Beauty is ‘darling’ of retail as sales continue to surge
U.S. consumers aren’t cutting back on beauty items.
U.S. prestige beauty industry sales totaled $14 billion in the first half of 2023, up 15% from the year-ago period. In comparison, the mass beauty market generated $28 billion and grew 9%, according to Circana, formerly IRI and The NPD Group.
“Beauty continues to be the darling of retail through the first half of 2023, maintaining its position as the only industry to grow based on units sold across the general merchandise and consumer packaged goods categories Circana tracks,” said Larissa Jensen, beauty industry advisor at Circana. “The beauty industry is hitting the right notes, meeting consumers’ emotional needs through new and existing products, which is especially welcomed at a time when spending power continues to be squeezed.”
Makeup ended the first half of 2023 as the fastest growing category within the prestige market, with sales revenue up 18%, and outpaced sales at mass merchants by growing at twice the rate. The “Lipstick Index” phenomenon continues to prevail, with lipstick the fastest-growing segment across all the beauty categories, and inclusive of both prestige outlets and mass merchants.
Face serum, body spray, and facial cleansers were the top gainers in the prestige skincare market for the first half of the year. Fueled by new launch activity, clinical brands brought in the majority of the prestige skincare sales gains.
Gift sets, higher concentration fragrances, and mini sizes are outperforming the overall prestige fragrance market. Sales of fragrance gift sets grew by 26%, or twice the rate of the market. Eau de parfums and parfums were the only formats to experience a year over year increase in units sold. Minis, or fragrance sizes under one ounce, accounted for 38% of total fragrance juices sold.
Although sales revenue is significantly higher in the mass market, hair product sales continue to grow at a faster clip in the prestige business, with online capturing about half of the sales. Furthermore, hair is the category with the highest average price increase in the prestige beauty market, growing at three-times the rate of the overall industry. Styling was the fastest-growing segment in prestige hair for the first half of the year.