Premium Skincare - UK - November 2004

SUMMARY

Premium Skincare - UK - November 2004

Within this report Mintel investigates the premium skincare sector separatelyfor the first time. As the report shows, the UK premium skincare sector isshowing very strong growth, within an already healthy broader cosmetics andtoiletries market.

The report examines the drivers to that growth, and investigates whether thedivision between the premium and the mass-market, already somewhat imprecise, isbecoming even more blurred. It further considers the possible implications ofany such blurring.

Using the latest consumer research, market size data and trend analysis, thisreport provides vital new insight into the current state of the market and itsprospects, investigating its drivers, segmentation, supply structure,distribution, advertising spend and sales forecasts.

Mintels findings offer you a unique way of understanding consumer trends andthe attitudes of the markets key target audiences, enabling you to tailor yourmarketing to real demand, both tactically and strategically. Use Mintelsresearch to avoid market pitfalls, discover sector opportunities, identifygrowth potential and achieve the best possible results.

TABLE OF CONTENTS

Introduction and Abbreviations

• Definition
• Consumer research
• ACORN
• Abbreviations
• Overcoming the price barrier
• Beauty consultants offer a point of sale dilemma for premium skincareretailers
• Targeting the male consumer
• Gifting is an important feature of the womens skincare market
• Promote premium skincare gifts among men
• Cynical consumers trust friends and family recommendations first

Executive Summary

• Concerns over personal appearance drive market
• Premium sales outpacing mass market
• Four suppliers dominate
• Department stores dominate distribution
• Research suggests brand loyalty
• Future sales look positive

Market Drivers

• Attitudes towards personal appearance
• Figure 1: Agreement with lifestyle statements on personal appearance, bygender, 2004
• Figure 2: Agreement with statement on skincare products, by gender, 2002and 2004
• Appearance and image are key
• Figure 3: Agreement with statements on personal care, by gender, 2004
• Anti-ageing skincare for an ageing population
• Figure 4: Changes projected for the UK male and female population, by agegroup, 2004-09
• Growth in ABs favourable
• Figure 5: UK adult population, by socio-economic group, 1998-2009
• Relative affluence
• Figure 6: PDI and consumer expenditure, at constant 1999 prices, 1999-2008
• Pamper power
• The role of self-image
• Purity and wellbeing
• Shopping preferences
• Figure 7: Attitudes towards shopping for toiletries and beauty products,2002 and 2004

Market Size and Trends

• The wider picture
• Figure 8: UK total retail sales of skincare products, 1999-2004
• Bodycare shows strongest growth
• Figure 9: UK total retail sales of skincare products, by type, 1999-2003
• Premium sector represents a third of total market
• Figure 10: The premium skincare proportion of the overall market, 2004 (est)
• Figure 11: UK total retail sales of premium skincare products, 1999-2004

Market Segmentation

• Evidence of trading up
• Figure 12: Indexed UK total retail sales of skincare products, bypositioning, 1999-2004
• Mass-market innovation bridges the gap
• Figure 13: UK total retail sales of skincare products, by type andpositioning, 1999-2003
• Premium suncare shows the strongest growth
• Mass market brands invest in hand and body care
• Figure 14: UK total retail sales of skincare products, by growth,1999-2003
• Figure 15: UK total retail sales of premium skincare products, by marketshare, 2003
• Consumers choose between scientific and natural skincare
• NPD important to womens facial skincare
• Further segmentation drives womens hand and bodycare
• Mens toiletries sector still to reach its full potential
• Suncare ranges grow and grow
• Trends encouraged by popular media

