By Jacqueline Flam
The beauty and health marketplace is entering a new era defined by friction. Economic friction, access friction, trust friction and emotional friction are influencing how consumers navigate self-care, how retailers compete and how brands must innovate to stay relevant. NIQ’s latest data reveals a consumer who is both empowered and constrained, optimistic yet anxious, digitally fluent yet overwhelmed by choice. Understanding this tension and designing retail experiences that reduce it will determine who succeeds in the next decade of self-care.
Financial Pressure and a Growing Income Divide
The U.S. consumer is under meaningful pressure. NIQ finds that more Americans feel worse off financially than they did a year ago, with 34% reporting they are a little or a lot worse off financially. At the same time, the income divide is widening. Higher-income households are driving a disproportionate share of growth across the store. Households earning $150,000 or more now account for 26% of total store spend, up from 20% in 2022. Meanwhile, households earning under $25,000 have seen their share fall from 14% to 12%.
This polarization is especially visible in beauty and health. NIQ’s e-receipt data shows a 79% year-over-year spending gap between high-income and low-income households in categories such as medical equipment, sports nutrition and vitamins. The result is a marketplace where premium self-care accelerates, value-based self-care becomes essential, and the middle loses relevance. Retailers must now serve two very different consumers at the same time. One is trading up. One is trading down. Both expect experiences that feel seamless and intuitive.
The Cost of Wellness as a Barrier
Consumers want to live healthier lives, but the obstacles are mounting. NIQ finds that 55% of U.S. consumers say the cost of healthier options is their top barrier, and 64% say rising insurance costs are causing financial stress. Forty percent of Americans often go without medical care because it costs too much. In this environment, self-care becomes both a necessity and a luxury. Consumers are trying to prevent health issues to avoid costly medical interventions, yet they struggle to afford the very products that support prevention.
This paradox is becoming the defining challenge for beauty and health retail. The cost of friction is no longer an abstract concept; it is a daily reality that influences what consumers buy, where they shop and how they prioritize their well-being.
Omnichannel as the New Consumer Default
The omni revolution has fully arrived. In 2025, 94% of CPG buyers purchased both online and in-store, and online penetration grew nearly six percentage points year over year. Consumers now move fluidly across in-store retail, e-commerce, marketplaces, social commerce, direct-to-consumer platforms, B2B channels and last-mile fulfillment.
This fluidity is accelerating category disruption. While most self-care categories remain majority in-store, online share is rising quickly, especially in vitamins, medical accessories and first aid. Retailers can no longer think in terms of channels. They must think in terms of ecosystems that allow consumers to move effortlessly between discovery, evaluation and purchase.
Platform Power and the New Rules of Engagement
Amazon and TikTok are redefining how consumers discover and buy self-care products. Amazon is now the largest self-care retailer in the United States, surpassing grocery, mass and drug. Its growth is fueled by unbranded search, with 90% of CPG searches on Amazon unbranded, and by third-party sellers, which now represent 64% of Amazon’s sales. Subscribe & Save accounts for 15% of personal care sales.
This is not only a shift in where consumers buy, but a shift in how they decide. When nearly all searches are unbranded, brand equity must be earned at the point of search rather than at the point of shelf.
TikTok Shop is accelerating this shift. Categories such as vitamins, cosmetics and skin care are seeing triple-digit growth, with TikTok Shop sales in some segments up more than 800% year over year. Impulse, entertainment and education now blend seamlessly into purchase behavior. The algorithm has become the new end-cap.
Wellness Without Boundaries
Wellness is no longer a department. It is a lifestyle that crosses every aisle and every channel. Retailers across the industry are expanding into adjacent spaces. Costco is selling GLP-1 medications at deep discounts. Walmart is becoming a health care gateway. Amazon Pharmacy is installing in-office kiosks. Ulta and Sephora are expanding into supplements, devices and feminine care.
This convergence is also happening on the shelf. NIQ’s analysis shows strong growth in claims-based need states such as digestive health, immune support, sleep and mood. Digestive health alone is growing 9% in dollar sales. Food and supplements are merging as well. Collagen brownies, protein popcorn, kombucha for gut health, and other hybrid products are blurring the line between nutrition and beauty. The future of self-care will not be defined by aisles; it will be defined by need states that reflect how consumers think about their bodies, their routines and their aspirations.
The Retail Mandate for the Next Decade
The retailers that succeed in this environment will be those that eliminate friction and meet consumers where they are financially, emotionally and digitally. Trust must be rebuilt through transparency and efficacy. Consumers are skeptical, and 25% say they do not trust that health products will work. Retailers must curate assortments that emphasize science, results and credibility.
They must also design for the omni reality by ensuring consistent pricing, unified product information, seamless fulfillment and integrated loyalty. Amazon and TikTok should not be viewed as threats. They are ecosystems that shape consumer expectations. Retailers must understand how their categories behave on these platforms and build strategies that complement rather than compete.
Retailers must also expand into wellness adjacencies such as diagnostics, supplements, functional foods, devices and preventive care. Finally, they must serve both sides of the income divide. High-income shoppers are driving growth, but lower-income households still represent significant volume. Retailers must balance premium innovation with accessible value.
A Marketplace Defined by Choice and Constraint
The beauty and health landscape is being influenced by forces far bigger than any single category. Economic pressure, omnichannel acceleration, platform dominance, and the redefinition of wellness are all converging at once. The retailers that thrive will be those that understand the cost of friction and remove it.
Consumers are signaling that self-care is non negotiable. The question is whether the industry can meet them with the access, affordability and trust they now demand. As the boundaries between beauty, health, food and wellness continue to collapse, the winners will be those who see the opportunity not as category expansion, but as a consumer expectation.
Jacqueline Flam is managing director of beauty and health at NielsenIQ.
