As inflation continues to squeeze Americans' salaries, consumers are being “very careful” with their spending. Despite this, strong demand for beauty products shows that people are still investing in their appearance. Companies are competing to position themselves in the beauty space, and an increasing number are leaning towards this market to get in on the action. Unlike other retail categories, such as grocery, where customers are increasingly opting for private brands as their budgets shrink, some beauty companies say they haven't noticed any change in consumer activity.
Ulta CEO Dave Kimbell said in the company's earnings call last month that the company had seen no evidence that customers were trading lower. However, competition is getting tougher as more companies enter the market or expand their offerings. In July, pharmacy giant CVS Health announced that it would open skincare centers at three CVS stores as part of a pilot program to introduce new prestigious brands into the mass retail of beauty products after having succeeded with its BeautyIRL stores in its stores. Even food retailers are getting in on the action; Grocery Dive reported last month that Thrive Market, an online natural food provider, has also entered the beauty space.
Skincare and makeup for men is one of the fastest growing trends in the beauty industry. Lipstick was the most popular product category, with hair extensions, wigs and accessories in close second place. Ipsy influencers generate millions of dollars in advertising revenue on YouTube, which they then share with Ipsy and Ipsy returns them by making those beauty influencers a cornerstone of their business, offering services to help emerging influencers connect with Ipsy's large audience and creating a luxurious studio where influential people can create videos with high production values. Data shows that sales of multicultural beauty products are growing at a rate that doubles the conventional beauty market.
More specifically in relation to the beauty industry, 58% of buyers say they are more likely to buy from a company that offers an online questionnaire to recommend specific beauty products. Although hand sanitizer is not usually considered a beauty product, beauty companies have taken the initiative to add hand sanitizers to their product lines.