The Supply Structure

• Figure 16: Manufacturers shares of the UK premium skincare sector, 2001and 2003
• Companies and brands
• Clarins
• Elizabeth Arden
• Estee Lauder Group
• Lancaster
• LOreal
• Fashion and beauty brands
• Chanel
• Christian Dior
• Yves St Laurent
• Mass-market brands overlap with premium
• Other companies
• New product briefs
• October 200
• September 2004
• August 2004
• July 2004
• July 2003
• International launches
• Advertising and Promotion
• Higher profit margins apparent
• Figure 17: Main monitored media advertising expenditure on premiumskincare products, 1999-2004
• Figure 18: Main monitored media advertising expenditure on premiumskincare products, 1999-2004
• NPD dictates advertising activity
• Figure 19: Main monitored media advertising expenditure on premiumskincare products compared with sales, by type, 2003
• Few substantial advertisers
• Figure 20: Leading advertising spend in the premium skincare sector, bybrand*, 1999-2003
• Below-the-line activity focuses on PR

Distribution

• Figure 21: Retail distribution of all skincare products, 2001 and 2003
• Department stores dominate
• Figure 22: Retail distribution of premium skincare products, 2001 and 2003
• Boots
• Department stores
• Drugstores and other chemists
• Other outlets
• Online sales
• Customer service

The Consumer

• Usage patterns
• Figure 23: Penetration of skincare products, 2004
• Frequency of usage
• Figure 24: Penetration and usage of skincare products, 2004
• Moisturising considered most important
• Figure 25: Reasons for using face creams and lotions, 2004
• Age concerns begin in early thirties
• Figure 26: Agreement with statements on personal care, by gender, age,socio-economic group, lifestage and Mintels Special Groups, 2004
• Attitudes towards skincare
• Figure 27: Attitudes towards skincare products, by gender, August 2004
• Brand loyalty is important but not restrictive
• Family and friends have the greatest influence
• Less than two in ten concerned about sun damage
• Usage of premium skincare
• Figure 28: Usage of premium skincare products, by gender, August 2004
• Awareness and income dictate usage
• Detailed Demographics
• Usage of skincare products by demographic sub-group
• Face creams and lotions
• Figure 29: Penetration of face creams and lotions among women, by age,socio-economic group, lifestage and Mintels Special Groups, 2004
• Figure 30: Frequency of using anti-ageing creams, by age, socio-economicgroup, lifestage and Mintels Special Groups, 2004
• Figure 31: Frequency of using other face creams and lotions, by age,socio-economic group, lifestage and Mintels Special Groups, 2004
• Figure 32: Usage of cleansing creams and lotions, by age, socio-economicgroup, lifestage and Mintels Special Groups, 2004
• Hand and body creams and lotions
• Figure 33: Usage of body creams and lotions, by age, socio-economic group,lifestage and Mintels Special Groups, 2004
• Figure 34: Usage of hand creams and lotions, by age, socio-economic group,lifestage and Mintels Special Groups, 2004
• Suncare
• Figure 35: Usage of suntan lotions, oils and creams, by age,socio-economic group, presence of children, lifestage and Mintels SpecialGroups, 2004
• Figure 36: Suntan lotions, oils and creams - types used, 2004
• Men
• Figure 37: Usage of face creams and lotions, by age, socio-economic group,marital status, lifestage and Mintels Special Groups, 2004
• Figure 38: Selected attitudes towards skincare products, by gender, ageand socio-economic group, August 2004
• Figure 39: Selected attitudes towards skincare products, by lifestage,region, marital status and Mintels Special Groups, August 2004
• Figure 40: Selected attitudes towards skincare products, by presence ofchildren, ACORN categories, media usage, supermarket usage and commercial TVviewing, August 2004
• Figure 41: Usage of premium skincare products, by gender, age andsocio-economic group, August 2004
• Figure 42: Usage of premium skincare products, by lifestage, region,marital status and Mintels Special Groups, August 2004
• Figure 43: Usage of premium skincare products, by presence of children,ACORN categories, media usage, supermaket usage and commercial TV viewing,August 2004

The Future

• Good news for market as current premium users mature
• Premium to outpace mass market
• Consultants could play an important role

Forecast

• Strong growth in all sectors
• Figure 64: Forecast of the UK premium skincare market, by value, 2004-09
• Facial skincare
• Womens hand/body lotion
• Suncare
• Mens toiletries
• Figure 65: Projected index growth rates, at current prices, 2004-09
• Continued blurring of boundaries
• Factors incorporated in the forecast