There are many elements that have contributed to growth for the beauty industry, spanning brands, consumers, retail dynamics, product innovation, category trends, and more.
Each of these is embedded in the performance of an industry that has continued to defy expectations, posting dollar growth across the mass and prestige markets over the past few years.
The outlook for 2025 remains positive across all beauty categories.
Looking at Makeup & Skincare’s Performance
While in 2024 makeup struggled in the mass market and growth slowed down significantly in prestige, there are bright spots for the category across both markets that we believe will drive the category in 2025.
Skincare benefits are at the heart of many, including tinted moisturizers and serums. This past year we’ve seen prestige face makeup products with moisturizing, brightening, and mattifying benefits outpace skincare products with the same benefits.
Skincare-focused makeup lip products like lip oils and tinted lip balms have also been bright spots across mass and prestige as the rare subsegments that are strong in both areas of the market. While we expect continued softness in the next year for mass makeup, prestige performance should remain positive through 2025.
‘…skincare remains an opportunity in all areas of the
brand and retail landscape’
The skincare market has emerged as the category that is most aligned across mass and prestige, as top-performing masstige brands with distribution across markets drive growth in both.
In prestige, this has led to value-priced products posting stronger performance, while in mass, super-premium brands are outperforming other price ranges. Masstige brands have placed pressure on both mass and prestige brands in skincare, offering consumers affordability without compromising on quality or efficacy, and we expect this dynamic will continue to impact the category in the coming year.
Even so, we have seen strong pockets of growth happening for mass and prestige brands in areas of the market that are soft, indicating that skincare remains an opportunity in all areas of the brand and retail landscape.
Will Fragrance Sales Rise?
Fragrance is primarily a prestige business, with close to 85% of dollar sales coming from prestige brands, and it holds the highest average price among the beauty categories. This has led to an interesting dichotomy of what we anticipate will continue to drive growth in the next year.
With double-digit dollar increases for the past three years, prestige fragrance should continue to fire on all cylinders into 2025 with growth in both high-end artisanal and luxury brands, and value-based products like fragrance minis and body sprays. Dollar sales of body sprays have nearly tripled in 2024 and show no signs of slowing down.
New products entering the market should be a key contributor to body spray success in the coming year.
Hair Products with Wellness Benefits Will Drive Growth
Hair category sales are dominated by mass brands, but while close to 70% of consumers say price is important, just 16% say they buy only mass brands, which indicates cross-shopping is high and points to a big opportunity in prestige.
Looking ahead to what will drive prestige hair sales in 2025, we expect that products with wellness benefits from hair-thinning to restoration to scalp care and hair growth will remain strong, along with hair treatments and styling products.
With innovation, consumer engagement, and product trends driving growth, the opportunities for growth for both beauty brands and retailers are abundant. We are bullish on the continued resiliency of the market and expect prestige beauty will remain positive, even as growth slows down over the next few years, while mass beauty should continue with soft but steady performance through 2025.
ABOUT THE AUTHOR
Larissa Jensen is Senior Vice President, Global Beauty Industry Advisor at Circana, and a member of Beauty Packaging’s Board of Advisors.
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