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August 2009

Ratings agencies have recently identified "A structural shift in the personal care industry", which Diagonal Reports has been tracking for years

The “Botox standard, the Viagra of the beauty world” jolts the traditional beauty market.

Consumers switch to the time and effort easy solutions of “new beauty”

New beauty focuses on solving the top appearance concerns of face and skin care, hair removal and skin toning.

The beauty market worldwide is in transition to a new beauty culture argues Diagonal Reports in this new study. Erratic consumer spending trends in various personal appearance categories are due to fundamental changes in consumer behaviour which predate the economic downturn. This development was first noted by Diagonal Reports back in 2006 but, since then, the rate of change has sharply accelerated. Double digit growth in some face and skincare categories contrasts with stagnant performance in others. This pattern is seen across beauty salons and clinics, day and medspas from China to the US and Europe.

Exacting appearance standards are driving demand for modification of the face, skin and body. Technology innovations – such as laser, IPL, and photo-depilation - have provided new solutions which in turn have reshaped consumers’ inherited expectations of efforts to improve their appearance. Diagonal Reports' analysis of actual spending reveals that significant numbers of consumers are migrating to new beauty solutions when they become available. Ominously for traditional beauty, those consumers who cannot afford the new become dissatisfied with what is available to them. As one beauty expert in Paris explains, “Consumers who had been willing to wait for a month to see results, now become impatient if it takes longer than a day. … This is the “Botox standard, the Viagra of the beauty world.”

The traditional beauty market of facials and creams is vulnerable as new beauty erodes demand for the product and treatment categories that account for most of its sales. Traditional beauty had become complacent relying on relatively few face and skin treatments. More than three quarters of salon/spa industry revenues can come from just two beauty services. Its client base is equally narrow with no more than 20% of the population, mostly adult women, using beauty salons/spas.

In contrast, new beauty is winning the very segments of consumers long identified by the industry as crucial to its long term survival and growth – first timers, young consumers, men, and those in emerging markets. Almost half of women clients are first time users of these new beauty salons and clinics and they are mostly under 35 years.

In this research, Diagonal Reports examines the case of skin care in a changing beauty market. Skincare accounts for approx 40% of professional beauty industry revenues. Facial skin care products and therapies command a price premium because the face is the most visible body part. New beauty attracts a broad range of consumers for face care treatments since the technology solves a wider range of skin problems than did the older methods.

Crucially in addition to new technology, commercial innovation has created new business formulas - in terms of delivery time and treatment menus- which have brought the salon/spa culture into line with contemporary lifestyles, discarding a business model originally developed fifty years ago.

Key terms: Advanced Aesthetics, Appearance Transformation, Anti-ageing, Body shaping/contouring, Camera Ready Appearance, Cellulite, Depilation, DIFM and DIY Beauty, Non Invasive, Soft Tissue Modification, Transformational Aesthetics

Report: Table of Contents for New Beauty for New Consumers 2009
Date of publication: 9th July 2009
Countries covered: EU, US and China

Diagonal Reports is the leading expert on the global professional beauty market. It has been tracking the professional beauty and wellness market industry for the last 10 years globally. Its research reports are based on in-depth interviews conducted with experts drawn from the largest beauty and wellness providers (salons, dayspas, medspas, laser and IPL clinics) in the US, Europe and China. Diagonal Reports identifies changes in consumer behaviour and determines market growth to allow its clients to increase sales

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