Domestic Prestige Beauty’s Comeback

Analysis Beauty

According to The NPD Group, fragrance was the big winner in 2021, outperforming all other beauty categories with a 49 percent jump in sales compared to 2020. As consumers looked to treat themselves, the fragrance category registered double-digit growth in both 2020 and 2019. Perfumes, colognes, and other fragrance juices increased by 61 percent year over year, while candles, reed diffusers, and other home scents grew by more than 20 percent. During the critical holiday selling season in 2021, fragrance sales revenue grew by 35 percent during the fourth quarter.

Hair products grew 47 percent, makeup 23 percent, and skin care 18 percent for the year. The sales of fragrances, hair care, and skin care in 2021 exceeded those in 2019. In 2021, the prestige beauty industry generated $22 billion in revenue, up 30 percent from 2020.

During the pandemic, products that have become popular during the beauty industry, such as perfumes, scented candles, facial exfoliators, nail care, and hair care products, have continued to grow. As consumers returned to work, events, and other social activities, the makeup foundation, hair styling products, and other segments of the market began to recover.

“The beauty industry is unique in its ability to instill self-confidence and change the way people feel,” said Larissa Jensen, Beauty Industry Advisor at NPD. “These timeless abilities keep our industry-relevant and important in the minds of our consumers — regardless of circumstances or lifestyle changes. As was the case across the retail world, the beauty market faced hurdles in 2020 but proved its resiliency in 2021.”

With consumers seeking to re-enter society, sales of face makeup products, including foundation, primer, and tinted moisturizer, increased double digits, as did sprays and removers for setting makeup.

Consumer interest in makeup artistry returned in the makeup category in 2018, with growth also observed for cream and stick blushes and other products widely used in YouTube videos and other social media. In addition, makeup brands created by makeup artists and social influencers had the highest revenue gains of all makeup brands.

Sales of hairsprays, gels, mousses, and other styling products grew 45 percent, compared to 2020, in the hair category. The hair styling segment is expected to grow an additional 15 percent by 2022. According to the Future of Hair Report from NPD, growth is expected to continue through 2024, as people return to more social activities.

Sales of skin care products including facial cleansers, creams, and serums grew 15 percent to 24 percent compared to 2020. Specific treatments such as eye and lip treatments were also more popular. Clinical skin care brands were among the highest revenue gains in the category. In 2021, clinical surpassed natural as the largest brand type in skincare, based on revenue.

We expect beauty brands to continue to thrive as more consumer seek to look and feel better about themselves and their outlook on the world as a whole. Beauty businesses that are dialed into the evolved post pandemic consumers and retail environment will benefit the most as new opportunities present themselves.