By Larissa Jensen
As the second-largest channel in the U.S. beauty mass retail market, drug stores have long served as convenient and accessible destinations for beauty shoppers. Over the past year, the amount of money spent per buyer has increased in key product segments including hair care, fragrance and cosmetics. While there are bright spots, pointing to the resilience of the beauty category in drug stores, the channel is simultaneously being faced with mounting challenges that are reshaping its role in the beauty retail landscape. These challenges, while real, are not insurmountable and open doors to opportunity.
One example that has largely impacted the drug store beauty experience for many shoppers in large metropolitan areas has been the relatively recent practice of locking up products. Originally a response to growing concerns over theft, this measure has had unintended consequences. Consumers are increasingly discouraged from in-store shopping when faced with locked cases and long wait times for assistance. At the same time, drug store foot traffic has declined due to the growing popularity and convenience of prescription delivery services, cutting down the frequency of visits and therefore reducing the chance for incidental beauty purchases. To remain competitive, drug store retailers must reevaluate the in-store experience. While product security is necessary in high-theft areas, retailers should explore alternative solutions such as monitored open shelving, locked displays with instant customer access or a concierge model that enhances service rather than diminishes it.
Additionally, beauty buyers and beauty-related shopping trips to drug stores have both declined across all demographic groups, indicating a universal issue rather than one confined to a specific consumer segment. Without the draw of necessity-based foot traffic or a seamless product browsing experience, drug stores are at risk of losing their connection with the beauty consumer.
One way to address these issues is to focus on what is working. For example, there are pockets of demographic growth areas. Households with Gen Z members are fueling growth across categories, showing an appetite for accessible beauty brands and self-care routines. Middle-income households — earning between $35,000 and $125,000 annually — and high-income households, above $200,000, are also demonstrating an increase in spending, proving that value and convenience continue to resonate across income brackets. Notably, white consumers were the only ethnic group to increase their spending per trip on beauty products in the drug store channel, showcasing the opportunity to broaden appeal among diverse shopper groups.
Digging deeper into product category winners over the past year, acne care is a case study in success. Drug store dollar sales of acne products grew by 10%, and the number of buyers increased by 1%, driven largely by Gen Z households and brands like Hero Cosmetics, Panoxyl and Starface. These brands have built strong emotional connections with younger shoppers through social media, ingredient-led education and modern packaging — all elements that could serve as a blueprint for revitalizing demand for other beauty segments within drug stores. There is also an element of immediate need associated with acne care in-store purchases, putting drug stores at an advantage for capturing more of these types of urgent purchases, as they do with other over-the-counter products like cold and cough medicines.
Additionally, leading brands continue to shine within their respective categories within the drug store channel. In cosmetics, e.l.f. Cosmetics remains a top performer with its affordable trend-driven offerings. La Roche Posay brings dermatologist-backed credibility to skin care, while Native and Method continue to lead in the personal cleansing space, with clean ingredients and eco-conscious positioning. In grooming, the Philips brand saw remarkable double-digit growth in drug store dollar sales, and Harry’s shaving products also grew over the past year. Within the fragrance category, private label brands posted double-digit growth, proving that innovation at all price points can find an audience.
Perhaps the most obvious opportunity drug stores should tap into is the wellness connection. As a destination for health and personal care needs, drug stores are inherently intertwined with the well-being industry. Higher-income consumers are especially relevant here. They are spending more at drug stores, but these are also the same consumers more likely to purchase prestige beauty products. This is notable in that the prestige beauty buyer is more engaged in wellness categories, increasing their spending at a greater rate on health-focused products like supplements and vitamins.
Engaging core growth demographics, particularly Gen Z and multi-income households, requires tailoring assortments, messaging and merchandising to meet their expectations. The higher-income consumer, specifically, is also purchasing prestige beauty at a greater rate, so it is important to meet the potentially higher expectations of this shopper.
Finally, considering less foot traffic, drug stores must continue to invest in omnichannel strategies that connect online convenience with in-store immediacy. Click-and-collect options, loyalty programs tied to beauty purchases and targeted digital promotions can help recapture trip frequency and spending momentum.
Larissa Jensen is senior vice president and global beauty advisor at Circana.
