By Jennifer FamianoDirector, Industry Analyst, Beauty, The NPD Group
I have been working in the beauty industry for more than 20 years, and one thing has always been a constant: beauty is a fickle industry. The market runs on innovation, but there comes a time when the innovation dries up.
A few years ago, this happened to the makeup category. The incredible success of reality TV queens (thinking about the Kardashians here), spawned new products like highlighters and contouring, and fresh techniques that consumers needed additional products to duplicate. But soon that trend slowed and ultimately dried up, leaving room for the skincare category to take the reins — and with “clean beauty” leading the charge.
Fast forward to today: in the first quarter (Q1) of 2022, sales revenue in the U.S. skincare category grew at half the rate of makeup, signifying a changing of the guard. Makeup has now returned to the spotlight and, since it is in-demand with consumers, promotions on makeup products fell year over year in the first quarter of 2022. While the number of promoted makeup products remained steady, the average promoted discount declined. Even more impressive is that sales of non-promoted products are increasing. That tells us consumer demand for makeup is high, so retailers do not need to incentivize purchases.
On the other hand, the skincare category is experiencing growing pains. Lower-priced, ingredient-first brands have changed the consumer and the business. The consumers’ excitement about multi-step self-care routines has shifted. TikTok makeup trends are now in favor, including under-blushing and lip contouring. Facial products are leading skincare category sales, and the percentage of units sold on promotion increased in Q1, which is in line with 2019, the year COVID-19 essentially closed retail. Among the core skincare segments, sun-care is the only one that has experienced a decline in the number of promoted units sold, and it is one of the strongest sales performers so far this year.
Promotions are a necessity in the business. But what we are learning is that the depth of the discount and the percentage of units sold on promotion can act as a future indicator of health across the beauty industry.
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For more information or to speak with a beauty industry expert, contact me at marissa.guyduy@npd.com
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