Webinar Series. 2 nd Annual COSMETICS Study

Transcription

1 Webinar Series 2 nd Annual COSMETICS Study Wednesday, December 9, 2015

2 METHODOLOGY Survey fielded by Toluna to 1,000 Women November Product Types Purchased (19 total) and Frequency of Purchase Outlets where purchased and purchased regularly Brand awareness, favorability, purchase and regular purchase Promotional tactics used, attitudes towards Cosmetics and Social Media usage. TABS Group Tests and Checks for: Internal Data Validity External Industry Corroboration (correlate data to Market Share, Annual Reports) 2

3 Today We will Review WHO BUYS COSMETICS? WHAT DO THEY BUY? WHERE DO THEY BUY? WHY THEY BUY? YEAR-OVER-YEAR TRENDS IN BEHAVIOR AND ATTITUDES DEFINITIONS Buyer Group Refers to Defined as Light Buyer Total Cosmetics 1-4 Types Purchased Medium Buyer Total Cosmetics 5-9 Types Purchased Heavy Buyer Total Cosmetics 10+ Types Purchased 3

4 WHO IS BUYING? The category took on more consistent patterns in 2015 vs. 2014: Young Women (18-34) are the heaviest buyers and usage increase at the highest income group ($125K+). 4

5 WHAT ARE THEY BUYING? Overall transactions were flat year-to-year, but there were significant sales shifts by segments: more Eye, Lip and Gift; less Face; Nail flat. 5

6 WHAT ARE THEY BUYING? There was a 3 point increase in category penetration (89% vs.86%), with growth coming from Light and Medium buyers. All groups, but particularly Heavy buyers, purchase across numerous brands. Average Average

7 WHAT ARE THEY BUYING? The Top 4 mainstream brands Maybelline, Cover Girl, Revlon and L Oreal are still the most predominant brands on all metrics. The newer Specialty Brands (e.g. Mac, Urban Decay) are closing in on the traditional Super Brands such as Estee Lauder and Clinique. Conversion to Trial Loyalty levels are consistent for all of the Premium/Super-Premium brands. Super-Premium-New converts buyers just as well as the Older SP brands. 7

8 WHERE DO THEY BUY? Within the General Market, there were modest gains in Penetration (+1%) and Regular Purchase (+2%), with Target being the primary recipient of those gains. Outlets without Beauty panache (Walmart, Grocery, and Dollar) all saw declines buyer count. Outlet Penetration % Chg vs. YAG Reg Purch % Chg vs. YAG Stated Loyalty % Chg vs. YAG FDMCD 78% 1% 61% 2% 78% 1% Mass 59% -3% 43% 3% 74% 7% Walmart 44% -11% 32% -5% 73% 7% Target 30% 11% 18% 23% 61% 10% Other Mass 4% 45% 2% 33% 38% -8% Grocery 13% -16% 6% -3% 45% 15% Drug 48% 2% 28% 4% 57% 2% Walgreens 29% 6% 14% -3% 49% -8% CVS 25% 2% 13% -1% 53% -2% Rite Aid 11% 0% 5% -4% 49% -4% Other Drug 1% 140% 0% 200% 25% 25% Club 4% -9% 2% 16% 54% 27% Dollar Store 14% -25% 8% -27% 54% -3% 8

9 WHERE DO THEY BUY? Strongest growth was noted in Specialty Beauty Ulta and Sephora. Declines were noted in Online. This is the 3rd straight TABS Analytics study where Online has been flat or down. Type Penetration % Chg vs. YAG Reg Purch % Chg vs. YAG Stated Loyalty % Chg vs. YAG Non-FDMCD 63% 12% 36% -3% 57% -13% Spec Brick & Mortar 53% 18% 26% -3% 50% -18% Dept Store 32% 56% 18% 54% 55% -1% Macys 17% --- 8% % --- JC Penney 8% --- 4% % --- Kohls 7% --- 4% % --- Nordstrom 7% --- 3% % --- Dillards 5% --- 2% % --- Bloomingdales 3% --- 1% % --- Lord & Taylor 2% --- 1% % --- Saks 1% --- 1% % --- Nieman Marcus 2% --- 1% % --- Belk 2% --- 1% % --- Other Dept Store 3% --- 1% % --- Specialty Beauty 41% 8% 25% 19% 60% 10% Ulta 22% 41% 12% 41% 56% 1% Sephora 23% 25% 13% 32% 57% 5% Sally Beauty 14% -3% 6% 0% 46% 4% Other Spec Bty 3% 10% 1% -41% 31% -47% Spec Discount 6% --- 2% % --- Online 26% -2% 13% -5% 49% -2% Amazon 17% -5% 9% -6% 51% -1% Cosm Web 6% -33% 3% -10% 47% 35% Other Online 9% 93% 3% 8% 30% -44% MLM 9% -21% 4% -14% 48% 10% Other Outlet 1% -36% 1% 0% 86% 57% 9

10 WHERE DO THEY BUY? Specialty Outlets account for just under 50% of transactions but over ½ of dollars due to much higher transaction sizes. Online is 8.3% of transactions and roughly 9-10% of dollars. SHARE OF OUTLET MENTIONS Correlates to Share of Transactions ANNUAL MARKET PROJECTION $13.0B (+5%)* FDMCD 49% SPECIALTY 51% * 2014 Projection calculated FDMCD as 57%, which likely was overstated due to no breakout of Dept Stores. 10

