While inflation has cash-strapped consumers holding back on spending in certain categories, the beauty industry remains resilient, with affluent shoppers led by Gen X and millennials boosting sales.
"During this critical time when retail recovery is forced to coexist with mounting economic pressures, it is imperative for beauty brands and retailers to understand which consumers are most engaged and willing to spend," Larissa Jensen, beauty industry advisor at NPD, said in a statement. "These behaviors can vary by beauty category but getting it right and acting on it can provide the competitive advantage necessary to succeed."
- Higher-income consumers in the US with annual household incomes of over $100,000 spent nearly $9 billion on beauty products in the first half of 2022.
- The spending marks an increase of 14%, year over year.
- This double-digit growth was spurred by a combination of more buyers in the market and consumers spending more compared to last year, with Generation X and millennials leading the charge.
- According to NPD Checkout Omnichannel Tracking, higher-income US households account for over 40% of beauty sales revenue.
- Elevated spending from higher-income beauty consumers is tied to their above-average engagement with the sector's two largest categories—makeup and skincare. While 74% of women use facial skincare products and 67% use makeup, those in higher-income households significantly over-index in each category, with usage over 80%.
- While facial skincare product usage from other generations declined, Generation X is the only cohort whose usage remained steady compared to last year. They use nearly as many products as millennials—who use the most—and they are also more likely than any other generation to purchase products that carry higher price tags.
- In the makeup market, women in higher-income households showed the most significant usage increase, rising by 8 points since last year.