Premium anti-ageing products grow at expense of mid-market, study finds

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The premium anti-ageing products category is fragmenting into a market of price extremes, according to new research by The NPD Group.

It found consumers are restricting spending on entry and middle market prestige anti-ageing products, with value sales declining by -30% in the year to June 2012 for products priced under £30, and by -8% for products priced between £30 and £50.

By comparison, upper and super premium anti-ageing products are experiencing strong growth, with value sales growth of +28% for prestige products priced between £50 and £100 and +9% growth for products priced over £200. This proves this segment simply has not been impacted by the economy, said The NPD Group. In fact, the strength of the upper and super premium sectors has led to a year-on-year growth of 6% in value sales across the entire anti-ageing category.

June Jensen, director for NPD Group beauty UK, said: “As products priced between £100 and £200 are declining -1.2% in value sales, we believe the consumer that was previously buying in this segment is now trading down to the lower price bracket. Premium skincare consumers clearly see products below £100 as both high quality and a better buy in the current challenging economic environment. Although -1.2% may seem small, it is vital for premium brands to understand the causes of the drop in order to take the action that will ensure that they retain their valued – and valuable – customers.”

New product launches, innovative packaging and gift sets drive growth
The growth of the super-premium anti-ageing market is primarily due to the success of new launches and gift sets from brands such as Shiseido, Guerlain, Chanel, Lancome and La Mer. All of these premium brands have experienced growth above the market rate, with Shiseido enjoying 48% growth, and Guerlain and Chanel both at 32%. The research by The NPD Group highlights the importance of innovation to the market. Without the success of new launches and new gift sets the premium anti-ageing segment would be in a decline of 16% year-on-year in values sales.

And it’s not just gifting. Many brands have launched limited edition products with attractive packaging such as wraps and boxing that people want to own. La Mer, for example launched its iconic moisturizer with limited edition collectable cases to join the nation in the season of British celebrations. Meanwhile, Lancome introduced customised bottles of its best-selling serums to celebrate the Queen’s Diamond Jubilee. Genefique was embellished with a red, white and blue crown, while Visionnaire customers will receive a sceptre and the boxes will be decorated with Union Jack prints and suitably dressed corgis. 

Anti-ageing editorial increased year-on-year
The anti-ageing sector of the beauty market experienced the largest increase in editorial coverage of the skincare sector year-on-year, with coverage in the luxury/premium sector up almost a quarter (24%). This was driven partly by increases in coverage in magazines such as Red, Grazia and Hello, where the actual space dedicated to press coverage increased by an average of 13%. Almost half (47%) of the press coverage was driven by new product launches, showing just how important innovation is in the promotional mix for the anti-ageing market. YSL’s Youth Liberator and Chanel’s Hydra Beauty Gel are great examples of this trend, both achieving good press coverage, measured as achieving feature articles and mentions in ‘best buy’ columns.

In terms of advertising, only 11 mass market anti-ageing brands advertised in the last year. Overall advertising spend in the category was down 4% on the previous 12 months.

Jensen said: “Clearly anti-ageing products continue to appeal to beauty consumers, but both consumers and brands are working harder and smarter to get more value for their respective budgets. Product innovation, targeted and personalised gifting, limited edition products and beautiful packaging are all playing their parts in the growth of this sector.”