European prestige beauty sales notch strong growth – Circana

Prestige beauty sales in Europe held up strongly in the first nine months of 2023 despite a difficult economic context and inflation, according to market research outfit Circana.

Across France, Germany, Spain, Italy and the UK, prestige beauty sales grew 13% in value between January to September year on year.

Within prestige beauty, skincare demonstrated a healthy growth, where unit sales grew by 7% and value sales by 10% to €2.3bn during the same period.

“This is partly because consumers are more informed about their skincare purchases. They are researching trends online, soaking up insights from influencers who share their skincare routines, and are sharing stories with friends,” said Mathilde Lion, executive director for global client development at Circana.

“As a result, they are more knowledgeable about which products are going to be better for them, according to their skin type and age,” she added.

Circana’s definition of prestige beauty is based on distribution through major store and online retailers.

In the UK for example, retailers include Boots, John Lewis, Fenwick, Harrods, Harvey Nichols, Liberty, Look Fantastic, Next, Feel Unique, Asos, Sephora, Superdrug, The Perfume Shop and Fragrance Direct.

Serums, toners, and lip treatments were particularly popular product areas and contributed greatly to the growth seen in prestige skincare.

Unit sales of serums, for example, grew by 23% in the last year as consumers were seeking products offering a higher concentration of the best ingredient.

Meanwhile, the hot summer temperatures across much of Europe this year and increased awareness of sun damage saw demand for prestige suncare products on the up.

Circana pegged sales of suncare products as increasing by 12% in value and 5% in units, driven mainly by the in-sun face segment, which grew by 14% volume, adding 20% to value sales.

At the higher end of the market, the market research firm says products with a value of greater than €250 grew 18% in value.

“While the DNA of some brands is fully anchored in the ultra-premium environment, most skincare key players have also developed an innovative and ultra-premium product to add to their range; typically offering rare or highly concentrated ingredients,” said Lion.

“One of the most recent entries into this arena being from the European skincare leader Clarins. Its Clarins Precious range focuses on a precious moonlight flower that blooms just one night a year,” she added.

At the opposite end of the market, products priced under €50 saw volume sales growth of 58% over the last year.

This is led by some entry-price brands stocked in prestige stores that are attracting new consumers through very specific skincare products.

As an example, The Ordinary entered the top 10 European skincare brands by value in the last three years and has become the most purchased brand in units in prestige beauty stores.

However, Circana says brands in the middle of the pricing spectrum (products sold between €50- 100) are being squeezed and must find new ways to differentiate and appeal to the new beauty consumer.

In addition, while all countries are showing positive growth in value, there are early signs of a slowdown in consumer skincare purchases.

France, for example, posted a 1% decline in unit sales in the year to end September 2023 versus a year ago, compared to a 19% growth in the UK during the same period.

Understanding what drives consumer demand across countries, channels and brands is critical for success, said Lion.

“Smart brands that adapt their strategy to each specific element of the path to purchase – be it the desire for ultra-premium or a specific skincare ingredient - will create meaningful differentiation in what is becoming a highly competitive and innovative category.”

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