Euromonitor International’s Beauty Survey team has published a new case study on “How to target premium beauty buyers”. It offers insight into premium beauty buyers’ grooming habits, product preferences and purchase motivations as premium categories become the key growth engine for global beauty.

1. HOW TO TARGET PREMIUM BEAUTY BUYERS?
Beauty Survey User Case Study
May 2016

2. © Euromonitor International PASSPORT 2BEAUTY SURVEY USER CASE STUDY
 The company wanted to identify and target premium beauty buyers to grow its prestigious brand portfolio.
 In an increasingly dynamic and competitive premium beauty landscape, it is a growing necessity to gauge
consumer sentiment, in particular consumers’ attraction towards premium beauty vs their actual purchase
activity. As part of this assessment and to aim to address potential gaps and inconsistencies between the
two, marketers should consider the following Beauty Survey indicators in the context of the overall Beauty
and Personal Care premium environment and purchasing behaviour:
How big is my premium beauty consumer base?
What are premium beauty buyers’ grooming habits?
What are these premium consumers’ reasons for purchase?
What is influencing premium beauty buyers’ product selection? How digitally influenced are they?
What are their most desired product features?
Where are premium beauty buyers most likely to purchase their products?
How willing are they to try new products vs already familiar ones? How brand loyal are they?
How do premium beauty buyers perceive my brands and my competitors’?
 Euromonitor International’s Beauty Survey results are drawn from 20,000+ online consumers ranging in
age from 15 to 70+ collected in 21 markets: Australia, Brazil, China, Colombia, France, Germany, India,
Indonesia, Italy, Japan, Middle East (Egypt, Lebanon, Saudi Arabia, and UAE), Mexico, Nigeria, Poland,
Russia, South Africa, South Korea, Thailand, Turkey, the UK and the US, in 2015.
Background
HOW TO TARGET PREMIUM BEAUTY BUYERS?

3. © Euromonitor International PASSPORT 3BEAUTY SURVEY USER CASE STUDY
0% 50% 100%
Skin care
Hair care
Colour
Cosmetics
Ratio of Premium Beauty
Buyers by Category -
2015
Prestige/premium buyer*
Not a premium/prestige buyer
 Assessing premium beauty
buyers’ preferences vs actual
spending on premium beauty
products reveals the clear
potential to expand revenues in
the premium segment, especially
in hair care.
 To fulfil this potential, it is vital to
first understand consumers’
routines and product usage
frequency, both in the context of a
brand’s specific product portfolio
as well as regimen patterns seen
in other beauty categories across
different markets.
 In this case, hair care is
becoming increasingly akin to
skin care in terms of product
diversification and routine
approach, which signals the need
for a closer interrogation of
product usage and habits across
the two categories….
0% 50% 100%
Skin Care
Hair Care
Colour
Cosmetics
Premium vs Mass Market
Value Ratio by Category -
2015
Premium Market Value Size
Mass Market Value Size
Sizing the consumer base of premium beauty
HOW TO TARGET PREMIUM BEAUTY BUYERS?
* Note : Premium buyers are identified as consumers who agreed with at least one of the following in
reference to their recent purchase of hair care, skin care, and/or colour cosmetics products: they
strongly or somewhat prefer luxury brands, relative to budget brands; they look for premium or luxury
brands as a key product feature; they strongly or somewhat prefer premium ingredient formulations,
relative to lower price; one of their main motivations to purchase is to maintain or achieve a certain
social status.

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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Premium
buyer
Non-Premium
buyer
Breakdown of Beauty
Buyers by Type of Hair
Care Routine
Extensives (4-7 Hair care products
used weekly)
Moderates (2-3 Hair care products
used weekly)
Minimalists (0-1 Hair care products
used weekly)
 Premium buyers clearly tend to use
more products than non-premium
buyers as part of both their hair and
skin care routines.
 That said, regional differences are
significant; while in China and
South Korea over 50% of premium
buyers are ‘extensives’, in countries
like France, Germany and the UK,
premium buyers tend to be
‘moderates’ or ‘minimalists’.
 Given the strong influence of Asia
on international beauty markets, we
are already seeing the inclusion of
mists, essences and emulsions –
typical in Asian consumer routines
– as part of existing skin care
portfolio expansions.
 Taking note from skin care, there is
definite scope for diversifying hair
care products and formats given
the closer alignment between the
two categories.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Premium
buyer
Non-Premium
buyer
Breakdown of Beauty
Buyers by Type of Skin
Care Routine
Extensives (8-14 Skin care products
used weekly)
Moderates (4-7 Skin care products
used weekly)
Minimalists (0-3 Skin care products
used weekly)
Premium beauty buyers have more extensive beauty routines
HOW TO TARGET PREMIUM BEAUTY BUYERS?

