Fall cosmetics: a preview: flat sales have prompted marketers to innovate in the color cosmetics segment

Household & Personal Products Industry, August, 2003 by Veronica MacDonald

FORGET SPRING. Autumn is a time for renewal when it comes to color cosmetics. Prestige makeup sales remained flat in first quarter 2003 compared to the first quarter 2002, reaching $650 million, according to NPD Beauty, Port Washington, NY. However, prestige makeup sales did increase 2.8% in 2002 to $2.5 billion in U.S. department stores.

The mass market facial market category tells a similar story. According to Information Resources Inc., Chicago, facial makeup sales fell 2.3% to $772.1 million for the year ended June 15, 2003. Despite the decline, experts did see a number of trends emerge from the past year.

"Skin care benefits made more of a presence in makeup, with products offering vitamins, SPF, moisturizing, firming and anti-aging properties," noted Natalic Seidman, director of NPD Beauty.

Smaller segments were said to fuel dollar growth in the prestige segment as well, such as lip gloss and mascara. Last month, L'Oreal released its new Glam Shine collection of lip colors featuring a micro-crystal technology that amplifies light reflection and creates volume and dimension. It also plumps lips and has a hydrating gel base and a non-tacky formula. The nine gloss shades range from goddess to starlet. Also new is L'Oreal Colour Juice, a set of juicy lip glosses with sheer color and shine. The squeezable tubes come in 10 shades such as watermelon crush and iced latte. NPD Beauty experts said newer textures also made a big impact on sales.

"'Traditional' products also offered new or different forms and textures, including glossy or creamy products for eyes, or creme or powder compact foundations," Ms. Seidman said. "Popularity of multi-purpose products designed for use on eyes, cheeks and lips--or some combination--were also seen in 2002."

Teeny Teen Products

With disappointing sales for the adult segment, many marketers are hoping to find a wealth of opportunity in the teen segment, although many teen products actually better target tweens, according to the Zandl Group's "Teen Girls: looking good" report, and teens are more savvy and sophisticated than ever. Also, the teen cosmetic category may be losing steam as the informal/casual trend continues to grow. Another trend impacting cosmetics is the growth of more extreme music styles, such as punk, goth and metal, and the importance placed on hair coloring and piercings/tattoos. Zandl experts said these girls are most likely to buy niche brands. Other trends that will strongly impact the teen cosmetics market are technology and a revival of 1980s style.

But these warnings do not phase Avon Products. This month, Avon will unveil Mark for 16- to 24-year-olds. Experts said this segment is notoriously fickle, as well as spontaneous and experimental. With employment levels of this age group at their lowest in the past 30 years, Avon plans to recruit representatives at colleges, high schools, shopping malls and other youth-oriented hot spots.

"If our true mission is to be the company for women, Avon must also be the company for young women," noted Deborah Fine, president of the newly-created Avon Future division.

Executives said the website, www.meetmark.com, yielded 13,000 inquiries from girls in early June. Avon said there are 300 million young women ages 16-24 who spend $250 billion at retail in its top 30 markets. The company said it expects Mark to add $100 million to its U.S. sales in the first year, starting in September 2003. It then plans a global rollout by the end of 2004. "We want to be where she is and lives," said Ms. Fine. "Forty-nine percent of our target lives in or around the college campus. They have a constant need for flexible employment."

The products were designed to be sophisticated, making the possible consumer audience much wider. Prices will also be on par with drugstore brands.

"The formulation, packaging and colors were edited more tightly for this consumer," Ms. Fine said. Representatives will also be using a "Social Beauty" concept that insists young women want to be both social and beautiful.

Innovative products include "hookups;" i.e., interlocking and mix-and-matchable lash, lip, concealer and eyeliner products. Avon executives said more than 500 combinations are possible. Also new is the giggles line, including the coffee bar lip glosses and a customizable lip color palette. Favorite colors infinite color kit offers custom designed compacts with lip products, face colors, eyeshadow and blush. All of the products are portable and small enough to fit in jean pockets. The same can be said for the small "minicure" nail color doubles and glass slicker sheer lip shine. Mark will also feature a fragrance series, skin care products and accessories.

Mary Kay has added several products to its youth-oriented Velocity line, including End2End fragrance and lip gloss, combining scents such as banana flower and mangosteen with an iridescent and sheer lip gloss. Executives said young women desire trendy, portable products to suit their hectic lifestyles. The lip gloss also features a holographic effect, wherein light causes undertones to shift and shimmer. Also new is Velocity Shadow Box eye compact, a square palette with four sheer, crease-resistant eye colors. Two compacts are available: heart throb and sweet heart.