Inflation is no match for prestige beauty.
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Despite macroeconomic pressures, the beauty consumer is more engaged than ever, said Larissa Jensen, vice president, beauty, the NPD Group. “The higher-income consumer is growing, we know from census information that the cohort of incomes over $100,000 per year has been growing in size over time,” she said. “The majority of our shopper base, about 47 percent of shoppers for prestige beauty, make over $100,000 per year.”
That consumer, Jensen continued, “is more engaged, and better able to indulge because of inflationary pressure and recession fears. They’re not feeling those pressures as much as the lower-income consumers right now. Having to pay more for your groceries hurts everybody, but it really hurts the lower-income consumer more.”
To that end, usage rates for makeup, skin care, fragrance and hair care are 67 percent, 76 percent, 78 percent and 96 percent, respectively.
Makeup made up one third of sales, crossing the $2 billion mark for the quarter, up 18 percent from the same period last year. Although dollar sales are still lower than before the pandemic, unit sales beat 2019’s second quarter by 1 percent. Lipstick revenues increased 28 percent year-over-year.
“Makeup is firing on all cylinders,” Jensen said. “There’s the creative, colorful side of the category, and then the one that just enhances how you look.…When you look at both sides of the makeup coin, both are very successful.”
Fragrance is still on an upward trajectory, and grew 13 percent over last year. Prices increased 6 percent — double the rate of overall 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 gift sets for Mother’s Day and Father’s Day. “Home scents are also doing very, very well. There’s a bit of those habits we formed 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 sun care season’s shoulders have broadened, and it’s now growing year-round. For the second quarter, it shot up 52 percent.
“Skin care has been growing so long, so strongly, that we make the assumption that yes, it’s still going that strong, but it’s not,” she said. “These are things that have higher usage rates, and it’s still a lot of what we saw before, like clinical [skin care],” she said. “Body and sun are driving overall skin.”
Hair care is beauty’s smallest yet fastest-growing category, soaring 24 percent to $781 million. For the first half of 2022, “clean” hair brands made up almost 25 percent of hair care sales, a 5-point share gain from 2021’s second quarter.
“It’s kind of a similar case to makeup. When you look at the bigger categories in hair, they’re all growing,” Jensen said, hypothesizing that consumers who migrated to the specialty channel and away from salons in the pandemic are helping boost sales volumes.