Consumers’ beauty “skimp and splash" attitude is here to stay, despite its evolution resulting from the economic uncertainties, according to the latest research from Mintel. In 2010, 32 percent of consumers said they haven’t changed their beauty shopping habits and 26 percent said they’re spending less— indicating the frugality that was established in 2009 remains widespread. Apparently comparison shopping is up, too. Almost 10 million (40 percent) U.K. adults said they are shopping around more to compare prices on beauty products, 7 million shoppers (14 percent) have bought a lot more special offers, promotions and discounts, while approximately 2.5 million (5 percent) said they use the Internet more to research prices as well as product details.
However, Mintel did find consumers are still prepared to pay extra for small luxuries, with a third of consumers prepared to pay more for good quality fragrances and more than one in five on skincare (23 percent) and cosmetics (21 percent). In the United Kingdom, total monies spent on beauty has risen 8.5 percent, from £15.4 billion in 2009 to £16.8 billion in 2010—going above and beyond pre-recessionary levels.
“The recession has encouraged a cost-conscious attitude to everyday beauty lines in Britain, with consumers looking for value and offers where they can," said Hilary Monk, senior retail analyst at Mintel. “However, at the same time, as consumers actively manage their budgets, they have developed a ‘skimp and splash’ pattern of shopping behavior whereby they look for affordable treats to supplement their economizing attitudes."
The beauty industry has been quick to respond to consumers’ recession-driven habits via lower-end of the market products, private label or other cheaper alternatives. Nail color is proof of this. Mintel’s Global New Products Database (GNPD) recorded a four-fold jump of 427 percent in new nail varnishes for £3 or less in the United Kingdom standing at 232 in 2010, up from 44 the year before. Likewise, the face/neck care subcategory saw a greater increase in launch activity below £15 (27 percent) than above (13 percent for prestige beauty (£15-£125). The number of new luxury face creams (more than £125) remained steady with 28 new product launches in 2010, 31 in 2009 and 30 in 2008—the previous years indicating the resilience of this end of the beauty market.
Beauty shoppers in Britain today are targeting different retail outlets for their specific beauty needs; but online purchasing still needs to do some “convincing," as E-commerce beauty sales represent just 2 percent of all online retail sales, lagging behind many other product categories. But although small, sales through this channel are growing rapidly rising by an estimated 20 percent in 2010 to some £420 million.