11.15.22
According to the latest findings from NPD, U.S. prestige beauty industry sales revenue reached $6 billion in the third quarter of 2022, a 15% increase versus Q3 last year.
“Unit sales and revenue are both growing by double digits for beauty products sold in the prestige market, indicating that consumers are indulging in beauty products this year,” said Larissa Jensen, beauty industry advisor, The NPD Group. “Fragrance sales will grow this holiday season, albeit slower than in years past, and makeup, skincare, and hair care should also shine during the holidays, maintaining the strong sales performance these categories have experienced so far this year.”
Clinical brands drove the sales gains in the skincare market, followed by natural brands. Brick-and-mortar stores continue to bring in most of the skincare sales gains, but the online channel still accounts for nearly 40% of sales.
Growth drivers in the fragrance market are a combination of continued consumer demand and increased average prices. Average prices for fragrances grew faster than other beauty categories, fueled by consumers opting for higher concentration products and luxury brands that command a higher price point. While the online channel continues to expand, physical stores remain the most important channel for the fragrance category, accounting for over three-quarters of U.S. sales.
Hair is the only category with a nearly even channel split between in-store and online sales. As consumers continue to prioritize hair health, products with strengthening and restoration benefits are outpacing overall hair category growth. Hair product sales continue to grow despite the category becoming less promotional. Over the year-to-date through September 2022 period, the category experienced a 2-point decrease in the share of units sold on promotion.
“Unit sales and revenue are both growing by double digits for beauty products sold in the prestige market, indicating that consumers are indulging in beauty products this year,” said Larissa Jensen, beauty industry advisor, The NPD Group. “Fragrance sales will grow this holiday season, albeit slower than in years past, and makeup, skincare, and hair care should also shine during the holidays, maintaining the strong sales performance these categories have experienced so far this year.”
Beauty Segments
Makeup sales have officially surpassed pre-pandemic 2019 levels, with growth in Q3 unit sales and revenue, versus the same period in 2019. As a testament to the viability of the “Lipstick Index,” lip makeup was the fastest growing makeup segment in Q3, with sales revenue rising by 32%.Clinical brands drove the sales gains in the skincare market, followed by natural brands. Brick-and-mortar stores continue to bring in most of the skincare sales gains, but the online channel still accounts for nearly 40% of sales.
Growth drivers in the fragrance market are a combination of continued consumer demand and increased average prices. Average prices for fragrances grew faster than other beauty categories, fueled by consumers opting for higher concentration products and luxury brands that command a higher price point. While the online channel continues to expand, physical stores remain the most important channel for the fragrance category, accounting for over three-quarters of U.S. sales.
Hair is the only category with a nearly even channel split between in-store and online sales. As consumers continue to prioritize hair health, products with strengthening and restoration benefits are outpacing overall hair category growth. Hair product sales continue to grow despite the category becoming less promotional. Over the year-to-date through September 2022 period, the category experienced a 2-point decrease in the share of units sold on promotion.
