BW Confidential - Issue #14 - May/June 2013 - (Page 36)

Insight: Skincare Skincare devices Tools of the trade The skincare device market is seeing vibrant growth. But there are untapped opportunities and a string of challenges that brands and retailers should be aware of by Alissa Demorest S trong sales growth from device manufacturers coupled with growing consumer awareness bode well for the skincare device category. The global market for skincare devices reached retail sales of $2bn in 2012, according to market researcher Kline & Company. The US market is by far the most developed for the category, with retail sales of $1bn last year and growth of 20% on 2011, according to Kline & Company. Manufacturer’s sales in the US have grown by $100m annually since 2010. Cleansing devices, a category where L’Oréal-owned Clarisonic commands the lion’s share of the market, are the largest sub-segment, followed by light-based anti-aging devices. In terms of channel, prestige retail is surpassing direct sales, professional channels and mass in growth. All channels grew their share of the market last year over 2011, except mass, which reported a decrease in sales due partially to the still small offer. Europe is slowly awakening to the devices category. The presence of strong local players like Germany-based anti-aging brand Sqoom, and the arrival of L’Oréal-owned Clarisonic in September 2012, is set to boost the market further. Cleansing and anti-aging devices are forecast to grow their share of the pie, but according to Kline, in 2012, some 50% of device sales in Europe were still in the hairremoval segment. In Asia, Kline & Company consumer products 36 industry manager Karen Doskow notes that while Japan leads with 2012 manufacturers’ sales of $250m, China and South Korea are still underdeveloped—sales in each market were less than $75m at the manufacturer’s level last year.“In Asia, these devices are sold in electrical appliance stores and haven’t yet made it to specialty and department stores. Price points also limit the appeal of these products. When western marketers begin taking hold, then the category will grow. China is a big market for professional skincare and devices are just one step away, so I believe we’ll see strong growth there,” Doskow comments. L’Oréal ups the ante French group L’Oréal’s purchase of Pacific Bioscience Laboratories, maker of Clarisonic, in December 2011 has boosted interest from other major players. The brand saw its retail sales grow by 62% last year in the US, its largest market, and Clarisonic took the top-three bestselling spots in the prestige skincare sets category in the first 10 months of 2012, according to NPD. (Clarisonic is sold in 2,100 doors in the US and 400 points-of-sale internationally). The brand launched in Sephora in France last September and also with the LVMH-owned retailer in China in January, and is set for a further roll-out in Europe and Asia this year. Other prestige players are said to be scoping out possible buys in the sector. “Most of the big beauty players aren’t looking primarily at profits, they are looking for companies that have [multi-channel] distribution like Clarisonic, a brand that already has the public’s blessing,” explains California-based brand LightStim ceo Steve Marchese. The categories attracting “ Now that it is part of L’Oréal, it’s important to develop Clarisonic as a beauty brand and not just a device brand ” Clarisonic vp & gm of international business development Laurent Kreutz most attention are light-based devices and microcurrent tools, such as California-based Nuface—a brand that industry watchers say would be a smart acquisition target. Daniel Annese, global general manager at Estée Lauder, says that the brand would be interested in a device, but only if it had clinical information backing up its efficacy. “A device would have to perform measurably higher than any of our existing skincare, so if it’s only a little more effective, we would not ask the consumer May-June 2013 - N°14 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #14 - May/June 2013

Cover
Comment
Contents
Update
- Brand & retail news recap
- Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Clarins Group ceo Philip Shearer
Insight: Skincare
- Category overview
- Skincare devices
- Retail case studies
- The latest trends
Retail
- Amazon
- Store concepts
Digital Facebook
Market watch: China
- Country overview
- Industry viewpoint
- National domestic airports
- Department stores
- Third- & fourth-tier cities
Travel retail
- Emerging Asia analysis
- Passenger profiles
- Interview: King Power Group Duty Free & Travel Retail Hong Kong managing director Sunil Tuli
Radar Up-and-coming brands
Emerging markets Company profile: VLCC
Packaging
- Industry outlook
- Differentiation techniques
Last word Brand Keys founder and president Robert Passikoff

BW Confidential - Issue #14 - May/June 2013