US cosmetic and beauty sales are expected to grow over 10% this year—more than three times the 2.9% rate of the overall retail market, according to our forecast. It’s a sign of the “lipstick effect,” our analyst Sky Canaves said on our “Behind the Numbers: Reimagining Retail” podcast. “When times are tough, shoppers are a little less willing to trade down or give up those indulgences.”
Big on beauty: Cosmetic and beauty sales are set to pass the $100 billion sales milestone in the US in 2025, according to our forecast, showing the category’s popularity even as consumers scale back on spending.
The UK follows suit: “As in the US, we’re seeing [health, personal care, and beauty ecommerce] sales growing fast at 7.6%, and that's versus a 0.6% dip in overall UK ecommerce sales this year,” said our analyst Carina Perkins.
The modern word of mouth: Some 45% of US beauty shoppers have discovered new beauty products through social media, according to Tinuiti, beating out TV at 30% and in-store displays at 25%.
Lessons for retailers: Although a rising cost of living is convincing consumers to simplify their beauty regimes, many are unwilling to give up the expensive products they’ve come to love. Retailers would be wise to take advantage of their customers’ loyalty, especially amid the latest wave of popular D2C beauty brands.
“There [are so many beauty specialists, online specialists offering the same thing, so you really need to sort of work on that loyalty with your customers,” said Perkins.
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