Fenty Beauty is one of the few bright spots at Target
While both Macy’s and Target just reported not-so-pretty third-quarter revenues, beauty results at both retailers defied expectations. At Target, those results stem from the expansion of Ulta at Target, including the red-hot launch of Rihanna’s Fenty Beauty there. And at Macy’s, prestige products and fragrances sales did especially well, as they did at the company’s Bloomingdale’s banner.
Those retailers are not alone, and a new report from Circana indicates cosmetics, skincare, fragrance and haircare companies can look forward to healthy holiday sales -- even as consumers cut back in other categories.
Circana, formerly IRI and NPD Group, reports that sales of prestige beauty products jumped 14% through the nine-month period ending in September. And sales of mass-market beauty products rose 8%.
In prestige brands -- those sold at department stores -- makeup is growing fastest, with lip products gaining the most and eye makeup the least. People buying these products shopped 4% more often than in the same period of 2022 and spent 10% more.
“We expect the resiliency of the beauty industry to extend through the last quarter of the year,” says Larissa Jensen, global beauty industry advisor at Circana, in the report.
“This holiday season, we anticipate growth for the prestige beauty market despite the consumer pullback we are seeing in other general merchandise industries. But as consumer spending power is squeezed, they will make choices that reflect what is important to them. Beauty brands that effectively tap into this emotional connection will be in a position to succeed this holiday season.”
People are also sniffing out value. In prestige fragrances, for example, shoppers are turning their noses up at the high premium luxury brands, opting for lower-priced products. And purchases of fragrance sets, which typically offer more value for the price, increased more than double the rate of sales of individual items.