Circana’s 2024 Beauty Industry Outlook
According to experts at Circana, Prestige Beauty is outpacing mass market retail for the second year in a row. In their January 2024 Beauty Industry Outlook, Circana says “Higher income consumers remain the largest consumer group purchasing prestige beauty products – representing 50% of the shopper base – and they continue to increase their spending, offsetting the pull back from consumers among households earning below $100K per year. The higher income consumers are also less affected by inflationary pressures and less likely to cut back on their beauty spending.”
What can we learn from this article?
For Brand Founders
Little luxuries are driving sales! Customers are spending more on beauty, and becoming comfortable spending more on a single product. This could be an opportunity to expand your assortment with higher quality, higher price point items or explore pushing the limits of your current price. We’re in a period of Price Elasticity, which measures the change in demand relative to price, where prices going up won’t impact sales.
Brick and Mortar are still a major part of the purchase experience! Stores are a destination and experience, allowing you to get your product in front of customers and easily answer questions that may be missed online. While stores are looking for ways to drive foot traffic, consider curating pop-ups and in-store events at a local boutique or in collaboration with stores that fit your aesthetic. It’s a win win for everyone.
For Brand Managers
Surprise and Delight for more sales! The little luxury trend matters here too. Customers are looking for a “treat” that won’t break the bank. Think of opportunities to elevate your assortment or offer added value that will drive traffic (digital and in-person) on frequently consumed products. Increased volume on higher price points is incremental sales.
Young consumers are buying more prestige beauty, specifically skincare. This flies in the face of what we believed to be true about Boomers driving skincare trends. Make it a point to realign your marketing strategy to put prestige products at higher price points in front of this demo!