Growth streak continues for U.S. beauty industry

The beauty industry is going strong — at both ends of the spectrum. 

U.S. prestige beauty industry dollar sales grew by 14%, year-over-year, to reach $31.7 billion in 2023, according to Circana. In comparison, mass market beauty sales experienced a year-over- year dollar increase of 6%.

In the prestige channel which includes U.S. department and beauty specialty retailers, makeup was the fastest-growing category based on dollar sales, while skincare captured the top-spot as the fastest-growing category based on units sold. In the mass market, makeup and skincare were the only two categories to grow based on units sold. 

Circana’s receipt-based Checkout data uncovered some interesting demographic buying behaviors that coincide with teens’ and tweens’ rising interest in prestige skincare: gaining market share are 45-54-year-olds with a household size of four that includes children under 18-years-old.

Prestige fragrance sales also concluded the year on a high note. Looking at product trends, growth is happening on opposite ends of the spectrum. Higher fragrance concentrations including eau de parfums and parfums, which are also higher priced, gained three share points in 2023. On the other hand, lower priced products including mini/travel sizes and body sprays gained traction. The mini trend also manifested itself in gift sets, which was the fastest-growing segment of the fragrance market in 2023.

Across prestige hair products, hair styling was the fastest grower, with dollar sales up 24%. Hair was also the only beauty category to capture more of its sales online, with e-commerce accounting for 52% of the volume.  

“The beauty industry is strong and the outlook remains positive for both the mass and prestige sides of the business in 2024,” said Larissa Jensen, global beauty industry advisor at Circana. “This performance is remarkable given the phenomenal growth it has experienced for the past two years, but the industry should not rest on its laurels. Consumers continue to cope with economic pressures, and being in tune with their shifting mindset is a must. Flexibility, creative thinking, and effectively harnessing high consumer engagement are all part of the winning formula to drive continued growth.”