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Beauty Retailing - US - September 2017

"Beauty retail is big business, garnering sales in the range of $55 billion this year. Massive transformation is occurring as the youngest generations drive the future of the market. In-store shopping and buying is strongly preferred over online due in part to specialty beauty retailers luring in customers to immerse themselves in the beauty world, surrounded by technology to enhance their experiences. However, e-commerce will only continue to account for a larger share of total sales with mobile sales fueling this growth while Amazon continues to make inroads. Retailers need to be up on the latest beauty trends such as interest in natural products and simplified routines as well as demands relative to how consumers want to shop the category. This will require the ability to be nimble to keep up with the cyclical nature of some trend-driven beauty segments while also maintaining restraint to stay focused on long-term strategies to drive business."

- Diana Smith, Associate Director - Retail & Apparel

This report will look at the following areas:

  • Slow growth expected for the future
  • A whole new retail landscape
  • Role of sales associate evolves

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Slow growth expected for the future
            • Figure 1: Total US sales and fan chart forecast of beauty products, at current prices, 2011-22
          • A whole new retail landscape
            • Figure 2: Retailers shopped, by age, May 2017
          • Role of sales associate evolves
            • Figure 3: Attitudes regarding sales associates, by select generations, May 2017
          • The opportunities
            • It’s all about the experience
              • Figure 4: Method of shopping, May 2017
              • Figure 5: Interest in retail services, by select generations, May 2017
            • Stay ahead of social media trends
              • Figure 6: Attitudes and behaviors toward social media, by select generations, May 2017
            • Invest in e-commerce and technology
              • Figure 7: Attitudes and behaviors toward mobile technology, May 2017
            • What it means
            • The Market – What You Need to Know

              • Continued slow growth expected
                • Top three categories account for nearly half of sales
                  • Top categories mitigate losses from smaller categories
                    • Multicultural population benefits market
                    • Market Size and Forecast

                      • Consistent and steady sales pattern
                        • Figure 8: Total US sales and fan chart forecast of beauty products, at current prices, 2011-22
                        • Figure 9: Total US retail sales and forecast of beauty products, at current prices, 2012-22
                    • Market Breakdown

                        • Share leaders
                          • Color cosmetics sits firmly on top
                            • Fast-growing categories
                              • Body care and sun protection products gain on facial skincare
                                • Facing challenges
                                  • Shaving and hair removal, fragrances, and nail care post sales declines
                                    • Figure 10: Total US retail sales of beauty products, by segment, at current prices, 2015 and 2017
                                  • Seven out of 10 purchases occur outside of supermarkets or drug stores
                                    • Figure 11: Total US retail sales of beauty products, by channel, at current prices, 2012-17
                                • Market Factors

                                  • More buyers in the market bodes well for sales growth
                                    • Figure 12: Female population by age, 2012-22
                                  • Men also play a key role
                                    • Huge multicultural influence
                                      • Figure 13: Population by race and Hispanic origin, 2012-22
                                    • Bright economy should positively impact market
                                      • Positive halo effect from investments in health and wellness
                                        • Channel shifting is occurring as department stores struggle
                                          • Direct sales remain small, but could be a threat in the future
                                            • Figure 14: Direct sales company shoppers – Any shopping, by age and gender, May 2017
                                        • Key Players – What You Need to Know

                                          • Specialty retailers feeling the love
                                            • Department stores playing catch-up
                                              • Why fix what’s working? More tech, tools, automation on the way
                                                • Is Amazon ready to be a prestige beauty seller? Better yet, is prestige beauty ready for Amazon?
                                                • What’s Working?

                                                  • Young women flocking to specialty beauty retailers
                                                    • Figure 15: Specialty beauty retailers shopped, May 2017
                                                  • Ulta company overview
                                                    • Sephora company overview
                                                      • Customer profiles
                                                        • Figure 16: Specialty beauty retailers shopped, by key demographics, May 2017
                                                      • Keys to success
                                                      • What’s Struggling?

                                                        • Department stores bet on beauty for turnaround efforts
                                                        • What’s Next?

