Economic uncertainties are no match for prestige beauty, new data shows.
According to a year-end report from the NPD Group, every category in prestige beauty posted double-digit gains, with makeup, skin care, fragrance and hair growing 18 percent, 12 percent, 11 percent and 22 percent, respectively. The industry overall grew 15 percent.
That ballooning of sales shows no signs of abatement, according to Larissa Jensen, vice president of beauty at the NPD Group. “It’s still up double digits year-to-date so far,” she said. “That swell is continuing in 2023, which is what we anticipated.”
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Across the consumable sectors NPD tracks, prestige beauty was the only one to gain double-digit sales in units. “It goes back to the lipstick index and the ‘treat’ mindset,” Jensen said. “Consumer confidence went down and sales went up. But even when consumer confidence crept back up, we still got good sales.”
Jensen attributed that to the prestige beauty shopper’s median income, with roughly half of shoppers earning more than $100,000 annually. “That consumer is less likely to be impacted by the things that are happening around us in terms of inflationary prices,” she said, adding that beauty prices in prestige are relatively flat, even in an inflationary environment.
Makeup unit sales are past pre-pandemic volumes, though dollar sales are slightly short. Jensen attributed the phenomenon to product mix — lip was the fastest growing segment and has lower median prices than complexion — and smaller price increases. Lip gloss also outranked lipsticks, but lip sales overall passed pre-pandemic levels in both dollar and unit sales.
In fragrance, higher concentrations and luxury artisanal juices drove the growth.
Shoppers also seem to be trading up in hair, still among the market’s fastest-growing segments due to mask and treatment sales, though it declined in the mass market.
In skin care, body products shot up at triple the rate of facial skin care. “That consumer discovered body products in the pandemic, but this behavior really stuck,” she said.
Body care is the exception, not the rule. Brick-and-mortar sales are still capturing market share from e-commerce. “Body care is one of the few [behaviors] that’s stuck around. What’s happened more is a shift back to pre-pandemic behaviors,” Jensen said.