NIQ Global Intelligence plc · NYSE:NIQ
NIQ Global Intelligence — NielsenIQ — GCI Beauty Accelerate Conference 2022
40 slides from NIQ Global Intelligence's conference presentation, September 2022
Slide 1: Beauty forward: What's now, what's next
Beauty forward: What's now, what's next GCI Beauty Accelerate Conference Tara James Taylor September 2022 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 2: Though beauty faces headwinds, tailwinds remain strong
Though beauty faces headwinds, tailwinds remain strong Pricing Increases Shopping Behavior Change Evolving Category Dynamics Premiumization and Innovation Clean and Sustainable Social Media's Rising Influence 2 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 3: NielsenIQ's strength and commitment to Beauty
NielsenIQ's strength and commitment to Beauty Our Investments Oct 2020 Formed separate entity Global, total omni coverage NielsenIQ Pinpoint blind spots with granularity, identify emerging April 2021 New ownership D2C competition, and Amazon sales and share Advent International Expertise May 2021 Ac
Slide 4: Beauty sales remain resilient, though soft unit sales are reason for caution
Beauty sales remain resilient, though soft unit sales are reason for caution Beauty and personal care omni dollar sales Total Beauty Omni: $77.6B +9% $/unit Total omni $ % chg Unit % chg variance 28% Q3 2021 7.1% -2.4% 9.5 Q4 2021 13.7% 2.8% 10.9 72% Q1 2022 6.5% -4.3% 10.8 Q2 2022 5.5% -6.9% 12.4 I
Slide 5: Performance varies by category
Performance varies by category Beauty and personal care categories $ % chg vs YA Growers Stable Slowing +16% +13% +10% +6% +9% +5% +6% -1% -3% Source: NielsenIQ Omnipanel Shopper period ending 8/13/2022 5 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 6: Cosmetics slowdown led by lip and slowdown in conversation
Cosmetics slowdown led by lip and slowdown in conversation Cosmetic & nail categories $ % chg Lip cosmetics slowdown Myth?: The “lipstick index,” a term Fact: Lipstick sales are slowing in Total cosmetics & nail coined during the 2001 recession recent periods and there is also a states that lipstick
Slide 7: Fragrance boom
Fragrance boom Total fragrance performance Fragrance search trends +155% +87% +65% +2,137% Refillable packaging Mini size Powder (form) Stick (form) +16% +3% +13% dollars units rise in avg price Top 5 growth brands Buyer growth Gen Z (+14%) and high-income (+8%) buyers are driving the increase in fr
Slide 8: Unit growth challenged across beauty, though specialty retailers still growing in dollars
Unit growth challenged across beauty, though specialty retailers still growing in dollars Size and growth of key beauty channels (omnichannel view) L12 weeks Under pacing Pure play inflation 10% Club • Mass 5% • Pure play Total beauty unit % chg Mass Beauty specialty • Club 0% -4% -2% 0% 2% 4% 6% 8%
Slide 9: Willingness to spend on beauty diverges among income and age groups
Willingness to spend on beauty diverges among income and age groups Generational Groups Income Tiers Gen Z Millennials Low Income Middle Income $+17% units +10% $+7% units -4% $ -3% units -11% $+3% units -8% Gen X Boomers High Income $+4% units -7% $-1% units -12% $+11% units -- Source: NielsenIQ Om
Slide 10: Private Label conversations grow in beauty
Private Label conversations grow in beauty, but users are specific over which categories they will consider trading down for Monthly post volume of "Private Label" in beauty Penetration change vs YAG Eyebrow Pencil Lip Balm 900 Concealer 800 Primer 700 Lightening Skincare 600 Blush 500 Foundation 40
Slide 11: Spa services at home as a cost savings tool
Spa services at home as a cost savings tool +26% Online hair coloring dollars Madison Reed $72.7MM Beetles Gel Polish +93% $77.2 MM +24% Mondelones Celeb Luxury $24.1 MM $6.7 MM +64% Source: NielsenIQ Ecommerce powered by Rakuten Intelligence, Total US Online, 52we 06302022 11 © 2022 Nielsen Consume
Slide 12: Looking ahead: Areas to stay focused
Looking ahead: Areas to stay focused 12 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 13: Sustainable Beauty
Sustainable Beauty +9% dollar growth vs. 1 year ago Trending in search +30% Refillable packaging +18% Plastic-free +13% Eco-friendly Source: NielsenIQ Omnipanel Shopper L52 weeks ending 8/13/2022. Label Insights Trending attributes latest 6 months ending 8/31/2022. NielsenIQ RMS xAOC L52 weeks endin
Slide 14: Celebrity Brands
Celebrity Brands Sales exceed $720MM with +37% YoY growth. Represents 1% of beauty omnisales. Rare Beauty Florence by Mills $70MM $6MM +108% YoY Growth +73% YoY Growth Even more male celebs are getting in on the action Source: NielsenIQ Omnipanel Shopper L52 weeks ending 8/13/2022. Label Insights
