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    Online Exclusives

    CEW Hosts Annual Trends Forecast Event

    A look at the future of beauty in the worldwide marketplace

    CEW Hosts Annual Trends Forecast Event
    CEW Hosts Annual Trends Forecast Event
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    Nancy Jeffries02.07.17
    Cosmetic Executive Women’s (CEW) Global Trends Report event, held January 31, 2017, at New York’s Roosevelt Hotel, presented The NPD Group’s 2016 Year in Review and Trend Forecast, which sets its sights on the future of beauty in the worldwide marketplace. The sold-out event marked the fifth year that CEW had partnered with The NPD Group to review the most important developments in 2016, and share predictions for the year ahead.

    Photos in the slideshow above: 1. (Left to right): Karen Grant, NPD; Jordan Rost, Nielsen; and Sarah Jindal, Mintel Group, at Year in Review presentation. (Photo credit: JF Productions)
    2. Audience at CEW/NPD Year in Review presentation. (Photo credit: JF Productions)


    Jill Scalamandre, Chair, CEW, introduced the panelists, including Karen Grant, Senior Vice President, Global Beauty Analyst, The NPD Group (and a member of Beauty Packaging’s Board of Advisors), discussing 2016 US and global prestige beauty and trends; Jordan Rost, Vice President, Consumer Insights, Nielsen, sharing findings on the mass market; and Sarah Jindal, Senior Innovation and Insight Analyst, Beauty & Personal Care, Mintel Group Ltd., who provided insights into future consumer trends.
        
    Scalamandre thanked event sponsors, Mane, 24 Seven, Inc., Nielsen, Mintel, Beauty Inc, WWD, and Kaplow Communications, for their sponsorship of the event, and introduced Wesley Morris, Senior Vice President, Mane Fine Fragrance, who greeted attendees, and welcomed them to the presentation.

    Morris, referring to our evolving beauty landscape and beyond, invoked a recent holiday greeting he had received from a colleague, saying, “It will be better to light a candle than curse the darkness.” As the cosmetic environment continues to change, we are seeing a plethora of “multidimensional consumers,” noted Diane Nicholson, President, US Softlines, The NPD Group. As she introduced the speakers of the morning, Nicholson said, “There are unique forces impacting mass and prestige beauty. As the breakdown of the traditional paradigm occurs, we are seeing new strategies evolving for multi-dimensional consumers.”

    Guest Speakers Share Perspective

    Jordan Rost, Vice President, Consumer Insights, Nielsen, whose work explores emerging trends and buying and media consumption behaviors, presented first on the shifts occurring in the mass beauty market today, and offered insights into how these shifts assist manufacturers and retailers in making more informed decisions in the marketplace.
        
    He noted that mass beauty growth is plateauing, and while “strong growth has been seen in cosmetics and skin care, it has not manifested in fragrance.” Observing that products are proliferating faster than ever, he also acknowledged a shift in brand selection, as consumers are gravitating toward smaller brands. “Brands are reaching significant scale faster, and reaching larger audiences faster, largely due to digital nimbleness,” said Rost. Further, he observed, “People are now more open to non-traditional entities of power.” One key dynamic Rost observed is the area of holistic health. “America is far more conscious of health today, and 87% of Americans are trying to include fitness, mindfulness, meditation, and living healthfully in their daily lives,” he said.
        
    “Consumers are gravitating to in-store environments for health care, flu shots, and personal care products,” said Rost, adding, “In-store clinics influence mainstream behavior.” Citing Nielsen statistics, he said, “Three out of four millennials have gone to an in-store health clinic and were then influenced to purchase something there.” Unilever and CVS, for example, are offering increased opportunities to buy healthy products, and influencing consumer thinking about what it means to be healthy.
        
    Consumers are gravitating to healthy food choices, natural snacks, Greek yogurts, rather than processed and sweetened ones, and they are trading non-healthful purchases for healthful purchases. Natural products in the home, as well as in beauty, are growing. Simpler products, raw offerings, and naturally positioned products are resonating with consumers. Rost cited Burt’s Bees Daily Protein supplements, as they connect to beauty regimens as an example. “Holistic health and digital empowerment across consumer packaged goods, in beauty in particular, are seeing growth among consumers. Sales are happening on line as e-commerce drives meaningful share across categories,” said Rost.
        
    Platform usage, particularly Pinterest and Instagram are engaging skin care buyers. “The entire path to purchase is really coming on line,” he said, explaining that “memes matter.” He shared a video, which had proliferated on the Internet, of a woman struggling to remove a face mask, explaining, “Google interest and sales correlation is strong.” Today digital platforms are playgrounds for beauty brands to tell their story, and nearly one in three personal care products are bought on subscription. “We’re moving to a future where Alexa decides what we’re going to do. So, having that relationship is super important,” he said. In simplifying the deconstruction of beauty, Rost concluded, “Technology is increasingly going to be having a big part in consumer choice.”

