$1.4 billion dollar beauty market ranks Canada number one Globally
TORONTO – November 12, 2014 – Canadians have become increasingly cognisant of quality when it comes to their beauty routines, spending in total $1.4 billion on prestige beauty products over the past year. That makes Canada the number one prestige beauty market globally with an eight per cent in dollar growth over the last year, well-surpassing the five per cent growth in the US. The NPD Group, a global leader in market research, sourced insights from the newly launched Canada BeautyTrends® service that shows one in 10 Canadian’s cited a willingness to cut back on other spending in order to spend more buying beauty products.
Makeup is making its mark as the strongest performing category tracked over the last annual period with a 12 per cent increase in sales. The category in Canada is amongst the highest performing globally at 35 per cent of the country’s category sales, while the US sits just above at 38 per cent of the split. The stronger performing provinces in the makeup category are seeing profound increases in sales and include Atlantic Canada (17 per cent), Alberta (14 per cent) and Ontario (13 per cent). Skincare is leading the charge with 8 per cent overall category growth, with the highest growth rates coming from Alberta (10 per cent), Atlantic Canada, and Ontario (both 9 per cent). Although fragrance was the top selling item in global markets, sales were down in every Canadian region except Alberta, up a modest one per cent. Fragrance, however, has the strongest presence, with the lowest sales in Atlantic Canada and British Columbia. Quebec under-indexes in makeup while British Columbia over-indexes in skincare.
“Canada’s expansive growth in prestige beauty is extremely encouraging for retailers,” said Sandy Silva, beauty analyst, NPD Group. “Being a global leader in the sales of makeup shows the industry is capitalizing on the evolving and diverse needs of the beauty consumer, which bodes well for sustained category growth.”
With average prices for beauty products on the rise in Canada, it is evident consumers are willing to pay more and won’t make sacrifices when it comes to budgeting for beauty. Apparel would be the first thing 48 per cent of Canadian women would cut back on. In the makeup category in particular, premium products are outpacing mass in certain categories such as foundation and eye shadow. Priced foundation and eye shadow sales are seeing the highest growth rates in prestige, with premium foundation up 40 per cent, and premium eye shadow up 5 per cent.
Runway beauty trends have drastically influenced the types of products consumers shop for. They have traded in their previous desire of heavy, dramatic makeup for something more casual and natural. The demand for prevention and primary care, alphabet creams (BB creams and CC creams), masks and other similar products have grown in popularity among consumers. On-the-go beauty products, such as multi-functional alphabet creams, are rapidly outpacing their single-feature product counterparts by a landslide, 55 per cent to be exact. The desire for natural finish foundations grew (eight per cent) whereas matte finish products dropped (five per cent). Shades are also evolving, as retailers observed spikes in sales when ethnicity is embraced. Medium to dark shades of makeup are up by 20 per cent compared to five per cent for light to medium product shades.
With luxury beauty brands showing online growth and presence, consumers have the ability to shop around with ease and compare products at their leisure. For today’s connected consumer, efficiency is key when shopping, finds NPD’s beauty market research. Consumers have less than two brands top of mind and are making advance decisions both in- and out-of-store when deciding which product to purchase.
“With runway beauty becoming naturalized over the last few seasons, beauty trends are now more achievable than ever for the consumer,” says Silva. “We are even seeing this transitioning in-store with what retailers are calling mass-tige presence in drug stores, reflective of the higher-end prestige beauty counters and ultimately making luxury feel more affordable. No longer are high-end consumers and low-end spenders exclusive. Now, they are the same consumer.”