While total beauty sales were down across the combined markets, consumers are switching channels in some key categories, which could present opportunities in today’s challenged marketplace, according to a new report from market research providers The NPD Group, Inc. and Information Resources, Inc. (IRI). The findings are part of results of the first year of the two firms’ partnered product, the Beauty Cross Channel Monitor—the U.S. beauty industry’s first and only point-of-sale tracking product that looks at sales performance in department stores (prestige) and the food, drug and mass market, excluding Walmart (FDMx).

“For the first time we have the ability to take a broader view of the U.S. beauty industry,” said Diane Nicholson, president, beauty, The NPD Group, Inc. “When looking across total channels—department stores and food, drug and mass channels, excluding Walmart (FDMx)—we can size the market at $19.1 billion dollars, representing approximately 60% of the U.S. beauty industry.”

Historically, the beauty industry has weathered store closings, recession, and war with strong sales, but, in 2008, the beauty industry suffered the same fate as most industries and posted declines.

Nevertheless, there were pockets of growth and opportunity, driven by some channel shifting by consumers.While department store sales of makeup declined, makeup posted a slight increase in the FDMx channel.Conversely, the hair segment, although representing a relatively small portion of the prestige business, grew by 6% in department stores versus the decline of 4% in mass, where hair represents a larger portion of the overall business.

Skin care sales remained steady across all channels.A bright spot worth noting is the facial skin care segment, which represents 40% of the overall skincare business and rose by 1% across all channels, driven by a more healthy performance in mass, with 2.1% growth in 2008.

“In this ever changing and challenging environment, the ability to understand the market dynamics across channels is more crucial than ever.” said John Deputato, senior vice president, client solutions, IRI. “Our clients are very interested in how consumers are changing their shopping patterns.”