Cosmetics market shifts up in age

December 8th, 2014 by Philip Brasor & Masako Tsubuku

Poster for Shiseido makeup outside discount drug retailer Matsumoto Kiyoshi

Poster for Shiseido makeup outside discount drug retailer Matsumoto Kiyoshi

You can tell how important an industry is to the media by how many news outlets cover the same story in the same way. What happened was a company put out a press release that everyone feels obligated to cover since the company is a major advertiser.

Last week everyone mentioned that cosmetics maker Kao will be coming out with a new line of eye shadow targeting older women under its Aube brand. Makeup specially formulated for older consumers isn’t a new thing, but what makes Aube Couture Bright Up Eyes of more than just passing interest is that its main appeal is the application rather than the wearing. When older eyelids become flaccid, it’s more difficult to put on eye shadow evenly, so Kao came up with a special foundation that makes it easier for the customer to apply the shadow on top of it. In addition, the case comes with a special 2X magnifying mirror for older eyesights.

Shiseido also announced a brand new line of 33 items for older women called Prior that will come out Jan. 21 and is centered on a cream that gives the skin a glossy tone which “medicates” wrinkles and age spots as a way of “reducing” them. It’s another way of saying that the cream covers them up. It also obviates the need for foundation, thus making it “easy to use.” Also, Prior’s eye shadow comes in a box with instructions in large type and photos to make it easier for consumers to understand how to apply it.

According to the article Tokyo Shimbun ran, in 2013, Shiseido’s sales of cosmetics targeting women over 50 increased by 7.4 percent over 2012. In terms of the entire cosmetics market, sales to women over 50 account for 46.7 percent. Shiseido’s president said in the press release that “boomers are becoming a huge” market for the company, so Prior will be a priority.

And since older consumers tend to spend more than younger ones, the cosmetics industry is looking at good times, at least until the boomer generation dies out in another decade or two. In Japan, cosmetics companies have always been able to charge a bit more for their products because consumers have been conditioned to expect makeup to be expensive. Aube Couture Bright Up Eyes will retail for ¥4,100 and the Prior Skin Cream will cost ¥3,240.

This sort of market conditioning was made possible by laws that used to categorize cosmetics as health care products, and thus were regulated more stringently. Like drugs, cosmetics had to be sold by dedicated salespersons who could explain the proper use to the customer in person, so they were sold in manufacturers’ outlets or at specialty counters in department stores.

Some companies, like Pola and Nivea, used door-to-door sales staff to sell their products. If a pharmacy wanted to sell cosmetics, they would have to set aside a special space and bring in a professional to sell them. All this extra attention gave cosmetics added value.

But retail laws were liberalized in the ’90s, and by the end of the decade you could buy cosmetics almost anywhere. According to Fuji Keizai Research, which estimates the size of Japan’s cosmetics market to be as much as ¥5 trillion — or about ¥35,000 per household — the largest channel for sales in 2013 was through discount drug stores, about ¥681 billion. In second place was direct sales/mail order, at ¥307 billion. Then, in descending order, general discount stores (¥287 billion), dedicated cosmetics stores and pharmacies (¥226 billion), door-to-door (¥206 billion) and department stores (¥187 billion).

Except for cosmetic stores and door-to-door — meaning traditional outlets for cosmetics — all channels saw a rise in revenues from 2012 to 2013. And don’t forget that male cosmetics is considered a growth industry in Japan.

The main difference between older cosmetics consumers and younger ones may very well be how much attention they expect. Older women are used to the personal touch and may feel that they need coaching when they buy a new product, while younger women don’t. In fact, another retail operation where cosmetics sales are rising is convenience stores, which by their very nature don’t provide consultation. And Japanese cosmetics are weighted heavily toward skin treatments, which don’t qualify technically as makeup.

Consumers are more interested in healthy skin than decoration, but obviously the older you get the more help you need in that area.

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One Response

  1. http://research.stlouisfed.org/fred2/graph/?g=TTy

    is a graph of three demographics — age 25 to 54 (down ~10% from its 2001 peak), 55-64 (which peaked 2005-2012 as the baby boom aged into this bracket), and 15-24, down 30% from its early 1990s boomer-echo peak.

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