Beauty product sales soar as six-figure earners continue to spend – World Water Day

Inflation is no match for prestige beauty.

According to data from the NPD Group, sales of prestige beauty products in the US increased 16% to $6 billion in the second quarter, driven by double-digit growth in all categories.

Despite macroeconomic pressures, the beauty consumer is more engaged than ever, said Larissa Jensen, vice president of beauty at NPD Group. “The highest-income consumer is growing, we know from census data that the $100,000+ per year income cohort has been growing in size over time,” she said. “The majority of our buyer base, about 47 percent of prestige beauty buyers, earn more than $100,000 per year.”

That consumer, Jensen continued, “is more engaged and more able to indulge because of inflation pressure and recession fears. They’re not feeling those pressures as much as low-income consumers right now. Having to pay more for your purchases hurts everyone, but it really hurts the low-income consumer the most.”

To that end, the usage rates for makeup, skin care, fragrance, and hair care are 67%, 76%, 78%, and 96%, respectively.

Makeup accounted for a third of sales, crossing the $2 billion mark for the quarter, up 18 percent from the same period last year. Although dollar sales remain lower than before the pandemic, unit sales exceeded the second quarter of 2019 by 1 percent. Lipstick revenue was up 28 percent year over year.

“Makeup is going full steam ahead,” Jensen said. “There’s the creative and colorful side of the category, and then there’s the one that just enhances your look… When you look at both sides of the makeup coin, they’re both very successful.”

The fragrance remains on an upward trajectory and grew 13 percent from last year. Prices rose 6 percent, twice the rate for general beauty, a reflection of both inflation and consumer propensities toward luxury products.

Jensen acknowledged that the category has slowed slightly since 2021, but is still “growing very strongly,” especially given seasonal spending on Mother’s Day and Father’s Day gift sets. “Home scents are also doing very, very well. There’s a little bit of those habits that we form during the pandemic,” she said.

On the skin front, body care products grew faster than facial skin care, especially those with sought-after ingredients like vitamin C, retinol, and algae. The shoulders of the sun protection season have broadened and it is now growing throughout the year. For the second quarter, it shot up 52 percent.

“Skin care has been growing for so long, so strongly, that we assume that yes, it is still that strong, but it is not,” he said. “These are things that have higher usage rates, and it’s still a lot of what we saw before, like clinic [skin care],” she said. “The body and the sun are driving the skin in general.”

Hair care is the smallest but fastest growing beauty category, up 24 percent to $781 million. During the first half of 2022, “clean” hair brands accounted for nearly 25 percent of hair care product sales, a 5-point share gain from the second quarter of 2021.

“It’s kind of a makeup-like case. When you look at the biggest categories in hair, they’re all growing,” Jensen said, hypothesizing that consumers who migrated to the specialty channel and away from salons during the pandemic are helping to boost sales volumes.

Source: wwd.com