Department stores haven’t been able to match the growth of Priceline when it comes to cosmetics – and even Chemist Warehouse has experienced a slump
Roy Morgan has released new data on the Australian cosmetics market which shows that almost one in four Australian women who buy cosmetics buy from Priceline – up from 12.8% four years ago.
During this period the number of women buying cosmetics at Priceline skyrocketed from around 620,000 to more than 1.2 million in the year to March 2019.
Women are increasingly buying health and beauty products online, Roy Morgan says: in the year to December 2018, 26% (up 8% points in four years) of Australian women buying cosmetics bought health and beauty products online.
Supermarkets have stabilised their customer patronage for cosmetics after a dip in recent years.
Nearly a quarter of Australian women who buy cosmetics (24.9%) buy from supermarkets with both Coles and Woolworths experiencing an increased number of customers buying their cosmetics products compared to four years ago.
Department stores – whether traditional stores such as Myer or David Jones, or discount department stores like Target, Big W or Kmart, have not been able to match the growth seen at supermarkets or at Priceline, Roy Morgan says.
Fewer women are buying from either type of department store.
Chemist Warehouse has also experienced a small slump in cosmetic customers in 2019, despite previous years of strong growth.
Roy Morgan highlights that an important consideration driving cosmetics purchases is consumer attitudes to the products – and what they want cosmetics to do for them.
These attitudes vary significantly across different demographics, including age, and are an indicator as to what each generation values in their cosmetic products.
When asked what are the important features when purchasing cosmetic products, 62% of women who use cosmetics answered Value for Money, followed by Natural Look (49%), Not Tested on Animals (48%), Sun Protection Factor (42%), and Quality Brand (39%).
The features mentioned by the fewest women who use cosmetics include a Glamorous Look (9%), Packaging (6%), Technologically Advanced (5%), and Advertising (4%).
Older generations of cosmetic users tended to have fewer pressing criteria for cosmetic product features.
Customers over 65 years old cared the most about Anti-Aging and Moisturising Benefits, as well as having the highest preference for products Made in Australia.
Women aged 50-64 years old cared the most about the Hypo-allergenic features of cosmetics, while 35-49 year old customers ranked the SPF features of their cosmetics higher than other women.
Younger women aged 18-24 years old and under 18 years of age both had numerous features which they ranked as more important than other age groups with more than two-thirds of these age groups mentioning Value for Money as an important feature.
Women aged 18-24 years old also cared more than other age groups about Quality Brands, Longwearing and Oil Control Benefits. They also cared significantly more than other age groups about a product being recommended by Friends/Family, indicating the value of Word-of-Mouth recommendations for cosmetics among the 18-24 year old age group.
By comparison, under 18 year old women cared more than other age groups about cosmetics being Not Tested on Animals, having Proven Benefits, a Range of Colours, and a Glamourous Look.
The features which really stand out as being important to under 18’s are Recommendation by Make-Up Artist, and Advertising. This is likely due to their relative newness to the industry and their need for information as to which products they should be purchasing. Social Media influencers would be a strong consideration for appealing to this emerging market.
“The cosmetics industry is a very competitive one with pharmacies and chemists, supermarkets, department stores and discount department stores all vying to increase their share of the market and looking for an edge to retain existing customers and draw in new ones,” said Michele Levine, Roy Morgan CEO.
“With each retailer targeting a larger slice of the cosmetics ‘pie’, it is vital to keep up with the fortunes of not just direct competitors, but all players in the market.
“Supermarkets have recovered some of their lost market share over the last year, with Woolworths attracting an older cosmetic market to their stores and Coles increasing the number of younger customers buying their cosmetics from their well-lit aisles.
“Meanwhile, Priceline is enjoying their fifth straight year of growth in the market, fueled by a hardcore base of 18-24 year olds and a successful use of the growing online channel.
“Staggeringly, 41.5% of 18-24 year old women who purchased a cosmetic product in an average six months purchase a cosmetic product from Priceline. No other retailers are seeing even close to this level of market power over a particular age group.
“Looking at the attitudes which these customers value, it’s not hard to see why Priceline has captured so much of the cosmetic market, in particular that of the 18-24 year olds. Value for Money is considered important by 68% of 18-24 year olds.”