11 CONSUMER Value Study WHY DO THEY BUY? Overall, Social Media is relatively unimportant to Cosmetic Buyers. Among Heavy Buyers, however, (29% of total), Social Media has significant and growing importance in their decision processes. % Saying Social Media Very Important in Helping Determine Which Cosmetics to Buy All Buyers Blogs You Tube Facebook Pinterest Instagram Twitter 6% 9% 11% 11% 10% 9% 15% 16% 14% 16% 13% 15% Any Very Important (All) % % 0% 10% 20% 30% % Saying Social Media Very Important in Helping Determine Which Cosmetics to Buy Heavy Buyers Blogs You Tube Facebook Pinterest Instagram Twitter 19% 15% 12% 13% 17% 20% 20% 19% 0% 20% 29% 29% 28% 24% Any Very Important (Heavy) % % 11

12 WHY DO THEY BUY? EDLP and Shopping for Deals are the most preferred tactics in Cosmetics. Loyalty Card usage grew and outperform Circulars. This differs from the trend in other categories. % of Cosmetics Buyers Using Specific Deal Tactics ACTIVE DEAL TACTICS PASSIVE DEAL TACTICS SHOP FOR DEALS CIRCULARS FSI LOYALTY ONLINE REBATE EDLP PVL PURCH LRG SIZES BONUS/GIFT PK NO DEALS % 43% 36% 37% 36% 35% ACTIVE % Chg +2% 51% 48% PASSIVE % Chg -2% 31% 30% 27% 27% 27% 29% 11% 12% 17% 13% 15% 18% 5% 6%

13 WHY DO THEY BUY? Deal preference still receives the highest agreement among Cosmetic attitudes. Preference for stores with a Beauty Advisor is low, but it grew meaningfully. % of Cosmetics Buyers Agreeing Strongly with Statements Prefer to buy at stores with good deals Keep my Purch within 1 or 2 Brands Spend a lot of time in the Cosm Section Like to Indulge with Expensive Makeup Prefer to buy at stores with Advisor Find Cosm Layout Confusing No Strong Agreement 54% 54% 38% 41% 35% 36% 29% 31% 16% 20% 19% 18% 6% 7%

14 WHY DO THEY BUY? Heavy Buyers are distinguished by the extent to which they linger in the Cosmetics section and buy expensive makeup. They are less brand loyal and more inclined to appreciate Beauty Advisors. % of Cosmetics Buyers Agreeing Strongly with Statements Prefer to buy at stores with good deals Keep my Purch within 1 or 2 Brands Spend a lot of time in the Cosm Section Like to Indulge with Expensive Makeup Prefer to buy at stores with Advisor Find Cosm Layout Confusing No Strong Agreement 50% 58% 58% 53% 46% 61% 54% 36% 32% 31% 26% 15% 13% 11% 19% 21% 20% 14% 13% 5% 2% Light Medium Heavy 14

15 WHY DO THEY BUY? Dual Channel Buyers (59% of Total; 70% oftransactions) are similar to FDMCD Only buyers in their love of deals, they are similar to Specialty buyers in their preference for Expensive Makeup and Beauty Advisors and they distinguish themselves by their love of lingering in the Cosmetic section. % of Cosmetics Buyers Agreeing Strongly with Statements Prefer to buy at stores with good deals Keep my Purch within 1 or 2 Brands Spend a lot of time in the Cosm Section Like to Indulge with Expensive Makeup Prefer to buy at stores with Advisor Find Cosm Layout Confusing No Strong Agreement 56% 59% % of Buyers FDMCD Only 46% 38% 43% 46% 43% 34% 30% 12% 59% 29% Dual Channel Specialty Only 23% 21% 22% 25% 21% 6% 4% 15% 6% 12% 3% 10% FDMCD Only Dual Channel Specialty Only 15

16 Conclusions and Actions Unlike the majority of CPG categories, Millennials really matter in Cosmetics and Beauty, overall. Almost 2x more likely to be Heavy Buyers Shopping behavior is shaping outlet trends and brand preferences. Sales are Shifting to Specialty Channel, particularly Beauty Specialty. Online, though, is losing share in the category. Category growth driven by higher average pricing vs. more Units or Transactions. Very high interest in Premium and Super-Premium brands. Should be in addition to not at the expense of Value and Midrange brands. Deals are a high motivator for shoppers to buy in General Market retail vs. Specialty. Cosmetics is one category where Loyalty Card offers are preferred to Circulars. In-Store Beauty Advisors are a Bad Idea for General Market retail, particularly Drug Stores. Poor Economics and relatively modest interest in the concept. Deals, large selection and expensive brand options are a much bigger motivator to Heavy Buyers than Beauty Advisors. 16

17 Conclusions and Actions Brand rationalization at retail - for brands showing solid metrics - is bad business for retailers that consider this category strategically important. Consumers are very clear that they want and buy many different brands. There is no true loyalty in Cosmetics. The average buyer purchases over 5 brands per year. Awareness, Favorability, Availability and Conversion are bigger drivers of market share. Social media particularly Beauty Blogs and You Tube are a significant consumer communication vehicle for Heavy Buyers of Cosmetics. Usage is not high enough to justify majority of budget for brands with very high aspirations, however. Engage, but don t compromise, Beauty Blog editors. 17