    Consumers Shape the Future

    Sarah Jindal, Senior Innovation and Insight Analyst, Beauty & Personal Care, Mintel Group Ltd., focused on the ways in which consumers are shaping the future regarding product development. “We’re seeing a lot of fluidity and flexibility, which presents a great opportunity for brands to bring products and services to the market,” said Jindal, zeroing in on several trends in today’s market.
        
    Active cosmetics are on the rise. “Consumers are being encouraged to exercise their bodies and brains, and beauty brands will formulate products to help them with their quest,” said Jindal, citing the growth of the athleisure trend. “Fitness earns big. It will be almost $30 billion by the year 2020 in gym memberships,” she said; “and, athleisure is official now. It’s in the Merriam-Webster Dictionary, defined as clothing designed for exercising and general wear.”
        
    Clearly, there is a growing shopping environment now for athleisure wear, and complementary products, including sportswear, supplements, swimwear, skin care and more. “Wellness is moving into retail stores,” observed Jindal, noting the yoga classes and wellness workshops offered at philosophy, for example. She also cited Yuni Beauty, for ease of use, and Sweat Cosmetics, which makes mineral makeup in a brush, as examples of the trend. Portability and ease continue to score high marks, with Milk Makeup, and Stowaway Cosmetics, further examples of the easy to use and carry in a gym bag trend.
        
    Products that complement workout sessions, targeting hair care and eye makeup, for example, are also growing in popularity. “Tarte athleisure formulations for the face, including Tarteguard SPF 20 and Brighter Days, a vegan highlighting moisturizer, are examples of products that perform, and are waterproof and sweat proof. There are also products specially formulated for hair protection for swimmers and runners, as well as for post-workout, like Activbod and Pretty Athletic; and numerous branded workouts, including Estée Lauder’s breast cancer running/walking outdoor initiatives, which bring additional relevance to the brand. Focused fitness, explained Jindal, will be a trend for 2017, with routines increasingly linked with new beauty product development.
        
    She cited opportunities that exist for products that are heat activated, noting that the hot yoga trend has expanded into hot boxing, which loosens muscles and gets product developers thinking about products that are heat activated. High intensity interval training, which centers on a burst of activity, might give rise to additional product development in the area of fragrance release, or increased functionality, which is enhanced by exercise. “Outdoor exercise opens up a whole new round of product creation, including pollution protection and UV protection,” said Jindal, citing L’Oreal’s sticker that reveals sun exposure to the wearer, as an example.
        
    The new fitness fad, pool biking, said to stimulate circulation and provide a hydro massage, may give rise to water-activated formulations that help condition, moisturize, or protect the skin. Other opportunities include the older consumer market. By 2020 there will be 100 million consumers over the age of 65, and they are staying active longer. “This is a consumer group that can’t be ignored,” said Jindal, adding that skin elasticity is an area that could be generating more product innovation.
        
    Connected clothing is another example of the wellness trend. Athos Sportswear has sensors that link with an app that monitors fitness levels; and just as personal trainers now look at wellness and fitness, Jindal suggested that, “Beauty trainers that provide an approach to wellness and beauty, could be the next step.” Really understanding who your targeted consumer is and knowing what their needs are is critical. Jindal said, “Brands need to make it clear how they stand out. In addition, they need to offer clear claims, make products easy to apply, be quickly absorbed, and formulated for their intended performance.”

    Grant Tells It Like It Is and Will Be...

    Karen Grant, Senior Vice President, Global Beauty Industry Analyst, The NPD Group, provided insights into the current beauty market, and highlighted and evaluated the changes in today’s nuanced environment. “For 15 years, NPD has presented Hot Off the Press – The Beauty Industry Year in Review, and each year we have called out what is happening. Five years ago, we said ‘disrupt or be disrupted,’ three years ago we said that makeup was becoming skin care and that small brands, experiences, and services were becoming more important. And last year, I said to look for fundamental change. We’re living it. We’re watching how it’s playing out in the industry,” she said.
        
    Central to Grant’s analysis was the topic of restructure. “We are watching ‘restructure,’ and we’re feeling the tension. You’ll hear that things are falling apart, that there’s division going on. But division can mean falling apart, as well as separating to give birth. In every phase of our business, we’re seeing things being restructured,” said Grant. “One of the trends today is a proliferation of trends,” she added.
        
    Grant alluded to the distillation process, noting that it is the last few drops that are the most important part of the process, and the consumer mindset is currently being distilled. Consumers are experiencing binge behavior, feel good experiences, a turn toward healthy living, as well as a heritage component, in which the past is being rediscovered. She referred to the diminished holiday business of 2016, noting that while fewer women shopped for fragrance, the makeup category had soared; and overall, prestige beauty in 2016, had reached another milestone, adding, “Yes, another year, another billion.”
        
