The beauty industry’s resilience continues to shine. Among CPG and prestige retailers in the U.S., beauty outperformed total store sales across the remaining industries in 2024 – and in many cases drove stronger total store growth – showcasing that when beauty performs well, other industries rise. Even as economic sentiment declines, U.S. consumers continue to turn to beauty products and the industry outlook is positive for 2025. Generational impacts on overall market trends and other dynamics will drive the positive momentum in the coming year.
Let’s first look at consumers’ multifaceted approach to beauty, which can vary by age and highlights the differences in attitudes, purchase influencers, and shopping preferences. These nuances are important for beauty brands and retailers to understand because actual behaviors may be counterintuitive to presumed expectations. Gen X is a great example here; their behaviors when engaging with beauty are more aligned with younger Gen Z and Millennial consumers than with older Boomers. Recognizing these distinctions can ensure we as an industry connect with key consumer groups most effectively.
In addition to Gen X, another key consumer group is Gen Alpha. They burst onto the beauty scene a little over a year ago and their enthusiasm has only accelerated. Higher income households with children under 18-years-old have grown their spending on beauty products three-times faster than everyone else. While tapping into a whole new crop of unexpected buyers can be exciting, this is a double-edged sword for the industry. We can encourage their youthful enthusiasm, but we also have an obligation to keep them safe. Developing age-appropriate products and focusing on continued education will lead to positive engagement, which will be key to appealing to this emerging consumer for years to come.
Millennials continue to drive shifts and trends in the market as they age and their needs and priorities change. One example is in makeup, where Millennials are showing the largest drop in usage, which contributed to the slowdown in sales performance across the mass and prestige markets. This cohort has also shown the biggest pullback in their discretionary spending across multiple industries outside of beauty. Within beauty, they remain engaged overall, but if their behavior across other industries is any indication, they may have to make different choices in the coming year regarding their beauty spend. Identifying ways to encourage continued engagement from Millennials will be key to ensuring industry success.
Across generations, dynamics and trends may vary, but there is one element that unites us: regardless of age, 75% of consumers believe that it is more important to feel good than to look good. Maximizing that opportunity will require our industry to turn traditional marketing language on its head. Clearly communicating that beauty is most about feeling good will go a long way for all beauty enthusiasts and ensure a strong, resilient future.
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