Centrum 7/6  banner

Beauty consumers seek richer in-store experience

Print Friendly, PDF & Email

Dave Wendland

According to a study released earlier this year by Kline and Co., “Cosmetics and Toiletries USA,” the U.S. beauty and personal care market surpassed $85 billion in retail sales in 2021, a rise of $7 billion from 2019 sales levels. This marks the sector’s strongest performance within the last 10 years, with no signs of slowing down, given the 6% CAGR (compound annual growth rate) forecasted for the market through 2026.

As consumers have returned to brick-and-mortar, retailers across all channels have put more focus on improving their assortments, increasing online interactions and enhancing the overall consumer experience across all platforms. It’s becoming evident that cosmetics, fragrances and general beauty are back on the radar screen for consumers and for retailers.

I personally believe the beauty category, as a whole, has expanded to include items that are used on, in, and around the body to enhance one’s appearance, and/or improve emotional and physical well-being. Making this category broader than retailers may be defining it.

Despite estimates that as much as half of the market growth is coming from online sales, according to GLG’s 2022 outlook, traditional retailers cannot be complacent. Digital options certainly offer convenience for shoppers; however, across the beauty category in particular consumers continue to support in-store experiences where they can see products before they buy — and be more inspired by the engaging environment. Store layout and displays need to allow for this. Shoppers faced with myriad products may feel frustrated and leave empty handed without a dose of ambience and inspiration. Clever use of displays can help retailers draw attention toward key items, while at the same time inviting shoppers to “experience” the brand.

Holly Jablonowski, project manager at HRG, commented, “We’ve been assisting the coordination of fixture implementation and space allocation within the beauty and cosmetics category over the past decade. I’ve seen four key factors that brands and retailers alike are focusing on: (1) speed and ease of implementation to overcome workforce challenges; (2) enhanced fixtures to support more flexible merchandising; (3) sustainability — looking beyond the product itself to waste reduction in fixtures and displays; and (4) differentiation to stand out from the crowd.”

While cosmetics and personal care have seen growth online, brands and retailers are also increasing investments around in-store experiences, both permanent and temporary, to connect with new shoppers, says BeautyMatter.

According to Corey Paske, HRG business development manager for beauty, pet and hardware, “It is imperative for brands to seamlessly integrate omnichannel marketing and shopping experiences to create a positive consumer interaction whenever and wherever consumers elect to shop.”

It’s no secret that we’ve seen the beauty category expand beyond its typical bounds controlled by brick-and-mortar specialty retailers such as Sephora and Ulta Beauty. Mass retailers like Target and Walmart are tapping further into beauty via store remodels and partnerships with premium beauty retailers, Space NK (Walmart), Ulta Beauty (Target), and Sephora (Kohl’s). Others have also been expanding their footprint within beauty, including drug stores, grocers and dollar stores.

Market drivers

Although several of the following market drivers are well underway, others are in their infancy. The future of beauty at retail is being reshaped, reconfigured and reimagined at this very moment.


Consumer interest in products that support health and hygiene have created a huge innovation opportunity for beauty brands. Additionally, clean ingredients, natural formulations and other innovative trends have become increasingly important to consumers.

Brands can gain an edge by including ingredients with properties that promote overall health and well-being.

‘Phygital’ world

Consumers are more often shopping across channels, according to Mintel.

Moving forward, seamless shopping experiences that bridge the digital and physical worlds must be prioritized, as well as streamlined strategies that guide beauty shoppers throughout their journey.

Sustainability and transparency

Consumers are demanding transparency of ingredients, testing practices, social responsibility and purpose, according to L Makeup Institute. Furthermore, consumers are increasingly taking notice of retailers actively supporting green initiatives.

Brands that offer clear labeling, recycled packaging and substitution for controversial ingredients, as well as an assurance that the products they are promoting align with shopper ethics and preferences, will have an advantage.

Growth segments

Three areas brands should consider addressing are:

  • Catering to the over-age 40 segment.
  • Recognizing beauty-from-within and supplement support as an opportunity.
  • Capitalizing on the growth of personal care, grooming and beauty needs of men and multicultural market segments.

Identifying underserved consumer groups and focusing product innovation and messaging to capture otherwise untapped market share will help brands get ahead.

Service offerings

Retailers are increasingly looking for new ways to increase store traffic, convert occasional shoppers to loyal customers and differentiate themselves in a sea of sameness. Services such as manicures, ear piercings, skin health assessments and other beauty counseling are among the services emerging across the brick-and-mortar segment, including CVS Health and Target offering ear piercing and Ulta Beauty providing technology-assisted skin assessments.

This is the time to consider how brands and services connect at retail. Such a union could open up tremendous opportunity for improved consumer value.

Leading up to the pandemic, the beauty market experienced conservative growth. From 2019 to 2020 sales rose as consumers stockpiled certain items and prioritized their health and hygiene, according to Mintel.

Core beauty categories such as color cosmetics and lipstick were hit hard during the pandemic, according to The Guardian, as consumers reduced nonessential spending and had fewer in-person interactions. More frequently used categories such as hand sanitizers, body lotions, hair care and skin care increased in demand, according to HRG analysis.

As consumers resume pre-pandemic lifestyles, categories such as cosmetics are making a comeback. However, it is anticipated that beauty care in general will continue its evolution and reflect more personalized routines with a heightened focus on wellness. Retailers and suppliers alike must adjust to cash in on the demands of tomorrow’s consumer — and there are retailers of all shapes and sizes vying for their attention.

Dave Wendland is vice president of strategic relations at HRG and member of the company’s owners group. He participates in strategic planning, business development, product innovation and marketing communications activities for the company.


Comments are closed.