    Prestige makeup is up across the globe, leading growth in all countries. In North America, in the US, prestige beauty is growing in all categories, but soft in fragrance. In Canada, it’s growing in all categories. South America, particularly Mexico, Argentina, and Chile, saw growth in all categories, with Peru showing growth in makeup and skincare, with fragrance flat. In Brazil, the makeup category showed growth. In Europe, the UK saw growth in all categories, but was soft in skincare and fragrance. Italy was growing in all categories, but soft in skincare and fragrance; Spain, grew in all categories; and in France, both skincare and fragrance were down.
        
    According to Grant, in the US 2.5 million more women said they were using makeup today, with more users coming in to the category. “But, we have to be mindful, because when we binge, we’re sometimes killing other categories,” said Grant, noting how makeup’s dominance soars and continues to engage consumers. Makeup market drivers were products that helped the complexion and performance products.
        
    The feel good experience continues to thrive, with products that make consumers feel “comfy,” like sleepwear, slip-ons, and high quality food service. Channel dispersion has seen increases in beauty, and among the top channels shopped for beauty, mass retailers saw the most activity in the specialty, drug, beauty supply, and Internet channels; while top channels for prestige beauty included beauty supply, the Internet, and warehouse channels.
        
    Prestige beauty continues to outpace mass, while makeup accelerates as fragrance weakens. Grant observed that online gains in December were significant, with 80% of December gains occurring in the online space. She described the purchase pyramid occurring in beauty today. “We have to understand why the online space is gaining so much beauty purchase,” said Grant, noting that 53% of women buy to feel confident; 62% buy beauty as a treat for themselves; and 78% buy to look and feel their best. “In short, women are driven to buy beauty for self-actualization and optimized living. Almost 90% of women buy beauty for those reasons,” said Grant.

    Fragrance, Makeup, and Lifestyle Brands

    In fragrance, there is a $100 million opportunity, according to Grant. In 2016, prestige fragrance gained $91 million online, but lost in-store. She noted that in almost all of the developing markets, juices are doing better than sets; and that categories, like rollerballs, travel sprays, diffusers, and candles, are all contributing to the diffusion of the fragrance market. “Fragrances in the home shouldn’t be underestimated,” said Grant, adding that scents defined for She, He, Me and gender neutral and artisanal scents account for 54% of fragrance purchase, and that 90% of US consumers use scented products, including home scents, like candles, air fresheners, and/or body fragrance like perfume or body spray.
        
    Social brands, like e.l.f., benefit, Makeup Forever, Urban Decay, Too Faced, NYX, Tarte, Becca, Nars, It Cosmetics, and Anastasia Beverly Hills have also shown strong performance in 2016; while “healthy-ish” lifestyle across NPD industries continues to be strong. This includes everything from footwear and handbags to grass-fed and gluten free options. This is all part of the healthy mindset that has extended to natural skin care, with such products as paper and clay based beauty products still growing in the skin care category.
       
    The no-makeup trend, driven by primers, highlighters, and products designed to prepare the face is still going strong. Lip care enhances bare faced beauty, hence the proliferation of a wide range of lip colors, including browns, nudes, and mauves, which continues to grow. “For the second year in a row, we’re seeing growth in nudes,” she said.
        
    While healthy lifestyles and naturals continue to be strong, there is also a return to the heritage category, or the past rediscovered. “Past treasures are coming back, as are classic brands, and in beauty, masks are coming back strong, while flankers are appearing in updated formats. There is also a return to masculine beauty, in skincare, hair, facial devices, and kits, while brows, lotion eye liners, and lip colors are all growing in all countries,” said Grant.
        
    Notable skincare launches in 2016 for the face were Chanel Sublimage LA Texture Supreme Facial Moisturizer, and La Mer - The Perfecting Treatment; for hair care, Living Proof Full Dry Volume; for hair color, Rita Hazan Root Concealer Touch Up 2 Spray; and Estée Lauder Advanced Night Repair Recovery Powerfoil Mask, in the mask category. The top 2016 launch in skincare was Estée Lauder Revitalizing Supreme Plus Cream.
        
    Notable makeup launches in 2016 were Anastasia Glow Kit Ultimate Glow; Lip care, Urban Decay Vice Lipstick; Eye Brow, Benefit Gimme Brow; Concealer – Too Faced Born This Way Naturally Radiant Concealer, and Tarte Grav3yard Girl and Swamp Queen Eye & Cheek Palette. The 2016 top makeup launch was Anastasia Beverly Hills – Modern Renaissance Eye Shadow Palette.
        
    Clearly, trends are diverging, said Grant, and consumers are shaping the future. “We are one nation, with many local preferences. We need to recognize the relevance of older generations and realize more opportunity in cross-generational synergies. Let’s see how we can light that candle going forward,” she said.
        
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