After solid performances in 2011 and in the first quarter of 2012, sales of fragrances and skincare products in the UK are experiencing a significant decline in units compared to the same period last year and were respectively down by 0.8% and 6.4%. According to The NPD Group, year-on-year sales on the whole premium beauty market declined by 0.6% in volume, partly explained by retailers offering fewer promotions in 2012 compared to the same period last year. Despite this, the prestige beauty market managed to increase in value by 2.5% to £106 million compared to 2011.
Of the two beauty market categories experiencing a drop in unit sales, skincare has been the worst hit. The NPD Group’s May findings reveal that skincare sales have fallen by 3.9% in value and 6.4% in volume.
Also in decline, the prestige fragrance market is growing in value but sales units are diminishing slightly. According to The NPD Group, “this can be partly explained by the decline in gift set sales: many beauty brands that had developed special offers around Valentine’s and Mother’s Day in 2011 still had the gift sets left by May 2011 and so decided not to repeat this initiative in 2012.”
The make-up segment, where the average selling price is 21% lower than the average selling price of the total prestige beauty market, is the only category to record a strong 9% increase in value compared to last year in the same period.
“The less expensive brands within the prestige beauty market are performing better. In May we saw a new trend emerging - the prestige beauty landscape beginning to shift towards lower price points,” commented June Jensen, Director for NPD Group Beauty UK.
However, events such as the Queen’s jubilee or the Olympics may have a positive impact on sales as they stimulate brands‘ creativity. “Brands are taking new measures to be more creative and innovative in their product promotions, and also to increase further engagement with the customers. This year’s bonanza of once-in-a-lifetime events including The Diamond Jubilee and The Olympics will give beauty brands further opportunities to make their own mark to maximise such special and memorable events,” Jensen added.
Indeed, the skincare and make-up segments were particularly creative around the Diamond Jubilee with multiple launches of products in limited edition including Lancôme serums in limited edition bottles customised with a sceptre or a crown, YSL Swarovski limited edition Union Jack eye palette or OPI Jubilee Collection nail polish in red, blue and white
Some fragrance brands are banking on the Olympics by launching men sport fragrances including Dolce & Gabbana The One Men Sport, Chanel Allure Homme Sport Eau Extreme, or Boss Bottled Sport. Other brands like Thierry Mugler prefer to use famous athletes to promote their fragrances.
Another campaign worth mentioning is the Mascarathon - a run to raise money and awareness for charity Refuge - launched by Benefit Cosmetics.
“The UK is set to enjoy a £750 million [1] consumer spending boost in the weeks leading up to the London 2012 Olympic Games. As every market sector will fight to get a bit of that extra consumer spend, beauty prestige brands should do their utmost to ensure they are well prepared for the excitement of residents and tourists alike, and to make sure they also benefit from that spending boost,” concludes June Jensen.
