The US prestige channel, which includes department and specialty stores, recorded the third year of double-digit growth, growing 14% to $31.7 billion in sales, according to the data firm Circana. Mass market beauty sales saw a modest gain of 6%, with makeup and skincare being the only categories showing growth based on units sold.

“Prestige beauty has been on a double-digit growth trajectory over the last few years,” said Larissa Jensen, Vice President of Beauty and Industry Advisor at Circana. “For the most part, across every category, prestige units have grown. That’s more compelling than dollar sales because it speaks to demand. The growth we’re seeing on the mass side is primarily driven by higher prices.”

The masstige brands built to straddle channels with mass pricing and prestige positioning are driving beauty category growth, seeing growth of 16%, where prestige brands are growing at 12% and mass brands are growing at 9%, according to Circana.

The “mass-stige” brands, which Jensen defined as those with mass prices and prestige positioning and distribution, are also driving growth. “When you look at the performance of those brands, they grew 16%,” she said. “Prestige brands are growing 12%, and mass brands are growing 9%.”

Prestige VS Mass

• Prestige sales grew 14%, while mass market sales saw a 6% gain. 
• Makeup prestige sales grew 15%, while mass sales were only up 6%.  
• Fragrance prestige grew 12%, while mass saw only a 4% increase.
• Skincare increased 14% in prestige and 11% in mass.
• Hair prestige increased 14% in prestige and 6% in mass. 
• Mass consumers demonstrated more channel loyalty, while 94% of prestige beauty brand buyers are also shopping in the mass channel, pivoting between premium and value. 

Jensen said that data shows, “Consumers overall are trading up in segments where the average prices are close between mass and prestige. But if you look at growth in something like facial moisturizers, they’re almost the same between mass and prestige. Consumers remain loyal in those sub-segments where you see big price disparities.”

Prestige Category Breakdown

Makeup 

• Lip makeup products such as tinted lip oils and balms saw a 31% increase.

Skincare 

• Skincare, face serums, face creams, body sprays, body lotions, body creams, and body cleansers were among the top performers in the category.

Fragrance 

• Higher fragrance concentrations, which are higher in price, like eau de parfums (EDP) and parfums, gained three share points in 2023. 
• Conversely, lower-priced products, including mini/travel sizes and body sprays, also gained traction. 
• Unit sales for mini women’s fragrances grew 5x the rate of other sizes. 
• The size of the body spray market has nearly tripled since 2022. 
• Gift sets was the fastest-growing segment of the fragrance market in 2023.

Haircare

• Hair styling was the fastest-growing category driven by innovation and launch volume, which doubled YoY, resulting in an increase of 24% in sales. 
• Scalp care remains a key driver in hair.
•  Hair was the only beauty category to capture more of its sales online, with e-commerce accounting for 52% of the volume.

“The beauty industry is strong and the outlook remains positive for both the mass and prestige sides of the business in 2024,” Jensen said. “This performance is remarkable given the phenomenal growth it has experienced for the past two years, but the industry should not rest on its laurels. Consumers continue to cope with economic pressures, and being in tune with their shifting mindset is a must. Flexibility, creative thinking, and effectively harnessing high consumer engagement are all part of the winning formula to drive continued growth.”

She continued, "We are optimistic about prestige beauty, but I think there’s going to be a significant slowdown, especially when you consider the growth rates of the past few years. 2024 will likely be the year we see that pullback.”