                                                          • More tools and tech
                                                            • Figure 17: FaceCake’s Custom Augmented Kinetic Experience tool, March 2016
                                                            • Figure 18: WAH Nails store, UK, December 2016
                                                            • Figure 19: Burt’s Bees Wall of Kisses magic mirror, UK, March 2017
                                                          • New automated salespeople and data-based consultants
                                                            • K-beauty’s influence leading to more retail partnerships
                                                              • Anticipating Amazon’s next move in beauty
                                                              • The Consumer – What You Need to Know

                                                                • Young women buy the most items
                                                                  • Mass merchandisers and drug stores remain top channels shopped
                                                                    • In-store shopping preferred over online
                                                                      • Store and brand familiarity leads to repeat shopping
                                                                        • Social media is a playground for beauty enthusiasts
                                                                        • Who’s Buying?

                                                                            • Nearly a quarter of beauty purchasers are “heavy” buyers
                                                                              • Figure 20: Repertoire of beauty items purchased, May 2017
                                                                            • Young parents are a key target group
                                                                              • Figure 21: Repertoire of 8+ beauty items purchased, by key demographics of heavy buyers, May 2017
                                                                              • Figure 22: Amount spent by category, January 2016-March 2017
                                                                              • Figure 23: Mean spending by category, by key demographics, January 2016-March 2017
                                                                            • In their words: interest in beauty products
                                                                            • Retailers Shopped

                                                                                • Specialty stores reign in traffic
                                                                                  • Figure 24: Retailers shopped, May 2017
                                                                                • Subscription services fail to scale audiences
                                                                                  • In their words: subscription services
                                                                                    • Men more likely to grab-and-go while women seek options
                                                                                      • Figure 25: Retailers shopped, by gender, May 2017
                                                                                    • Retailers need to remain mindful of multicultural customer base
                                                                                      • Figure 26: Retailers shopped, by race and Hispanic origin, May 2017
                                                                                    • Drug and mass channels make big changes to retain core customers
                                                                                      • Figure 27: Retailers shopped, by age, May 2017
                                                                                    • In their words: where they shop and why
                                                                                    • Method of Shopping

                                                                                        • In-store shopping remains valuable
                                                                                          • Figure 28: Method of shopping, May 2017
                                                                                        • In-store shopping incidence rises with age
                                                                                          • Figure 29: Method of shopping, by generation, May 2017
                                                                                        • Online shopping rates expected to rise
                                                                                          • Figure 30: Frequency of buying items online, May 2017
                                                                                        • What can retailers do to improve loyalty of online shoppers?
                                                                                          • Figure 31: Attitudes toward online shopping, by select ages and household incomes, March 2017
                                                                                        • In their words: in-store influencers and online product preferences
                                                                                        • Items Purchased

                                                                                            • Grooming staples purchased by majority
                                                                                              • Figure 32: Items purchased, March 2017
                                                                                            • Higher overlap between less-involved product categories and mass retailers
                                                                                              • Figure 33: Items purchased, by retailers shopped, May 2017 – Part one
                                                                                              • Figure 34: Items purchased, by retailers shopped, May 2017 – Part two
                                                                                            • Men remain important to the category
                                                                                              • Figure 35: Items purchased, by gender, May 2017
                                                                                          • Attitudes and Behaviors Toward Shopping

                                                                                              • Robotic shopping behavior presents challenge for brands
                                                                                                • Figure 36: Routines versus experimentation, by age, May 2017
                                                                                              • In their words: impulse versus planned purchases
                                                                                                • Understanding purchase drivers can help brands reach new audiences
                                                                                                  • Figure 37: Purchase drivers, by gender and age, May 2017
                                                                                                • In their words: importance of vegan, natural, and/or organic products
                                                                                                • Attitudes and Behaviors Toward Mobile Technology

                                                                                                    • Mobile momentum continues
                                                                                                      • Figure 38: Attitudes and behaviors toward mobile technology, May 2017
                                                                                                    • Four in 10 would rather talk to their mobile device than a salesperson
                                                                                                      • Figure 39: Attitudes and behaviors toward mobile technology, by gender, May 2017
                                                                                                    • Many available mobile moments to connect with multicultural consumers
                                                                                                      • Figure 40: Select attitudes and behaviors toward mobile technology, by race and Hispanic origin, May 2017
                                                                                                    • As category involvement increases, so does digital engagement
                                                                                                      • Figure 41: Select attitudes and behaviors toward mobile technology, by repertoire of beauty items purchased, May 2017
                                                                                                  • Attitudes and Behaviors Toward Social Media

