As part of the Cosmetic Executive Women (CEW) State of the Beauty Industry event, market research firm NIQ presented its global view of beauty industry trends in 2023 followed by data forecasting for key performers in 2024. Following the presentation, Anna Mayo, VP Beauty Vertical at NIQ noted that “2023 was a strong year for beauty, despite continued global inflation and price increases across the beauty market…[and] 2024 is shaping up to be another strong year for the beauty industry.”
For deeper insights into the NIQ presentation and its key takeaways, we spoke to Mayo to learn more about the evolution of how and where beauty consumers are shopping, surprising details from the market research firm’s analysis, and predictions for influential trends in the coming year.
Presentation overview
The presentation opened with a look back to 2023, where “consumers continued to prioritize their beauty shopping, even when cutting back on other categories across the store,” said Mayo, which is evidenced by overall industry growth. “The great news for the beauty industry is that growth was not just due to price increases, but units grew as well due to increased consumption,” she explained, as “in the US, beauty dollars grew 11.7%, and units were up 3.9%.”
Looking ahead to this year, consumer shopping behaviors are continuing to evolve, and the presentation highlighted several key takeaways regarding these changes. For example, said Mayo, “indie brands, including celebrity beauty brands, are continuing to pick up steam, and with such a proliferation of options, legacy brands are finding it harder to maintain loyalty.”
Further insight into the data also revealed that “retail is consolidating around the largest beauty retailers, making it harder for brands to find success with a DTC-only model,” while e-commerce platform “Amazon continues its rise at the largest beauty retailer in the US.” This coincided with the successful launch of TikTok Shop in the US, which is “proving that social selling can work with the US consumer,” she said.
The presentation also noted that “wellness will increasingly impact the beauty market, as consumers look for products to enhance their wellness journeys, and retailers continue to carve out space for new products,” she highlighted.
In addition to wellness, she also pointed out that in the skin care space, Gen Alpha consumers are a significant driver, “making their brand preferences known, and sparking a conversation around age-appropriate products.” In older demographics, she also noted that “great beauty can come at any price, and consumers are increasingly embracing dupes as they experiment across price points and brands, the old silos around premium and mass products are weakening.”
Of important note is that NIQ analysts “are seeing more of a return to interest in clinical ingredients,” Mayo shared, adding that “while clean and natural ingredients have been very top of mind in recent years, consumers are indicating to us through their search data that they are focused more on scientifically proven clinical ingredients that can deliver results.”
Surprising insights
In addition to the revelations regarding current market conditions and industry trends, several data points were surprising for the NIQ analyst team. For example, “we were surprised to see just how much of an impact Gen Alpha has already had on the skin care category,” said Mayo.
“Some of the Gen Alpha favorite brands are seeing triple digit growth among their age group,” she explained, and “it’s quite extraordinary to see how they have quickly become a consumer group to take notice of, and we would expect brands to begin catering to them more in the future.”
She further remarked that “we have also been shocked and impressed by the fast rise of TikTok Shop, which is already the #12 ranked beauty & wellness ecommerce retailer in the US.” This is noteworthy, she clarified, as “we have not seen a retailer rise to prominence this quickly before in beauty.”
2024 predictions & forecasts
Following the data analysis, the presentation concluded with a swath of predictions for beauty industry trends in 2024, particularly focusing on celebrity brands, beauty dupes, and scalp health trends.
Regarding the future popularity of celebrity brands with consumers, Mayo shared that “celebrity brands continue to grow very quickly, already passing $1B in sales and with a 58% growth rate.” However, “we are starting to see brands separate into the ones that will stick around, and the ones that may be phased out shortly.” she said, adding that “we have also seen the rate of new brand introductions slow down, as the market has become very saturated.”
In contrast, beauty dupes “are proving to help grow the beauty category by providing alternatives and help consumers to expand their beauty routines,” she shared. Moving forward into 2024, she explained, “we are seeing that both brands that are duped, and those that are frequently being duped, are both seeing strong growth rates.”
Finally, she concluded, “scalp health is an emerging trend that we are watching closely,” as “there is strong consumer interest in healthier hair, and as the science and education in this space evolve, we would expect to see the sales follow.”
