NPD BeautyTrends Reports: Annual Department Store Beauty Sales Reach Close To $7 Billion.

Last year was a beautiful year for department store cosmetics as annual sales topped $6.8 billion, up 5% from 1999.

According to NPD BeautyTrends(R), the skincare, makeup and fragrance retail tracking unit of leading marketing information provider The NPD Group, Inc., growth was seen in all categories. Makeup and skincare experienced the most growth, up 6%, while fragrances, once again hit the hardest, showed an increase of only 4%.

ANNUAL 2000 PRESTIGE BEAUTY SALES

Total Sales / Market Share / Percent Change 99/00

Fragrance – $2.9 billion / 43% / 4%

Skincare – $1.7 billion / 25% / 6%

Makeup – $2.1 billion / 31% / 6%

Purchase with Purchase – $96 million / 1% / -10%

In 2000, new launches were the driving force behind the success of the skincare category. Newly introduced skincare products that used groundbreaking anti-aging formulations to meet consumers’ desire for well-being sparked a growth in sales and market share. In 1998, new products were responsible for 6% of the skincare business. This grew to 8% in 1999. In 2000, new products represented 10% of total prestige skincare sales.

“Today’s on-the-go consumers expect more from their skincare products,” said Timra Carlson, vice president of NPD BeautyTrends.

“Last year’s top new skincare launches represented new strides for anti-aging products. With the introduction of sugar-derived acid alternatives and vitamins used in their purest forms, skincare manufacturers delivered what consumers wanted, immediate results that showed visible difference within a day,” stated Ms. Carlson.

The most notable new skincare launch for 2000 was Estee Lauder Idealist Skin Refinisher. Formulated to improve skin tone, balance moisture, reduce pore size, and reduce fine lines, Idealist achieved the highest sales of any new launch in NPD BeautyTrends’ tracking history. In just six months since its introduction, this star product climbed the charts to number one among all anti-aging products and found its place as the fourth best selling skincare SKU of the year.

New makeup launches were less important to overall category sales last year. New product launches accounted for 6% of total category sales in 2000 vs. 7% the prior year. However, many of 2000’s new launches hit the best seller list. At the top of the list, products offering light reflective technology which incorporate corrective properties such as Estee Lauder’s Go Pout, Lancome’s Photogenic Foundation, and Prescriptives’ Magic line helped drive sales.

The biggest news in makeup over the past three years has been the evolution of a new breed of high performance lip products. Top selling new launches in this category include Lancome Sheer Magnetic lipstick and Clinique Glosswear for Lips. Up 7% in dollar share, lip products accounted for 22% of the prestige beauty industry. Leading this growth in sales, NPD’s data show lip gloss continues to be the fastest-growing lip segment. Since 1998, lip gloss has seen two-fold sales increases and has doubled its share in the lip segment.

LIP GLOSS GROWTH AND TOTAL LIP MARKET SHARE

Lip Gloss Dollar Growth / Share of Lip Segment

1998 – 10% / 6%

1999 – 48% / 9%

2000 – 41% / 12%

“Lip color has come a long way,” said Ms. Carlson. “In the past, moisturization was compromised by long wear. Today’s new crop of lip products provide consumers with multi-functional benefits by incorporating shine with color and encompassing long wear with light-weight comfort.” concluded Ms. Carlson.

In 2000, only 53 new fragrances launched compared to 73 in 1999, but sales of new fragrances did not suffer. In 2000, new fragrance launches matched 1999 sales of new launches and continued to capture 8% of total fragrance dollar sales. The fragrance category posted 4% growth for men and 3% for women. Many established brands contributed to this growth in 2000.

For more information at http://www.npd.com.