Always camera ready, millennial shoppers are buying and using almost 25 percent more cosmetics than they did just two years ago.
Meghan Roark isn’t too proud to admit she has an addiction. Her habit? Makeup.
Roark, 27, who works in retail in Abingdon, Virginia, estimates she spends $300 a month on cosmetics and skin care. She watches at least three hours of tutorials each week on YouTube, learning new techniques or keeping up on emerging brands. Her morning makeup routine takes 30 minutes and involves up to 15 products.
Young shoppers like Roark are the driving force behind a boom in the cosmetics industry. Always camera ready, they are buying and using almost 25 percent more cosmetics than they did just two years ago and significantly more than baby boomers, according to the research firm NPD. And millennials who identify themselves as “makeup enthusiasts,” NPD found, are using six products each day.
Roark, after setting aside money she had received as a birthday gift, spent $109 during a recent shopping spree at Ulta Beauty, picking up primer, foundation and a new eye-shadow palette. “I think every girl likes buying clothes, but for me, I prefer to spend my money on makeup,” she said.
The striking expansion in cosmetics is a bright spot in what is otherwise a challenging environment for retailers and packaged-goods companies. Big jumps in the sale of shimmery highlights, lush liquid stain lipsticks and dewy foundations have propelled the stocks of cosmetics giants Estée Lauder and L’Oreal to record highs.
Revenues at Ulta Beauty, which sells both prestige and drugstore brands and has been opening about 100 new stores annually in recent years, are expected to top $5.9 billion this year, up from $3.9 billion two years ago. Revenues at Sephora, part of the luxury giant LVMH Moët Hennessy Louis Vuitton, have doubled since 2011.
Moreover, the growth in the cosmetics industry is probably understated, because most estimates fail to capture sales at online retailers like Amazon.
Cosmetic companies are shifting ad dollars from traditional television and print platforms to Instagram and YouTube. Trips to exotic locations that were once reserved for editors from glossy magazines now go to influential social-media personalities from all over the world who have thousands or even millions of subscribers hanging on their every post. And brands that once partnered with actresses or models to create a new shade of lipstick or blush are now collaborating with these influencers.
When Ulta held a meet-and-greet in November at a store in Los Angeles with Jaclyn Hill, a YouTube beauty personality, nearly 700 followers stood outside for hours — some even camped overnight — to meet her.
“It was stunning,” said Mary Dillon, the chief executive of Ulta, standing inside the retailer’s first store in Manhattan just days before its grand opening in November.
Even products that have been around for decades are being “discovered” by millennials through social media. Estée Lauder’s Double Wear foundation, a product that was launched 30 years ago, is experiencing double-digit growth rates, said Jane Hertzmark Hudis, group president at Estée Lauder.
“It’s popular among millennials because it looks great in a selfie,” said Hertzmark Hudis, who also reported big jumps in sales of skin-care products — particularly masks, which play well on social media and video blogs, or vlogs.
Beauty vlogging isn’t new, but brands have rapidly ramped up their involvement with it after seeing the power it has to influence consumers.
Some of the earliest adopters of the social-media influence strategy were smaller brands that lacked the ad budget or experience for a traditional campaign. Those brands instead got noticed by putting their products into the hands of a growing army of beauty vloggers.
What has also changed is the insatiable appetite of millennials for social media. The same group that might tune out a 30-second television ad will consume hours of videos and postings. In the past year, global views of beauty videos on YouTube surged 60 percent, to 219 billion, according to Pixability, a Boston-based company that tracks influencers and provides data to brands. Pixability estimated that millennials make up 60 percent of the beauty audience on Facebook.
While it is easy — and cheap — for brands to fling free products at beauty vloggers in hopes of a positive review, brands are now forming closer relationship with them.
Influencers are being actively pursued for sponsorships — videos or posts in which the brand pays the influencer to, presumably, endorse its product. (Under Federal Trade Commission rules, video bloggers must disclose if a post has been paid for, often using #ad or #spon and #companyname to do so.)
But brands and influencers are walking a fine line as they form tighter bonds. Beauty influencers who grew their subscriber base by providing honest reviews risk losing that trust if their audience believes that they have been paid to give only glowing reviews.
For brands, there are other risks. Unlike scripted commercials with paid actresses, the brands lose some control over the messaging and content on a video blog. And many influencers, especially mega-influencers with followers that number in the millions, typically have relationships with multiple brands, raising the prospect that an unlucky product will get lost in a mix of hashtags.