U.S. beauty industry gains $1B in 2016, makeup leads
A new study released shows the U.S. beauty industry has grown by $1 billion dollars in 2016 with makeup driving sales.
The study, called Hot Off the Press, provided a review of annual beauty sales and trends and was released by the NPD Group at the Cosmetic Executive Women’s Global Trend Reports event in New York.
The study found the U.S. beauty industry grew 6 percent in 2016 and reached $17 billion in sales.
Of the $1B growth, makeup drove the numbers with sales up 12 percent, contributing to 82 percent of the total industry gain. Skincare and fragrance trailed at 2 percent and 1 percent of the sales numbers for the year. While $1 billion dollars in growth seems like something to celebrate, that was not the message at the CEW event.
Karen Grant, global beauty industry analyst at NPD warned that "industry players must not get too relaxed. This is no time for walking; it is still very much a run."
Grant continued, "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 dominated sales throughout the year, even during the holidays when fragrance typically takes the lead. Fragrance actually dropped 1 percent in Q4 of 2016, while makeup continued ahead with a 12 percent growth rate. This translated to $525 million more sales for prestige makeup over fragrance during the holiday season 2016.
Grant explained how changes in consumer preferences are driving this trend: “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.”
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