Premium Beauty and Personal Care in the US

PROSPECTS

The premium segment is expected to increase in key beauty categories

The premium segment experienced current value growth in all but two beauty and personal care categories in 2017. The share of premium products in the key beauty categories of colour cosmetics, fragrances, hair care and skin care is expected to increase in the forecast period.

Higher margins in premium colour cosmetics and skin care will support growth

Premium colour cosmetics and skin care experienced healthy growth in 2017. Demand for premium skin care was driven by the greater demand for high-end natural and organic skin care brands, and new benefits from emerging products, such as microbiome skin care and probiotics.

The premium and mass segments continue to blur

Consumers are increasingly mixing designer and high-street brands in beauty and personal care. Whilst some consumers purchase purely mass or premium brands, they are increasingly adopting a multi-brand approach that mixes the consumption of both premium and mass brands.

COMPETITIVE LANDSCAPE

Wal-Mart expands its premium beauty offerings through CO Squared

Big box retailer Wal-Mart is expanding into the premium beauty space through CO Squared, a premium online-only cosmetics brand fronted by Canadian model Coco Rocha. CO Squared represents one of the company’s tactics to grow its premium offerings.

An alternative concept of premium, beyond brand positioning

Currently, the beauty industry defines premium mainly by three factors: positioning, price and distribution. However, due to the blurring of the premium and mass segments and greater emphasis on the perception of a brand’s ethos and social content, beyond simply price and distribution, beauty brands and retailers are increasingly struggling to define exclusive factors that characterise a brand as premium.

Tactics to promote premiumisation beyond brand attributes

One way beauty specialist retailers offer consumers a premium experience is by promoting discovery. This is likely to bring diagnostics and self-assessment to the forefront of the consumer experience.

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