5. © Euromonitor International PASSPORT 5BEAUTY SURVEY USER CASE STUDY
 Turning now to purchase decision-making,
we note that although the reasons for
purchase for premium and non-premium
buyers are not significantly different,
premium buyers have higher expectations of
tangible results, and to achieve it, they are
more ready to try to new things aligned with
their changing needs.
 While premium prices require justification
from perceived efficacy and high
performance, monitoring evolving needs and
trends is required to offer premium
consumers new-to-them and solution-oriented
products.
 Premium buyers are on the lookout for deals
as much as value buyers. In the current, more
vulnerable macro environment, which is
characterised by greater focus on experience
rather than possessions, we also see the
transition from traditional conspicuous
consumption to more rational, results-oriented
purchases, particularly in the premium
segment.
0 10 20 30 40
To simplify my routine
Looking for product that works
better than current product
Found a great deal or item on
sale
To try something new
New or changing skin needs
To improve the look or feel of my
skin
Need to replace because my
current product ran out
% of respondents
Skin Care: Premium vs Non-Premium Buyers
Reason for Purchase
Premium buyers Non-premium buyers
Premium buyers more results-oriented and ready to experiment
HOW TO TARGET PREMIUM BEAUTY BUYERS?

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0 20 40 60
Claims on label
International brand
Ingredient formulation
Multi-functional benefits
Strong or well known…
Natural or organic
Functions and/or benefits
Super-high quality
Value for money
Suited to my skin type
% of respondents
Skin Care: Premium vs Non-Premium
Buyers Desired Product Features
Premium buyer Non-premium buyer
 Unsurprisingly super-high quality ranks high on
premium buyers’ most desired product features list,
but so does value for money – which is as important
to premium as to non-premium buyers.
 Beyond price and efficacy, premium buyers’ values
are shifting towards ethical credentials and
authenticity as shown by higher preference for
natural or organic formulations, as well as connection
with the brands’ story.
 In terms of brands’ origin, it is twice as important for
premium buyers that a brand has an international
presence, compared to non-premium buyers.
 Although currently a number of niche, local/regional
brands are showing strong growth performance in
premium categories, their market value share gain is
strongly driven by their international expansion.
 Entering new geographies has long been an
essential part of successful premium brands’ growth
strategies. but it also needs to be exploited as a
brand building tool. Successfully leveraging
international presence means increasing alignment
with local beauty cultures and habits and addressing
market-relevant concerns.
International, ethical quality brands appeal more to premium buyers
HOW TO TARGET PREMIUM BEAUTY BUYERS?

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 Premium beauty buyers are more
likely to be digitally influenced than
the general consumer base.
Targeting premium buyers through
the most effective digital marketing
channels is becoming an integral
part of brands’ identities.
 Taking cues from well performing
niche premium brands with strong
consumer engagement through
bloggers/vloggers and interactive
social media sites would benefit a
range of heritage premium labels
with still limited digital presence.
 Interestingly, more male premium
hair care buyers are influenced by
beauty blogs and expert reviews
than female. While in female social
groups, beauty products are
commonly being discussed, male
consumers seem to turn more to
blog posts and online reviews
about grooming issues.
20
30
40
50
60
70
80
Male Female
%ofpremiumbuyersinfluencedbybeautyblogpostsor
expertreviews
Beauty blog post or
expert reviews’
influence on purchase
decision-making
0 10 20 30 40 50 60 70
Sale/discount offer in-
store
Free sample
Previous personal
experience
Information or
recommendations
from spouse/partner
TV ad
Online user reviews,
communities or forums
Doctor or medical
professional
recommendation
Social networking site
Beauty blog post or
expert review
% of premium buyers
Premium Hair Care Buyers’
Influencers
Strong digital influence on premium purchases
HOW TO TARGET PREMIUM BEAUTY BUYERS?