Slide 15: Tik Tok focused content – Engaging consumers
Tik Tok focused content – Engaging consumers New-age minimalism: "Clean Girl Aesthetic" $637M view Hair ■ Effortless and simple +36.2% growth for hair barrette sales ■ Claw-clips, blowouts +18.6% growth in Dry shampoo sales Makeup +340% search increase for "dewy" on ■ Simple, natural, and dewy Sepho
Slide 16: TikTok engagement will be critical to brand success
TikTok engagement will be critical to brand success Who is doing it well Cocokind Rare Beauty Source: Dash Hudson 16 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 17: Menopausal Beauty
Menopausal Beauty Women over 50… Brands Q: How important is a sustainable lifestyle ✓ account for 27 percent of all launching to you? consumer spending lines for women +40 ✓ hold over $15 trillion in See Me Beauty Greatest Generation 83.8 purchasing power ✓ control 95 percent of household purchasing
Slide 18: Trending search terms predict glittery fall looks, with great hair!
Trending search terms predict glittery fall looks, with great hair! Ingredients of interest vary by retailer Sephora.com Ulta.com Focus on hair and scalp health Dry spray +151% Dry spray +238% Scalp health +187% Scalp health +220% For fine or thinning hair +148% Promotes hair growth +280% Sparkly ma
Slide 19: What's Next for Beauty
What's Next for Beauty The future remains bright In Store Volume: In Store Pricing: Online Dollars: Set to Maintain Inflation to Continue Continued Growth, but muted Current Growth Rates (2019 - 2021) 1.7% +1.7% +1.9% +12.5% Projected Future Growth Rates (2022 - 2027) -0.1% to +0.3% +3.1% to +3.3% +
Slide 20: Forward focus: things to watch in 2023
Forward focus: 7 things to watch in 2023 1. Vibe of 2023: The reduction of excess 2. Mass consumption norms will be challenged — 90's rebellious beauty trends will have a moment 3. Livestream shopping experimentation endures 4. Metaverse testing grounds will flourish to reinstate brand loyalty 5. AI
Slide 21: Thank You!
Thank You! For more information, visit our Beauty Hub at: niq.com/beauty Connect with me on LinkedIn: www.linkedin.com/in/TaraJamesTaylor Tara James Taylor SVP NielsenIQ Beauty Vertical 21 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 22: Appendix
Appendix 22 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 23: Tik Tok focused content – Engaging consumers with rituals
Tik Tok focused content – Engaging consumers with rituals New-age minimalism: "Clean Girl Aesthetic" Makeup Hair Nails ■ Simple, natural, and dewy ■ Effortless and simple ■ Well-manicured, short, and polished ■ Lipstick / gloss, highlighter, neutral ■ Claw-clips, blowouts ■ Light solid colors, Frenc
Slide 24: These are the things you need to close out the year strongly
These are the 3 things you need to close out the year strongly Be thoughtful with pricing Tik Tok is the trend driver — Help consumers to actions — consumers won't make sure you have a embrace normalcy this accept rising prices forever strategy to engage holiday season 25 © 2022 Nielsen Consumer LLC
Slide 25: Trending search terms predict glittery fall looks, with great hair!
Trending search terms predict glittery fall looks, with great hair! Ingredients of interest vary by retailer Sparkly Makeup Looks Metallic appearance +179% Sephora Illuminating +1653% FOCUS ON HAIR AND SCALP HEALTH Frosted +741% Scalp health 187% 220% Glittery appearance +50% Ulta Dry spray 151% 238
Slide 26: Unit growth challenged across beauty, though specialty retailers still growing in dollars
Unit growth challenged across beauty, though specialty retailers still growing in dollars Size and growth of key beauty channels (omnichannel view) L12 weeks 10% Pure play Club 5% Total beauty unit % chg Mass Beauty specialty 0% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% -5% Drug Department store -1
Slide 27: The "clean girl aesthetic" focuses on healthy lifestyle switches
The "clean girl aesthetic" focuses on healthy lifestyle switches and enhancing natural beauty Google Trends: "clean girl aesthetic" interest over time New-age minimalism: Celebrity role models: Neutrals and barely-there makeup Selena Gomez and Hailey Bieber Source: Google Trends 30 © 2022 Nielsen Co
Slide 28: TikTok will continue to be a cultural powerhouse
TikTok will continue to be a cultural powerhouse TikTok cumulative downloads (millions) 3500 3000 2500 2000 1500 ~80M+ 90% 1000 Users in the U.S. Use the app daily; 8x per day, 68 mins per day 500 0 2017 2018 2019 2020 2021 2022 Source: Statista April 2022; SproutSocial, March 2022 Source: Business
Slide 29: Trending search terms predict glittery fall looks, with great hair!
