Despite economic uncertainties, sales in the US prestige beauty sector witnessed sales revenue growth of 15% year over year, reaching $27.1 billion in 2022. Prestige beauty was the fastest-growing industry segment, across more than $4 trillion in US general merchandise consumer spending tracked by NPD and IRI. Beauty was also the only industry across discretionary retail and consumer packaged goods (CPG) categories to experience unit sales growth in 2022.
"In more ways than one, the prestige beauty industry had an epic year," said Larissa Jensen, beauty industry advisor at NPD. "Regardless of whether consumer confidence was up or down, growth in the prestige beauty market remained strong. The factors supporting this phenomenon—including increased spending from higher income consumers, the redefinition of wellness emphasizing mental health, and an increase in socialization—will continue to fuel positive performance this year."
All prestige beauty categories grew by double digits year over year:
Beauty products experienced consistent revenue growth across both the mass and prestige markets, up 11% when combined; however, only prestige unit demand remained strong. The prestige beauty market also experienced a greater shift back to stores in 2022, with year-over-year brick-and-mortar retail share growing, while online sales share increased in the mass market.
"Looking at the industry holistically, inclusive of the prestige and mass markets, the future outlook for overall beauty is a positive one," said Jensen. "In an industry steeped in emotion, consumers have demonstrated they are willing to continue to spend on beauty products. Beauty brings joy, which is a universal aspiration and will drive our industry's resiliency in 2023."
While these numbers are fantastic it's important to consider the impact of inflation - revenue was up double digits but many brands increased prices. Next year will tell the real story.
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