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- Private Label Beauty - US - May 2011
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This market research report looks at the private label color cosmetic and beauty market in the US. It includes eye, lip and face makeup. The major challenge facing retailers is the consumers’ wariness of unfamiliar brands which has ultimately led to a decline in sales despite the promising forecasts made by retailers in the mid-2000s.
The recession seemed likely to inspire private label sales, and indeed other private label CPG (consumer packaged goods) products did see a boost. This was not the case for private label beauty products. However, private label eye color cosmetic products are thriving and the larger speciality chains have succeeded in encouraging consumer trust in the higher-end private label brands.
Some factors covered in this report include:
- What is the role of opening price point for private versus upscale labels.
- Why do consumers decide whether or not to go for private label color cosmetics?
- How can private label cosmetic retailers encourage sales?
- Which private label brands in the color cosmetic market are favourable and successful and which are not.
- Is it better to build a brand from scratch or go for retail direct licensing.
- What consumer segments are likely to go for what type of promotion?
Scope and Themes
What you need to know
Definition
Data sources and methodology
Consumer survey data
Interview sources
Abbreviations
Terms
Executive Summary
Market factors impact discretionary purchases of color cosmetics
Specialty stores, Avon, and Mary Kay lead private label market
Name brands trump private labels
Marketing private label color cosmetics
Shoppers’ color cosmetic purchasing patterns, attitudes, and influences
Purchase factors by race/Hispanic origin
Insights and Opportunities
Hispanics will buy private label
Figure 1: Reaction to reading online articles that contain brand information, by key demographics, March 2010
Inspire Insights
Trend: Extend My Brand
Market Factors
Consumer confidence declines amidst low expectations
Almost one in nine still jobless
Figure 2: Unemployment rate, by adults aged 16+, January 2001–March 2011
Figure 3: Number of unemployed adults aged 16+, January 2001–March 2011
Foreclosures decline
Gas prices skyrocket
Figure 4: Average gas prices, by state, April 15, 2011
Are Chinese-made private labels toxic?
Kohl and lipstick get the lead out
Prominent U.S. national brands contain lead
Import refusals from multiple countries
The pros and cons of retail direct
Introductions can be cost-prohibitive
Competitive Context
P&G fights private label
Retail Channels
Key points
A limited market
Private label alternatives from drug stores
Walgreens
Walmart’s Hard Candy and GeoGirl
Target embraces makeup artists
Beauty is limited in grocery
National Brands Versus Private Label
Tough competition
Eye Makeup
Thicker lashes
Lip Makeup
Not all of these lips are smiling
Face Makeup
Facing price point reality
Specialty, Department Store, and Direct-to-Consumer
Department stores
Beauty specialty stores
Sephora
Ulta
Inglot
Apparel and other fashion retailers
Victoria’s Secret
Topshop
Payless Shoe Source
H&M
Forever 21
Icing Stores (Claire’s)
Ardene
Direct sellers
Avon’s new products
Innovation and Innovators
Joe Fresh could usurp youth-directed private brands
Figure 5: Joe Fresh Facebook ad, 2011
Marketing Strategies
Figure 6: Sonia Kashuk ad, 2011
Sephora
Figure 7: Sephora’s ad for its makeup forever private label, 2011
Ulta
Topshop
Figure 8: Topshop’s New York City ad, 2009
Joe Fresh
Color Cosmetics Purchasing Patterns
Key points
Young women experiment with private label over past four months
Figure 9: Cosmetic products purchased in the past four months, by age, January 2011
Figure 10: Cosmetics products purchased in the past four months, by household income, January 2011
Historical private label purchasing patterns
Figure 11: Incidence of ever having purchased private label/store brand cosmetics, by age, January 2011
Figure 12: Incidence of having ever purchased private label/store brand cosmetics, by household income, January 2011
Retail Channels Shopped for Private Label Brands
Key points
The power of specialty chains
Eye makeup can be less SKU intensive
Exclusives are often confused with private labels
Figure 13: Store brand cosmetics purchased by type and retail channel, January 2011
Figure 14: Channel average purchases of store brand cosmetics, by age, January 2011
Figure 15: Channel average purchases of store brand cosmetics, by household income, January 2011
Opinions on Store Brand Color Cosmetics
Key points
The threat of inferior ingredients
Figure 16: Opinions regarding store brand cosmetics, by age, January 2011
Figure 17: Opinions regarding store brand cosmetics, by household income, January 2011
Reasons For Initial Purchase
Key points
“Sideways” syndrome
Figure 18: Motivating factors for private label cosmetics trial, by age, January 2011
Figure 19: Motivating factors for private label cosmetics trial, by household income, January 2011
Future Purchasing Plans
Key points
Figure 20: Future cosmetic purchasing plans, by age, January 2011
Figure 21: Future cosmetic purchasing plans, by household income, January 2011
Reasons for Not Buying Private Label Color Cosmetics
Key points
Shoppers’ definition of private label
Figure 22: Reasons for not buying private label cosmetics, by age, January 2011
Figure 23: Reasons for not buying private label cosmetics, by household income, January 2011
Impact of Race/Hispanic Origin
Key points
Blacks and Hispanics love beauty
Figure 24: Cosmetics products purchased in the past four months, by race/Hispanic origin, January 2011
Blacks most likely to have ever purchased private label cosmetics
Figure 25: Incidence of ever having purchased private label/store brand cosmetics, by race/Hispanic origin, January 2011
Blacks shop specialty chains
Cherry picking private label
Figure 26: Opinions regarding store brand cosmetics, by race/Hispanic origin, January 2011
Continuing to purchase private labels
Figure 27: Future cosmetic purchasing plans, by race/Hispanic origin, January 2011
Hispanics’ brand loyalty
Figure 28: Reasons for not buying private label cosmetics, by race/Hispanic origin, January 2011
Cluster Analysis
Cosmetic Queens
Demographics
Characteristics
Opportunity
Private Label Concerned
Demographics
Characteristics
Opportunity
Unconcerned Conservatives
Demographics
Characteristics
Opportunity
Characteristic tables
Figure 29: Private label beauty clusters, January 2011
Figure 30: Color cosmetic purchases in the past four months, by private label beauty clusters, January 2011
Figure 31: Opinions regarding store brand cosmetics, by private label beauty clusters, January 2011
Figure 32: Reasons for initial private label purchase, by private label beauty clusters, January 2011
Figure 33: Future private label purchasing plans, by private label beauty clusters, January 2011
Demographic tables
Figure 34: Private label beauty clusters, by age, January 2011
Figure 35: Private label beauty clusters, by household income, January 2011
Figure 36: Private label beauty clusters, by race, January 2011
Figure 37: Private label beauty clusters, by Hispanic origin, January 2011
Cluster methodology
Appendix—Trade Associations
- Abercrombie & Fitch Co
- American Automobile Association (AAA)
- Avon
- Avon USA
- Dolce & Gabbana
- Food and Drug Administration
- Independent Cosmetic Manufacturers and Distributors Inc. (ICMAD)
- J C Penney Company, Inc
- L'Oréal USA
- Mary Kay Inc.
- Max Factor
- National Cosmetology Association (NCA)
- Neutrogena Corporation
- Personal Care Products Council
- Procter & Gamble Company (The)
- Procter & Gamble USA
- Revlon USA
- Sephora
- Society of Cosmetic Chemists (SCC)
- The Kroger Co.
- Unilever USA
- Victoria's Secret
- Walgreen Co
- Walmart Stores (USA)
- Women's Wear Daily (WWD)
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