The beauty industry is still up.
According to Circana, dollar sales have continued to accelerate in both prestige and mass beauty, growing a respective 15 percent and 9 percent during the first half of 2023.
Prestige beauty posted $14 billion in total sales during the period; mass beauty generated $28 billion.
In prestige, sales saw a boost thanks to continued growth in unit sales, or number of products actually sold, in every category, while mass sales primarily grew because of average price increases. (Beauty prices have increased 9 percent on average in mass, verses 2 percent in prestige).
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“It is still the case that prestige beauty is the only industry across general merchandise and CPG to be growing in units,” said Larissa Jensen, vice president of beauty at Circana. “Unit [sales] on the mass side are down for hair and fragrance, even though everything is up in dollars.”
Makeup was the fastest-growing category in prestige, up 18 percent in dollar sales and 13 percent in units. Skin care, fragrance and hair saw respective 14 percent, 13 percent and 13 percent dollar sales increases in the channel.
“Hair is bigger in the mass market, but it’s growing faster in prestige,” said Jensen, noting the category is up 6 percent in prestige unit sales. “We’re seeing growth in units, but not at the rate we saw before, so this is really an average price story on the prestige side for hair.”
While prestige fragrance continues to soar, unit sales growth is beginning to soften.
“We’re seeing 8 percent unit growth, which is still very strong, but it’s softening versus what it was before,” said Jensen, adding that value-driven consumers continue to reach for higher concentrations, gift sets and mini sizes.
Lip makeup, meanwhile, was the fastest-growing product category for both channels.
“Makeup usage is up three points versus last year — it’s actually surpassed pre-pandemic levels, and that is across mass and prestige,” Jensen said.
While skin care is seeing dollar and unit sales growth in both channels, 42 percent of consumers report they have begun using makeup products with a skin care benefit to replace certain steps in their regimens. “So think tinted moisturizer, foundations with SPF — that sort of thing,” said Jensen, noting targeted skin care products, like those which address age spots or brightening, are seeing an uptick in usage.
Though prestige beauty has remained buoyant even amid economic uncertainty, Circana anticipates growth will begin to soften over the next few years.
“Circana is forecasting positive performance for the prestige market through 2025. Right now, we’re riding high, but I think what we’re starting to see with fragrance is a gradual softening, kind of indicative of what we’re going to see in the future — it’s still growth, but a softer growth,” Jensen said.