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CHICAGO – Heading into the holiday season, the U.S. prestige beauty market grew by 7% to $22.8 billion, while mass market sales experienced a 2% increase in sales, versus the same period last year, according to Circana, a leading advisor on the complexity of consumer behavior.
Makeup, the largest category within the prestige segment, grew by 5% in both dollars and units sold. The lip segment, in particular, continued to outperform, with a remarkable 21% increase in dollars and a 23% increase in units sold. This growth can be attributed to the rising popularity of tinted lip balms and oils. The industry is responding to this consumer demand by launching more of these products, resulting in a doubling of dollar sales tied to launches this year through September, compared to 2023. Blush is proving to be another consumer favorite this year, with sales up double-digits.
According to Circana’s Complete Beauty data, mid-range or masstige skincare brands are outpacing prestige skincare brands – growing six times faster. We see how this narrative is unfolding when we explore prestige market trends for this category. Skincare was the softest growing category across U.S. department and beauty specialty stores through the third quarter, with dollar sales up 3%. This performance was driven by a decrease in average pricing, as units sold grew faster – indicating that consumers are increasingly favoring lower-priced skincare product in prestige outlets.
The prestige hair category continues to shine, with dollar sales up 8% through September and units also growing. Hair wellness products, such as heat protectants and scalp care, experienced notable growth and outpaced the overall category. Hair styling was the fastest-growing segment, and also the largest contributor to the category’s sales gains. Compared to all beauty categories, the weight of the e-commerce channel is heaviest within the hair market, with over half of department store and specialty sales stemming from online. Furthermore, with the majority of hair set sales stemming from e-commerce, we can expect online to be a particularly lucrative destination for holiday gift shopping.
Last but certainly not least, prestige fragrance is the fastest-growing category thus far in 2024, as year-over-year sales soared by 14% in dollars and 12% in units through September. Higher fragrance concentrations played a crucial role in driving growth. Luxury brands experienced a 15% increase in sales, slightly faster than the overall market. In women's fragrance, smaller sizes under 1 oz. grew at four-times the rate compared to other sizes, based on units sold. Looking ahead, the holiday season is expected to be especially important for the fragrance market, both in prestige and mass retail channels. Traditionally, the fourth quarter accounts for over 40% of annual sales in both channels. Early indicators in the third quarter align with forecasts for positive performance.
Holiday season expectations
Overall U.S. consumer sentiment as it relates to the holiday shopping season is improved compared to the past two years, according to Circana’s 2024 Holiday Purchase Intentions Report. Holiday shoppers plan to spend an average of 2% more than last year, as Black Friday hits a four-year high in expectation of the best holiday deals.
As it pertains to beauty, 29% of shoppers plan to purchase beauty products as gifts this year – up slightly compared to 2023. Notably, the study also revealed that 41% of households with children intend to buy beauty – which is 11 percentage points higher than overall intentions.
“Prestige beauty epitomizes the indulgence in little luxuries and acts as an indicator of the consumer mindset for the beauty industry overall,” said Larissa Jensen, global beauty industry advisor at Circana. “This holiday season, its resiliency will be tested. There has been some pullback in spending throughout 2024, but big increases in prestige beauty spend from higher-income households with children under 18-years-old indicate parents are indulging Gen Alpha with these products. The social media virality of this new generation of beauty enthusiasts shows no sign of slowing and could be a pivotal holiday growth driver.”
