The U.S. prestige beauty [1] industry reached US$11.2 billion and grew 3 per cent in dollar sales in 2014, compared to 2013, according to global information company The NPD Group, Inc. Makeup experienced the healthiest gain, 6 per cent, while fragrance dollars grew 2 per cent and skincare increased by 1 per cent.

Over the full year, North America proved much more dynamic than Western Europe, with the exception of the United Kingdom.

Innovation driven market

Prestige makeup, skincare, and fragrance in the U.S. all experienced 2 to 4 per cent growth in average price. The lip segment was key to makeup’s growth, driven by lip colour. Of the top 100 new shades on counter in 2014, pink surpassed red as the leading colour, bringing in 23 per cent more dollars. Sets and kits drove the growth for skincare, with anti-aging sets serving as the catalyst. Juices experienced the largest increase for women’s fragrance, while for men it was gift sets.

Beauty is an industry where consumers are willing to spend, and where the majority of them - more than 80 per cent of U.S. women alone - invest,” said Karen Grant, global beauty industry analyst, The NPD Group. “While there is brand loyalty, consumers at the same time are always on the hunt for products that will perform better, and are willing to add to their routine if a product proves worthwhile. The industry is at an advantage in the U.S., a crossroads, where world beauty comes together in one place, and the innovation and types of products that connect with consumers, and satisfy their needs and desires, show themselves in a natural light.

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Sense of experience

The growth of the U.S. prestige market outpaced the mass [2] channel, where sales remained flat for total beauty in 2014, versus 2013, as per Nielsen. The skincare category, with 2 per cent growth, buoyed the overall mass market, while fragrance and makeup experienced dollar declines, by 4 per cent and 1 per cent, respectively.

The beauty industry had a solid annual performance in a somewhat difficult retail environment, but there’s still plenty of room for improvement and development,” added Karen Grant. “We saw that fewer consumers, especially beauty shoppers, cut spending in 2014. At the same time, 2014 reported the fewest number shopping for beauty in six years. This tells me that beauty shoppers are happy, but some may be seeking happiness elsewhere. This ‘elsewhere’ is in other products and services, as well as experiences; consumers today are not just pursuing ‘products for me,’ so much as they are seeking ‘experiences for us.’ The challenge for the beauty industry, therefore, doesn’t lie solely in the products, but in fulfilling this sense of experience, and having both play together in harmony.