Skincare - Wipe out!

Source: Middle East Grocer

Skincare product manufacturers first put forward the concept of the cleanse, tone and moisturise regime back in the 1980s, and ever since have reaped the commercial rewards of educating consumers about the need to use three products each day, ideally on a twice-daily basis. Twenty years on, the market remains lively and in developed markets, the past five years have seen total skincare
sales rise in real terms in the region of 29%, to reach £509 million (source: Mintel: UK skincare report). Having a skincare line has become a must for just about every personal care manufacturer
on the market.
Moisturisers make up by far the largest market sub sector, accounting for almost three in five skincare items sold by value and hence, have become a key segment for new product development (NPD).
However, by rate of sales growth, cleansing wipes have become something of an emerging star, and at the same time have challenged the places of cleanser and toning products in the market.
Mass-market producers account for around seven in ten skincare products on the market, which has been to the grocers’ advantage. Even in countries where there is strong competition from the pharmacy sector, the grocery sector has managed to increase market share through the use of
tactical promotions and a strong focus on providing consumers with the widest choice of brands.
The Gulf region is no exception. In Saudi Arabia, for example, grocers have a 60% share of a market handling nearly 866 litres of business per annum. In the UAE, which handles approximately 272,000 litres per annum, grocers’ share of the skincare market rises to 85.8%.

Cleansers

Over the past five years, the cleansing market has produced sales winners and losers. A key loser of late has been facial cleansing lotions, sales of which have generally been in decline over the past five years, in some developed markets by as much as 8%, as consumers increasingly buy into the more convenience offering of cleansing wipes. In the UK, for example, cleansing wipe format products are to date considered the sales phenomenon of the 21st century, sales having grown from £8m in 1999 to £93m in 2004, according to international market analyst Mintel.
Growth has been aided by the fact that virtually all mass-market skincare ranges have cleansing wipes within their line-up, positioned either as an essential, multiaction convenience product to be used alongside more traditional forms of cleansing, or as a standalone product.
Wipes are also becoming more sophisticated, offering additional benefits in addition to cleansing and toning, such as removing waterproof make-up and offering long-term moisturisation. New product development in this sector has also included the arrival of the doublesided wipe, which is designed to exfoliate like a scrub on one side and cleanse like a facial wash on the other.
Another recent winner has been facial scrubs and washes, sales of which have risen 15% over the five years to 2004 in developed markets such as the UK.
Despite market analysts’ increasing doubts over the long-term viability of scrubs and washes sub sector in a wipe dominated market, manufacturers are still looking to it to produce sales gains. Recent NPD has seen the introduction of a new cleansing format, the cleansing mousse or gelmousse,
targeted at younger women. Some ranges also contain active antiageing ingredients.

Toners/astringents/fresheners

Toners/astringents/fresheners have also found the competition from cleansing wipes hard-going. Already the smallest of the facial regime sectors, toning products have seen the value of their sub sector plummet over the past five years, in some markets by as much as 36%, as consumers ditch the three-step regime in favour of the ‘one wipe does it all’ approach.

Moisturisers

Sales of moisturisers have been driven over the past five years by new product development, with the result that developed markets have seen the value of this sector increase by as much as 22%. Key to this new product development has been the use of, and importantly, the communication to consumers of "the science" behind the product. Manufacturers see this as a way of creating a point of difference in competitive markets, which is especially true of anti-ageing, where rates of investment in research and development are highest and where the retail prices are at their most premium. Ingredients such as active copper, which is naturally found in the body and which is known to play a role in the strength, flexibility and elasticity of the skin, are now commonplace.
When added in sufficient quantities and concentrations, manufacturers claim that their products will make a visible difference to consumers’ skins. Drawing on the experience of the pharmaceutical sector, this opens up a whole new market niche in skincare, the cosmeceutical.

Encouraging a regime

Maintaining use of a threestep/product regime is important for both manufacturer and retailer alike, for the obvious commercial reasons. Fortunately, for retailers, the major suppliers spend vast sums - in the UK in 2003, for example, the main media advertising spend on facial skincare products reached £69.2 million with an advertising-to-sales ratio of 13.6%. Leading advertisers included P&G, which spent £16.5 million on Olay; L'Oreal, which spent £10.8 million in Dermo-Expertise; and Beiersdorf, which invested £10.2 million in Nivea Visage. Good news for Gulf grocers, which enjoy real success with Olay and Nivea lines.
However, there are clouds on the horizon. In its recent report on the skincare market, Mintel reveals that there is growing consumer cynicism regarding the value of skincare products. Exclusive
research for the analyst reveals that up to two thirds of respondents regard drinking lots of water, eating a good diet and maintaining a healthy lifestyle as better for the skin than any skincare product. This is a particularly common opinion among women aged 35-64, who are, unfortunately a key skincare product user group.
Recognising this, manufacturers have looked at new ways of targeting their products to make them more relevant and credible. One approach has been to segment their product offering to provide tailored skincare solutions based on age, skin type and lifestyle, with an emphasis on treatments formulated to delay the signs of ageing. Common sense would suggest that your layout and use of point of sale information should convey the same message.
Skincare manufacturers have also identified a potential new market in women aged 50+ years and have developed two methods of attracting the grey dollar. Natural ingredients which offer 'mood' benefits are one approach – premium skincare company Guerlain, for example, now markets a Happyology antiageing skin cream with a pro-endorphin complex designed to trigger the same physiological responses as those induced by happiness. The other is providing an alternative to cosmetics procedures such as wrinkle-reducing Botox injections and micro-dermabrasion. The task for you, as retailers, is to create an environment in which women of this age group feel comfortable, and to convey the product benefits being offered.
Interestingly, few premium-end brands support their skincare brands with above-the-line advertising, but invest in below-the-line support such as public relations, POS and the training of sales consultants. It is worth considering hiring such consultants in your store, even if only on a one day a week basis.