Trending search terms predict glittery fall looks, with great hair! Ingredients of interest vary by retailer Sephora.com Ulta.com Focus on hair and scalp health Dry spray +151% Dry spray +238% Scalp health +187% Promotes hair growth +280% For fine or thinning hair +148% Scalp health +220% Sparkly ma
Slide 30: 2022 continues to be a year of transition
2022 continues to be a year of transition Adjusting lifestyles Economic anxiety Return to post-COVID normalcy Record number of flights 44% of employees are seeking a new job Inflation +8.2% Gas prices +111% 36% of American plan to travel in the next 40% of people are considering a move 3 months Cons
Slide 31: Pricing increases show variation by channel
Pricing increases show variation by channel Increase in avg price per unit by channel... Under pacing inflation Matching inflation Outpacing inflation ■ Mass ■ Drug ■ Dollar ■ Pure play ■ Grocery ■ Department stores ■ Club ■ Beauty specialty Source: NielsenIQ Omnipanel Shopper latest 12 weeks period
Slide 32: Unit growth challenged across beauty, though specialty retailers still growing in dollars
Unit growth challenged across beauty, though specialty retailers still growing in dollars Size and growth of key beauty channels (omnichannel view) L12 weeks Unit % Channel $ % chg Pure play chg 10% Club Beauty -- +14% 5% Specialty Total beauty unit % chg Mass Beauty specialty Pure Play +6% +9% 0% O
Slide 33: Beauty faces headwinds
Beauty faces headwinds E-commerce growth steadying Cosmetics softness Pricing increases Lengthening purchase cycle Purchase size slowing Impact on lower income consumers 36 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 34: Performance varies by category
Performance varies by category Beauty and personal care categories $ % chg vs YA Growers Stable Slowing 30% 25% 20% 15% 10% 5% 0% -5% -10% Fragance Deodorant HBL Sun care Facial skin care Hair care Cosmetics & Hair removal Bath & shower nail L52 YTD L12 Source: NielsenIQ Omnipanel Shopper period end
Slide 35: Willingness to spend on beauty diverges among income and age groups
Willingness to spend on beauty diverges among income and age groups Low-income Medium-income High-income 7% 3% 15% 11% 0% -3% 5% 0% -10% -11% -2% -8% $ % chg Unit % chg $ % chg Unit % chg $ % chg Unit % chg L52 L12 L52 L12 L52 L12 Gen Z Millenials Gen X Boomers 10% 7% 8% 4% 2% 20% 17% 10% 10% 0% -1%
Slide 36: Lip cosmetic google search trend
Lip cosmetic google search trend 39 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 37: Price increases taken across the biggest players
Price increases taken across the biggest players Unilever Loreal Unilever’s Chief Financial Officer Graeme Pitkethly said that Unilever has hiked prices enough to offset around PARIS, July 28 (Reuters) – L’Oreal (OREP.PA) may continue 70% to 75% of the increases in its costs. However, he to raise pr
Slide 38: Driving interest in aesthetics
Driving interest in aesthetics That Girl – 6.0B views Coastal Grandma – 211.0M views Y2K aesthetic – 8.7B views Clean Girl – 636.7M views Source: Tik Tok 41 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 39: Power of aesthetic looks to drive conversations
Power of aesthetic looks to drive conversations Aesthetics in 'lip gloss' conversations Penetration Pctl Instagram Beauty Jul 2022 formal Y2K soft glam flirty coquette aesthetic soft grunge 90's style editorial sultry sun kissed sexy dramatic glamorous soft aesthetic 0 20 40 60 80 100
Slide 40: Consumers have started sharing their bath routine on ShowerTok
Like makeup routines, consumers have started sharing their bath routine on "ShowerTok" #ShowerTok The idea? Share the products & process related to one's shower routine. On TikTok... #showertok – 3.9B views #showerroutine – 1.4B views #bodyscrub – 1.1B views ■ +37.4% $ growth for body exfoliators XA