Innovation vital to change post-recession consumer behaviour, Mintel

The market research company says that in the light of the recession consumers are saving money in other areas in order to spend more on certain beauty products, suggesting that this trend may come to shape consumer spending in the long term.

“The recession has encouraged a cost concious attitude to everyday beauty lines in Britain, with consumers looking for value and offers where they can,”​ commented Hilary Monk, senior retail analyst at Mintel.

Consumers managing budgets​

“However, at the same time, as consumers actively manage their budgets they have developed a ‘skimp and splash’ pattern of shopping behaviour whereby they look for affordable treats to supplement their economising attitudes.”​

According to research, 32 per cent of consumers said that they have not changed their beauty shopping habits in 2010 and 26 per cent said that they are spending less, which Mintel indicates is an example that frugal habits established in 2009 remain widespread.

Mintel’s latest research also finds that consumers are still prepared to pay extra for small luxuries, with a third of consumers prepared to pay more for good quality fragrances and over one in five would be preparted to spend more on skincare and cosmetics.

Rapid product innovation response​

Mintel claims the beauty industry has been quick to respond with product innovations at the lower end of the market as consumers maintain some recession-driven habits such as selective down-trading to private label or other cheaper alternatives, with evidence of this in the nail colour and face/neck care categories.

“Given the broader economic picture, consumers are likely to become more cautious about how they spend in 2011. As far as beauty retailing is concerned this could see shoppers looking to trade down in terms of where they shop - or more likely which brands they buy and how much they buy,”​ explained Monk.

Monk addeed that some beauty products and brands have become very commoditised as a result of widespread promotional activity and consumers will continue to seek out lowest prices and best deals.

Future growth will depend more on the treating element and the introduction of beauty and grooming services in outlets besides salons, according to the Mintel analyst.

“This in turn will depend on both consumer confidence and how well retailers and brands can convey genuine innovation and added value on both masstige and premium lines.”​ she concluded.