Strategies to Succeed in the Fast Evolving Premium Beauty Market

Strategy Briefing

About This Report

Sep 2013

Premium cosmetics are recovering following a difficult period at the onset of the economic downturn, as premium cosmetics player focus on brand experience through high tech, targeted and more customised innovation, while increasing the scope of consumer interaction with the brands, both in store and in the digital space.

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Strategies to Succeed in the Fast Evolving Premium Beauty Market

Premium cosmetics recovering

Global retail sales in premium cosmetics continued to grow but underperformed the mass segment in 2012. Consumer trading down in developed markets impacted the growth of premium cosmetics.

Shifts towards emerging markets

Value growth in global premium cosmetics has decisively shifted from developed markets to developing markets. Demand in emerging markets is growing strongly on the back of dynamic economic development and rising disposable incomes.

Consolidated premium market

Premium cosmetics is highly consolidated, with the top players commanding large shares. The financial strengths of these players are crucial in their scientific research and product development, the key attributes to ensure product quality and price.

Customisation of launches

Personalisation has formed a key part of the premium cosmetics business, particularly in skin care and fragrances, in which innovations have been focused on more targeted and customised solutions to cater to specific consumer preferences.

Affordable premium

Adapting to consumers? more careful spending, premium players are creating offerings at lower prices by means of smaller packaging, broadening distribution channels and even cutting prices to make premium products more accessible to consumers.

Upmarket premium

Upmarket premium offerings are best for targeting affluent consumers who are less impacted by volatile economic development, bypassing middle-income consumers to reinforce premium status and build up brand equity.

Digital involvement

Expanding their presence in the digital world has now become a given among premium players. Engaging consumers with easy, fun and convenient activities, and emphasising premium status with a lavish shopping experience has paid off for many players.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Introduction

Scope
Key findings

Premium Beauty Performance

Premium players emphasise experience to drive growth
Premium cosmetics continues to grow
Premium skin care the core category in total revenue
Focal points to provide more personalised brand experience
Personalising brands in a diverse market
Regional popularity shifts towards emerging markets
Consumer preferences for premium differ as markets vary

Competitive Landscape

Premium cosmetics a consolidated market
Premium business with a focus
Better growth with wide geographic presence
Leading brands are high-profile international labels

Key Strategies and Case Studies

Top-line strategies by premium players
Key trends in product innovation
High-tech innovation prominent in both premium and mass brands
High tech innovation extend to skin care devices
Targeted innovation to address beauty concerns
Multi-functionality across categories
Innovation across categories
Product sophistication boost hair care and nail care
Case study: Affordable premium to boost consumer base
Increasing consumer demand for accessible premium
Channel diversification to make premium accessible
Case study: Upmarket premium to retain price and profits
Super-premium status to by-pass middle-income consumers
Upmarket for dedicated consumer groups
Adding value through super-premium status
Case study: Expansion of digital involvement
Technological advances help retailers increase sales
The convenience of the internet fuels digital involvement
Digital involvement: Increase awareness
Digital involvement: Increase purchasing
Digital involvement: Improve experience

Global Prospects

Steady growth ahead
Skin care remain the most prosperous category
Asia Pacific lead growth among emerging markets
Key trends to continue