                                                                                                      • Moving at the speed of social media
                                                                                                        • Figure 42: Attitudes and behaviors toward social media, May 2017
                                                                                                        • Figure 43: Attitudes and behaviors toward social media, by select generations, May 2017
                                                                                                        • Figure 44: Attitudes and behaviors toward social media, by gender and age, May 2017
                                                                                                      • Personal recommendations hold weight among iGens and Millennials
                                                                                                        • Figure 45: Purchase drivers – Any rank (net), by all women and Millennial women, December 2016
                                                                                                      • In their words: influencers
                                                                                                        • Shoppable social media should bring more change
                                                                                                        • Social Media Influencers and Retailer Spotlight

                                                                                                          • Key influencers
                                                                                                            • Instagram
                                                                                                              • YouTube
                                                                                                                • Lifestyle bloggers
                                                                                                                  • Celebrity makeup artists
                                                                                                                    • Brand initiatives
                                                                                                                      • Social media spotlight on specialty retailers
                                                                                                                        • Figure 46: Social audience, July 2016-June 2017
                                                                                                                        • Figure 47: Posts per platform, July 2016-June 2017
                                                                                                                        • Figure 48: Number of engagements, July 2016-June 2017
                                                                                                                        • Figure 49: Ulta Beauty post on Pinterest, February 2017
                                                                                                                        • Figure 50: Ulta Beauty post on Pinterest, March 2017
                                                                                                                        • Figure 51: Sephora post on Pinterest, June 2017
                                                                                                                        • Figure 52: Sephora post regarding Urban Decay news on Instagram, June 2017
                                                                                                                        • Figure 53: Ulta Beauty post regarding Urban Decay news on Instagram, June 2017
                                                                                                                    • Interest in Retail Services

                                                                                                                        • Did someone say free samples and gifts?
                                                                                                                          • Figure 54: Interest in retail services, May 2017
                                                                                                                          • Figure 55: Interest in select retail services, by women 18-34, May 2017
                                                                                                                        • Experiences can draw in multicultural shoppers
                                                                                                                          • Figure 56: Interest in select experiential services, by race and Hispanic origin, May 2017
                                                                                                                        • On-demand delivery not a key driver of store preference
                                                                                                                            • Figure 57: Interest in on-demand delivery, by key demographics, May 2017
                                                                                                                          • TURF analysis provides quantitative support for maximizing reach
                                                                                                                            • Figure 58: TURF analysis – Interest in retail services, May 2017
                                                                                                                          • In their words: “If I was in charge of my own beauty store … ”
                                                                                                                          • Appendix – Data Sources and Abbreviations

                                                                                                                            • Data sources
                                                                                                                              • Sales data
                                                                                                                                • Fan chart forecast
                                                                                                                                  • Consumer survey data
                                                                                                                                    • Consumer qualitative research
                                                                                                                                      • Abbreviations and terms
                                                                                                                                        • Abbreviations
                                                                                                                                          • Terms
                                                                                                                                          • Appendix – The Market

                                                                                                                                              • Figure 59: Total US retail sales and forecast of beauty products, at inflation-adjusted prices, 2012-22
                                                                                                                                              • Figure 60: Male population by age, 2012-22
                                                                                                                                              • Figure 62: Disposable Personal Income change from previous period, January 2007-May 2017
                                                                                                                                              • Figure 63: Median household income, by race and Hispanic origin of householder, 2015
                                                                                                                                          • Appendix – The Consumer

                                                                                                                                              • Figure 64: Amount spent on fragrances, January 2016-March 2017
                                                                                                                                              • Figure 65: Mean spending on fragrances, by key demographics, January 2016-March 2017
                                                                                                                                            • Rival IQ methodology and supporting tables
                                                                                                                                              • Figure 66: Total social audience, by platform, by listed brands, July 2016-June 2017
                                                                                                                                              • Figure 67: Total posts, by platform, by listed brands, July 2016-June 2017
                                                                                                                                            • TURF methodology and supporting tables
                                                                                                                                                • Figure 68: TURF analysis, table – Interest in retail services, May 2017

                                                                                                                                            Companies Covered

                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                            Beauty Retailing - US - September 2017

                                                                                                                                            US $3,995.00 (Excl.Tax)