PORT WASHINGTON, N.Y. — The prestige beauty industry grew by 6% in 2016, adding $1 billion in sales to bring in some $17 billion total for the year, according to a recent report from the NPD Group. The report highlights that prestige beauty sales outstripped the mass channel thanks to such high-growth categories as makeup, which saw 12% sales growth and contributed 82% of the industry’s total gains, and skin care, which saw 2% sales growth.
Mass beauty’s sales gains, which were about 2% in 2016, were driven by makeup and skin care equally, with skin care in mass showing greater gains than in prestige. Fragrance sales were down in mass for 2016.
“The beauty industry has gained $1 billion for three consecutive years, and while this is something to celebrate, industry players must not get too relaxed. This is no time for walking; it is still very much a run,” NPD Group beauty industry analyst Karen Grant said. “A proliferation of trends has fueled growth and innovation in many aspects of the industry; however, it has brought with it a restructuring in beauty. As consumers seek feel good experiences and strive for healthier lifestyles they are, at the same time, redefining the meaning of beauty in their lives.”
Makeup sales grew 24% over 2015 last year, and though skin care saw a decline in sales, that market was driven by masks, lip treatment, facial cleansers and exfoliators. Fragrance juices sales increased 2% for the year, and flankers were responsible for 161% of fragrance gains. Home scents saw notable growth, with diffusers increasing 19% in sales.
And trends in holiday beauty shopping changed last year, too. NPD Group said that while fragrances typically dominate the holiday market, makeup sales grew 12% during Q4 of 2016, while fragrance sales dropped 1% during the same period of time. Prestige makeup brought in some $525 million more in sales than fragrances during Q4.
“How consumers are using and choosing their beauty products is different today. More than ever, consumers are turning to beauty to look and feel their best. Across industries, services and experiences are on equal, if not higher, footing than products alone. These trends convey to us that there’s a shift in what makes consumers feel good, and how they are gifting to others,” said Grant. “The top-performing brands today are social and community-driven. To be successful, brands and manufacturers need to look beyond the traditional retail channels and find more opportunities to adapt to the emerging trends. They must recognize that it is not only important how many consumers are aware of your brand, but how many convert to it. Those that master this technique will thrive.”