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 Department stores and multi-brand beauty specialist retailers are still the main outlets for premium brands.
However, freestanding stores are growing in significance as brands tap into opportunities offered by this
developing channel, such as establishing a direct connection with the consumers and targeting a younger
audience with in-store digital engagement.
 Online platforms are also over-taking some traditional premium channels, such as airports’ duty free shops
and salons/spas.
Channel positioning needs to remain selective but expand online
HOW TO TARGET PREMIUM BEAUTY BUYERS?
 All of this channel
diversification must be
aligned with
premiumisation
strategies.
 Although channel
positioning needs to
remain selective,
presence on a wide
range of online sales
platforms is a growing
necessity.
 Mobile enablement and
integrated payment
solutions are key for
premium shoppers in a
digital age.

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 Premium buyers are three times more likely to
experiment with new and/or trendy products than
non-premium buyers. That said, overall premium
buyers – like non-premium buyers – tend to be
brand loyal, so larger brands have an advantage
that they must work not to lose.
 The steady appetite of premium buyers for latest
trends, technologies or formulations needs to be
satisfied through format innovations in order to
sustain their brand loyalty.
 Premium brands need to tap into new formats
that introduce a combination of new claims, such
as higher efficacy for serums, easy application of
foams or sustainability credentials of powders.
 Brand loyalty also needs to be enhanced by
incentives that reward repeated purchase; these
can include giving first access to new launches,
as well as creating special status and points
schemes leading to discounts. As premium
buyers are still driven by status, adding
something that can not simply be purchased will
provide some privileges and create cachet.
0 10 20 30 40 50
Brand loyalty: Always or
sometimes buy the same
brand
Willing to try brand/product
that is on trend and new to
me
% of respondents
Skin Care: Premium vs Non-Premium
Buyers’ Brand Loyalty and Willingness to
Try New Products
Premium buyer Non-Premium Buyer
Brand loyalty vs steady demand for innovation
HOW TO TARGET PREMIUM BEAUTY BUYERS?

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 Brand perception is the least controllable element of premium positioning in comparison to pricing or
distribution strategy, although all have a major impact on how a brand is perceived beyond its efficacy.
Managing evolving brand perceptions
HOW TO TARGET PREMIUM BEAUTY BUYERS?
Addressing target audience through most influential platforms
 Brand experiences and perceptions are developed over time
through a variety of sources. Given that premium buyers are highly
digitally influenced, campaigns on social media and user review
sites are powerful platforms for managing brand perception.
 The expansion of standalone channels for premium brands builds
stronger direct and fully controlled connections to consumers.
Counteract negative influencers
 Brand perceptions evolve over time and
that makes management more
challenging and more essential to
counteract all negative influencers with
quick responses to dissatisfaction
expressed.
 Given that high efficacy claims are the
foundations of premium positioning,
monitoring feedback about quality must
be one of the most important aspects of
managing brand perception.

11. © Euromonitor International PASSPORT 11BEAUTY SURVEY USER CASE STUDY
How to target premium beauty buyers? – Key takeaways
HOW TO TARGET PREMIUM BEAUTY BUYERS?
Assessing premium beauty buyers’ preferences vs actual spend on premium beauty reveals
clear potential for expanding revenues in the premium segment.
Premium buyers have a demonstrated a tendency to use more products as part of their
routine for both skin care and hair care.
Premium buyers have higher expectations of tangible results, but are similarly on the
look out for discounts, as much or more so than non-premium buyers.
Premium buyers are more likely to be digitally influenced than the general consumer
base, which means e-campaigns are excellent brand-building and management tools.
Alongside department stores and multi-brand beauty specialist retailers, freestanding
stores are growing in significance as brands are tapping into opportunities offered by this
channel development.
The steady appetite of premium buyers for latest trends, technologies or formulations needs to
be satisfied through format innovations in order to sustain or grow their moderate brand loyalty.