TABS Group—a leading technology-enabled analytics firm servicing the consumer-products industry—released the results of its 2014 Beauty Consumer Insights Study Dec. 15 with lots of great news as well as excellent advice for what it calls "specialty beauty stores."
In the latest installment of its Webinar series, TABS Group explored the relationships between Millennial shoppers, social media and beauty products by surveying 1,000 women and 250 men between the ages of 18 and 75, including the types of merchandise they purchase, the frequency of those purchases, the places they patronize, ongoing trends in the industry, the popularity of visiting a nail salon for manicures and pedicures, and the influence of social media on purchase decisions. Based on its data, TABS Group estimates:
- Beauty-product sales, excluding skin care and hair care, in the United States total more than $12 billion annually.
- Most shoppers buy more than seven types of products throughout the year.
- The majority of buyers pay between $5 and $20 for products, but Millennial women are apparently willing to spend more—paying an average of 25% more than other age groups.
While major beauty retailers such as Walmart, Target and Walgreens still dominate the share of dollars spent, TABS Group's data also shows that shoppers don't show loyalty to any specific place.
"The heaviest shoppers demonstrate no brand loyalty, purchasing more than eight brands on average and shopping at many more outlets than lighter buyers," said TABS Group founder and CEO Dr. Kurt Jetta. "Consistent with the data from our Consumer Value Study earlier this year, most consumers say they prefer to shop at stores that offer good deals. The bottom line is that more deals lead to more sales—particularly among the heaviest buyers who have no loyalty to specific brands."
Other key findings from the study include:
- Specialty beauty stores, online-beauty retailers and department stores attract heavy buyers. While mass retailers were the most popular places for buyers overall (57% reported shopping at Walmart; 32% said shopping at Target), specialty beauty stores, online retailers and department stores are more successful at attracting heavy buyers—shoppers who regularly purchase more than 10 segments. Only 39% of Walmart's regular buyers are heavy buyers, while heavy buyers account for 69% of Sephora's regular buyers, 61% of online-beauty retailers' regular buyers and 58% of department stores' regular buyers.
- Don't count on loyalty! Attract heavy buyers with good deals. While heavy buyers are valuable targets—purchasing four times more brands than light buyers and accounting for 58% of all purchases—they don't show any true loyalty to specific places, nor to brands. In fact, most heavy buyers purchase more than four brands regularly. Fifty-seven percent of heavy buyers and 59% of medium buyers noted that good deals are "very important."
- Online-beauty gurus are replacing in-store advisers. Only 24% of heavy buyers indicated that they prefer to shop in brick and mortars with in-store beauty advisers. It's likely that buyers are increasingly turning to online-beauty advice that they access through social media. Forty-two percent of heavy buyers say that social media is very important in making their purchasing decisions.
- Millennial women, the income group from $75,000 to $99,000, and Hispanics are the most involved. Millennial women between the ages of 25 and 34 purchase the most products—an average of between nine and 10 product types per year. Hispanic women showed higher involvement than other ethnic groups, purchasing more than eight product types per year.
- Don't ignore those men! While women are the primary demographic target with 86% purchasing in the past year, retailers shouldn't ignore the importance of men.
- 'Tis the season for BEAUTY shopping. A number of product categories see surges in sales around Christmas. Kit sales increase nearly threefold during the holidays, and sales of both nail polish and lip makeup increase 1.5-plus times more than average.
- The economy is rebounding—one mani/pedi at a time. The study reported an increase in women visiting nail salons—and that could be a sign of increasing consumer confidence. Forty-five percent of women get a mani in a salon, and 42% get a pedi in a salon.
[Infographic courtesy of TABS Group]