Significant numbers of new launches onto the market and an increasing interest in indulgence beauty products has led to high growth in the US market in recent years, but all of that looks set to change.
According to market research specialist Information Resources Inc (IRI) slowing sales of indulgence cosmetic product has been one of the main influences why the US beauty market has been relatively quiet during 2007.
Its figures reveal that the market grew by $382m in 2007, a significant fall compared to the growth figure for 2006, which stood at $910m.
In 2006, the US beauty market was still riding a wave of relatively high growth that was linked to the higher price paid for indulgence products.
US consumers tighten belts
However, as US consumers continue to tighten their belts in the light of the unfolding credit crunch and less than optimistic predictions for the economy, this pattern is translating into a change in spending patterns for beauty products.
IRI client solutions expert Leigh Anne Rowinski beleives that, although consumers are still interested in the innovation and quality that has come to characterise indulgence cosmetics, slowing sales at mass volume stores is the main reason why the category's sales have been impacted.
The IRI report highlights the fact that skin care products continue to remain popular with the consumer, but other categories, particularly color cosmetics, are feeling the pinch, having shown flat growth for a third year running.
Looking to the year ahead Rowinski believes that in order for beauty companies to get through this more challenging period on the retail front, many companies are going to have to make significant changes to the way they operate.
Switching to eco-friendly lifestyles
Presenting the study findings at a conference in New York city yesterday, Rowinski pointed out that as well as reducing their spend, consumers are also looking to switch to towards eco-friendly lifestyles.
Bearing this in mind, consumers are looking to apply the 'less is more' mantra to their spending patterns, a philosophy that Rowinski also says should be translated into their beauty spend.
She also pointed out that the more careful and limited spending patterns starting to be displayed by consumers means that beauty manufacturers need to have a thorough understanding of consumer issues in order to react to market changes quickly and effectively.
"The key is to understand the behavior changes that are taking place and to discover the upcoming trends for 2008 and beyond," stated the IRI study.
In the course of the next week CosmeticsDesign will be taking a closer look at Rowinski's presentation, looking at the findings for the skin care, fragrance and mass market categories on an individual basis.
