Anna Mayo, VP Beauty Vertical, NIQ06.20.23
Q1 of 2023 demonstrated remarkable strength in the beauty and personal care market, defying the challenges of ongoing inflation. Despite rising prices, consumers maintained their enthusiasm for indulging in beauty products. The quarter witnessed a substantial surge in total sales, reaching an impressive $22.5 billion, marking a 13% increase compared to the previous year. Notably, this growth rate stands as the highest recorded in the past four quarters.
There are positive signs of recovery in unit sales, showing a rebound from the sluggishness observed in 2022. Remarkably, beauty unit sales remained on an upward trajectory during Q1, despite persistent price hikes. This could signify that consumers are displaying promising indications of embracing higher prices and may have concluded their reduction in beauty purchases.
In the categories of fragrance and hair care, online sales growth surpasses that of in-store sales. Conversely, in cosmetics and skincare, in-store sales exhibit a faster rate of growth. This highlights the nuanced purchasing behavior of today's shoppers who seamlessly transition between in-store and online shopping based on factors such as immediate needs, stock replenishment, or the allure of an irresistible online offer.
The beauty market is witnessing a dynamic shift in consumer preferences, with a growing emphasis on online channels. However, the specific growth patterns vary depending on the beauty category, emphasizing the importance of understanding and catering to the evolving needs of customers in both online and in-store environments.
Cosmetics and nails also had a standout quarter, with a notable 19% growth in dollar sales, as consumers sought affordable ways to uplift their spirits. Among cosmetics, lip cosmetics exhibited significant growth at 25%, closely followed by face cosmetics at 30%.
An unexpected champion in the beauty market is the deodorant category, maintaining its surprising dominance with an 18% growth in dollar sales. This growth can be attributed to the trend of premiumization and the rising popularity of natural deodorants, which have also contributed to higher pricing within this category.
Q1 performance showcases the enduring appeal of beauty products that bring joy and self-care to consumers. Fragrance, cosmetics, nails, and deodorant are all witnessing substantial growth, driven by evolving consumer preferences and emerging trends within the beauty industry.
With shoppers making fewer trips, it becomes crucial for brands and retailers to maximize their efforts to convert these shoppers when they do visit. The limited attention span of consumers necessitates a heightened focus on creating engaging experiences that captivate their interest and drive conversions.
About the Author
Anna Mayo is VP Beauty Vertical, NIQ, and a frequent contributor to Beauty Packaging. Read Anna’s recent Expert’s Opinion: “4 Key Ways Innovation is Changing the Beauty Industry.”
There are positive signs of recovery in unit sales, showing a rebound from the sluggishness observed in 2022. Remarkably, beauty unit sales remained on an upward trajectory during Q1, despite persistent price hikes. This could signify that consumers are displaying promising indications of embracing higher prices and may have concluded their reduction in beauty purchases.
Breaking Down the Channels
Online sales continue to dominate over in-store sales, constituting approximately 40% of total beauty sales. The growth rates between online and in-store sales exhibit a significant disparity, with online sales outperforming with a growth rate of 16% compared to the 5% growth rate for in-store sales. However, it is important to note that the growth rates differ across various beauty categories.In the categories of fragrance and hair care, online sales growth surpasses that of in-store sales. Conversely, in cosmetics and skincare, in-store sales exhibit a faster rate of growth. This highlights the nuanced purchasing behavior of today's shoppers who seamlessly transition between in-store and online shopping based on factors such as immediate needs, stock replenishment, or the allure of an irresistible online offer.
The beauty market is witnessing a dynamic shift in consumer preferences, with a growing emphasis on online channels. However, the specific growth patterns vary depending on the beauty category, emphasizing the importance of understanding and catering to the evolving needs of customers in both online and in-store environments.
Category Performance
The performance of the core beauty categories in Q1 was exceptional, reflecting the willingness of shoppers to indulge in products that enhance their well-being. Leading the way is the fragrance category, which achieved an impressive 27% growth in dollar sales. Notably, this growth was predominantly driven by online sales. Within fragrance, body spray witnessed a remarkable surge of 32%, while cologne and perfume experienced a solid growth rate of 25%.Cosmetics and nails also had a standout quarter, with a notable 19% growth in dollar sales, as consumers sought affordable ways to uplift their spirits. Among cosmetics, lip cosmetics exhibited significant growth at 25%, closely followed by face cosmetics at 30%.
An unexpected champion in the beauty market is the deodorant category, maintaining its surprising dominance with an 18% growth in dollar sales. This growth can be attributed to the trend of premiumization and the rising popularity of natural deodorants, which have also contributed to higher pricing within this category.
Q1 performance showcases the enduring appeal of beauty products that bring joy and self-care to consumers. Fragrance, cosmetics, nails, and deodorant are all witnessing substantial growth, driven by evolving consumer preferences and emerging trends within the beauty industry.
Changes in Consumption
Beauty and Personal Care remains a widely embraced department, appealing to a vast majority of households across the United States. However, there are notable changes occurring in consumer purchasing dynamics. While consumers are reducing the frequency of their shopping trips, they are compensating by increasing their spending during each visit. This shift in behavior contributes to the overall growth of the department's sales.With shoppers making fewer trips, it becomes crucial for brands and retailers to maximize their efforts to convert these shoppers when they do visit. The limited attention span of consumers necessitates a heightened focus on creating engaging experiences that captivate their interest and drive conversions.
The Takeaway
As we transition into the summer months, it is essential to closely monitor beauty and personal care trends. However, all indications point towards a robust summer season for this department. The positive signals suggest a continued demand and engagement from consumers, providing opportunities for brands and retailers to capitalize on the enthusiasm surrounding beauty and personal care during this time.About the Author
Anna Mayo is VP Beauty Vertical, NIQ, and a frequent contributor to Beauty Packaging. Read Anna’s recent Expert’s Opinion: “4 Key Ways Innovation is Changing the Beauty Industry.”