Beauty industry sales remain buoyant, but the drivers of its growth are evolving.
According to Circana, prestige beauty dollar sales grew 14 percent this year through September; and mass market dollar sales grew 8 percent during the same period.
Unit sales continued to rise across all prestige categories, while mass unit sales were down 2 percent and 3 percent in hair care and fragrance, respectively, though average price increases propped up revenue growth in the categories.
Cosmetics and skin care, however, “are healthy categories in both mass and prestige,” said Larissa Jensen, senior vice president, global beauty industry adviser at Circana.
Makeup maintained its position as the fastest-growing category within prestige by revenue growth, posting $7.1 billion in sales year-to-date, up 16 percent versus last year. Lip makeup was the fastest-growing segment, driven namely by lip oils, balms and glosses, though lipstick sales also rose.
According to Checkout, Circana’s receipt-based tracking service, spend per buyer on makeup increased 10 percent this year, while purchase frequency rose by 4 percent.
“We see a trade-up happening in categories like makeup and hair; designer brands make up about 10 percent of sales, give or take, but they’re growing at a faster rate of more than 20 percent in terms of dollars,” said Jensen, noting that in skin care and fragrance, an opposite shift is beginning to take place.
Skin care was the fastest-growing category in prestige so far this year based on units sold, and the sole category where average prices remained flat. A growing shift toward “lower-priced brands in the prestige skin care universe,” Jensen said, is “driving unit sales in a big way” within the category. Two of the biggest growth drivers were face serum and face creams, which were up 21 percent and 12 percent in dollar sales, respectively.
In fragrance, too, luxury units sold have only risen 1 percent this year, though the category at large has seen a 13 percent revenue increase.
“Luxury fragrance has been outperforming the fragrance category for quite some time, and 2023 is the first time we’re starting to see a slowdown in that,” said Jensen, adding that because many consumers stocked up on luxury fragrances following the category’s initial post-pandemic boom, they are now turning to value-focused offerings such as fragrance sets — sales of which increased at more than double the rate of juices this year — body sprays, and smaller bottle sizes.