OVERVIEW OF THE 1999 U.S. COSMETIC MARKET

The U.S. cosmetic market is fairly stable and approaching maturity. 1999 retail sales reached $21 billion, up almost 7% from 1998. Factors contributing to this growth are:

• An acceleration of cross-distribution, with salon lines being sold in Prestige doors, health food store lines selling in mass venues, and key brands creating new opportunities in branded day spas, kiosks, catalogs and web sites.
  
  
• Generational marketing focused on the teen market, trickling down to the younger tween group. A nominal amount of attention was paid to maturing skin.
  
  
• Pampering took a front row seat with all the new spa lines and spa-oriented products that encompassed aromatherapy, colortherapy, holistic mysticism and new age positioning.
  
  
• The day spa influence was strong, especially in the Skin Care and Bath & Body segments.

The Skin Care market share is unchanged, even with the market saturation of hydroxy acids. Balancing that are a flood of transdermal patches, enzymes, vitamins A and C products, and a myriad of new niche lines. The importance of teens and tweens was evident in products for troubled, oily and acne-prone skins.

Multi-color, multi-product palettes, brushes & applicators and makeup planners helped shape the year for Color Cosmetics. Makeup artist lines went mainstream with Sonia Kashuk, a brand that also served as a pioneer (for Target) in private label makeup, along with Sephora and Ulta.

Important factors for the Body & Bath market were bath kits, children's lines, continued targeting of teens and tweens, aromatherapy, candles and incense, and Asian-inspired products and packaging.

Fragrances were flat. This is a mature market struggling to maintain sales. One strategy was to launch fragrance collections - this was done with old standbys like Guerlain, as well as by newer brands like MAC, L'Occitane and Sage.