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New data shows the U.S. beauty industry’s growth may be slowing a bit, but consumers remain just as engaged.
According to Circana data from January to September, growth in prestige cosmetics is still outpacing the mass market. The markets grew by 7 percent and 2 percent, respectively.
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The fragrance was the bright spot across the board: It increased its prestige by 14 percent and recorded a 2 percent increase in mass.
“After several years of fragrance being about luxury, this year the more affordable side of prestige fragrances entered the market. We saw it start in 2023, but it became a strong driver in 2024,” said Larissa Jensen, senior vice president of beauty and industry consultant at Circana. “Now it’s about products that have a lower price point, be it a mini product or a body spray, but we see both sides of the coin growing.”
Prestige hair grew 9 percent, while mass channels grew 2 percent. According to Jensen, the gains there can be attributed to existing trends. “If you think about scalp care and hair loss, all of that contributes to overall hair growth,” Jensen said. “Prestige styling products and treatments continue to do very well.”
Skin care grew 3 percent in the prestige market and 2 percent in the mass market. There, consumers meet in the middle of the entire beauty market, with higher-priced mass-produced items and cheaper prestige products capturing the largest market share.
“If you look at the performance of mass and prestige, it’s pretty close. With everything else, there is a greater mismatch between mass and prestige,” Jensen said. “I talked about democratizing this category because skin care is all about effectiveness and consumers have learned that they don’t have to pay a lot to get results. It’s a category that consumers move back and forth between.”
Makeup was the only category whose mass fell by 3 percent. Makeup in the prestige market, however, grew by 5 percent. Lip cosmetics were the most promising segment in this category, both in terms of mass and prestige. In the mass business alone, Lip grew 8 percent and represents a $1.4 billion business.
“Lip products are among the most impulsive purchases for consumers – measured by what they buy and what they actually buy,” Jensen said. “You can also use multiple shades, different types and different formats. It’s the only bright spot in makeup for mass and prestige.”
Brick-and-mortar remains the primary sales channel in both areas, although Jensen noted that e-commerce is growing faster than physical retail on the mass side of the business.
“In terms of prestige, brick-and-mortar will continue to hold that side of the market and perform better than e-commerce. But the big difference is that you can try a prestige product in the store, and not in bulk, but just to try it out,” Jensen said. “There are so many too [stock keeping units] that can be worn within a specific showroom [in mass].”
The outlook for the holidays is optimistic: Circana reports that 29 percent of consumers expect to purchase beauty products as gifts, an improvement over 2023. For households with children, that number is even higher: 41 percent say they will give away beauty products.
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