
fashion-oriented shades without pressure on their purse.
• Women over 55 are more likely to buy premium brands, such as Estée Lauder,
Lancôme and Clarins. All three have a strong foundation business based around
anti-ageing product claims.
Make-up benefits looked for
• Most women choose make-up designed to enhance their natural colouring,
rather than strike out with products that are meant to be fashionable. Like with
fashion and clothing, the majority of women prefer to tread the middle ground,
rather than draw attention to themselves.
• Most 25-39 year-olds look for good coverage and staying power, possibly
reflecting their busy lives with careers/young children and lack of time to re-apply
make-up throughout the day.
Trends – Anti-Ageing
• Recent years have seen the anti-ageing skincare sector continue to benefit from
increased investment and product innovation, with demand for such products at
an all-time high due to the UK’s ageing population. Recent activity within the
anti-ageing subsector has focused on both premium and preventative products.
• The growth in premium anti-ageing skincare products is thought to have
boosted overall sales within the sector in recent years, with a 6% year-on-year
increase witnessed across the total anti-ageing category over the past year. The
rise in premium anti-ageing products follows increased demand from the UK’s
ageing population, whom also happen to be the category of consumers with the
largest disposable income, as well as a rise in media attention focused on the
importance of maintaining a ‘youthful appearance’ for as long as possible.
• Another growing trend within the anti-ageing sector has been preventative
treatments, with many manufacturers seeking to target younger age groups,
such as older young adults (those aged 25 to 34 years old) and pre-mid-lifers
(those aged 35 to 44 years old), a growing proportion of whom are now seeking
preventative skincare products in order to avoid premature ageing.
Ethical and natural
• Increased concern regarding the environmental effects of manufacturing goods, as well as
the sustainable and ethical policies employed by manufacturers, has led to increased
demand for natural and ethically sourced cosmetics in recent years. As a result, a number
of beauty firms have expanded their interests in this particular area of the market.
• In addition, recent years have seen private-label manufacturers develop their own private-
label ranges using natural and ethically-sourced ingredients.
• According to figures compiled by The Co-operative Group for its Ethical Consumer Markets
Report 2012, ethically-produced cosmetics observed a 7.2% growth in 2011, with figures
rising from £528m in 2010 to £566m — with this up by 223.4% from £175m in 2000,
reflecting the heightened level of product innovation and new product development (NPD)
activity that has characterised this sector over the past decade or so.
• In addition, organic health and beauty products observed a 5.6% increase to £31.8m in
2013, according to the Soil Association’s 2013 Organic Market Report, and represented
one of the few sectors within the UK organic market to observe growth over the past year.
How women shop for cosmetics
• Consumers’ habits when buying health and beauty products depend mostly on what
they need or want to buy at the time. Very few say they incorporate a health and
beauty shop with a clothes shop, supporting the finding that women generally prefer
to shop alone for health and beauty products.
Path to purchase
• Women use health and beauty products to make themselves look and feel better.
• Most women replace items as and when they have run out, making impulse purchases less
often.
• Beauty enthusiasts will go shopping specifically for health and beauty products.
• Most women prefer to shop alone when purchasing health and beauty products.
• Satisfaction and excitement are the two key feelings women have when they purchase
health and beauty products.
• Recommendations from friends and family are a key influence on purchase. Similarly, poor
recommendations can be very damaging for brands.
• The familiar is also an important influence, with a lot of women using products and/or
brands that they have used before.
• Claims are not considered to be very influential, unless one falls into the beauty enthusiast
category.
• There is hope for print media, which has suffered in recent years – with advice, tips and
advertising all cited as being important to women when deciding on what health and
beauty products to buy.
Natural most popular
• The natural look is popular with women of all ages and explains why
nude/neutral colours are so prominent within most make-up ranges.
• Most women do not want to draw attention to themselves through make-
up, but want to project a natural appearance. As make-up artist Bobbi
Brown famously said: “women want to look like themselves, only prettier.”
How make-up makes women feel
• Make-up becomes far less important as women age and helps explain
why some older women do not use make-up. They could feel more
comfortable in their own skin or simply have lost the knack of using
make-up. Either way, they are a forgotten demographic as far as most
make-up brands are concerned.
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