By James Manso, JULY 30, 2024 || A Publication of WWD [Women’s Wear Daily]

Despite larger societal factors giving pause, beauty industry leaders at Cosmoprof North America shared a cautiously sunny outlook on the sector’s performance.

As the beauty industry gathered at Cosmoprof North America in Las Vegas last week, the pervading outlook was optimistic, despite indications that the momentum of the last couple of years might be slowing.

Experts and analysts at the trade show reported a consumer who is more engaged than ever, even in the face of a turbulent retail environment, continued economic uncertainty and broader sociocultural issues, such as the impending U.S. presidential elections.

Beauty, though not immune, is still resilient against those headwinds, according to a Circana presentation. Prestige beauty is still the fastest-growing industry the firm tracks, though sales in mass and drug retailers declined due to store closures, according to the presentation. Prestige is predicted to grow through 2026, while the mass market will remain “soft, but steady,” with bright spots including skin care said Larissa Jensen, Circana’s beauty industry adviser, during the presentation.

Total U.S. beauty is up 2 percent, according to Circana, with prestige posting 8 percent gains and mass dipping 3 percent. Units in every category in prestige posted gains, while mass is declining, Jensen said, hinting at a larger premiumization trend.

“It’s the industry that’s growing much faster in terms of demand from consumers,” echoed Liza Rapay, vice president of Cosmoprof North America. When planning this year’s iteration, Rapay mined insights from retailers, buyers and visitors “to truly service the market. We know skin care, makeup and fragrance are growing, so we prioritized those.”

Those categories comprised nearly half of the floor’s space, with key trends being Gen Alpha-geared brands, hair brands focused on textured hair types and men’s grooming brands.

“The mix is getting bigger, and it’s getting better every time,” Rapay said. “We’re constantly evolving, and we’re not in a stagnant place.”

That was the mood on the retail front as well. “We’re delighted to see such strong guest engagement within the beauty category, especially as we continue to evolve our assortment,” said Muffy Clince, senior director of emerging brands and initiatives at Ulta Beauty. “As we look ahead to the rest of the year, we know beauty will continue to fuel self care, self expression and joy.”

Though the annual gathering is focused on North America, the global assortment of exhibitors marked the resurgence of K-beauty and French Girl beauty, Clince noted.

That was a dynamic picked up by other retailers, as well. “K-beauty is making a comeback with new and different formulations,” said Jaclyn Diamond, omni buyer at Macy’s Inc. “The largest conversations I’ve had are around brands coming out of Korea into the U.S. SPF is also huge and only getting bigger.”

Diamond was also homing in on hair care at the show. “We’ve focused on building out this hair care division, and the customer’s reaction is extremely strong,” she said. “We love that we can bring our customers something new in a category that they’re not used to buying in a department store. It’s bringing in multiple purchases and multiple visits.”

Gen Alpha’s buying power was also on full display, with bright packaging and buzzy formats coming to the fore. One brand exhibiting at the show, Mixik Skin, for example, offers a cleanser, toner, serum and mositurizer all in a mist format, which range in price from $25 to $29 each. Inked By Dani, on the other hand, launched a scented temporary tattoo collaboration with Phlur in tandem with the show. Those retail at $15 per pack.

“Gen Alpha absorbs media very differently than Gen Z or Millennials, so we’re thinking about how much they care about their skin and body even younger than past generations,” Diamond said.

Shoppers are getting younger across the board. “Our customer used to be around 30 or 35, and now she’s 25. We’re getting a lot of college kids,” said Ian Ginsberg, owner of C. O. Bigelow. “Kids are getting younger and younger, and they’re just now discovering beauty.”

Driving that discovery was another key theme — for retailers and the trade show itself. Rapay announced Beauty New York, a Cosmoprof North America Event, which will be a consumer-friendly iteration of the trade show to take place in New York in fall 2025.

“We’ve been working on this for over three years,” Rapay said. “With the success of Cosmoprof Miami [held for the first time in January], we knew we were only missing the consumer piece. The U.S. is the biggest beauty market in the world, and New York is the beauty capital of America. Corporate brands will be able to showcase innovation and connect with consumers.”

Still, while the outlook is generally positive, analysts are warning that external factors could potentially put a dent in the market.

“When things get chaotic — socially, politically and economically — it’s a bit like the stock market. People get nervous,”

said Wendy Liebmann, chief executive officer of WSL Strategic Retail. “That’s when they tend to pull back. The underlying concern is about the financial situation for many Americans. That doesn’t put a damper on essentials, but it does on the attitude of adventure and trying new things at premium prices.”

Liebmann’s current assessment of beauty retail is one of cacophony — with key players having their work cut out for them.

“There’s a lot of discordance at the moment. We see categories like skin care and fragrance doing well at the premium level, while at the same time, those channels such as department stores are still struggling,”

she said. “I see lots of innovation coming in the mass space, but those channels are struggling, whether it be drug or some of the big-box retailers.”

As well, some of that interest in beauty, Liebmann reasoned, is bubbling up in less traditional channels.

“With the advent of TikTok Shop and all of the digital social shopping, there’s a level of chaos where every shopper is interested in using beauty: every age, every category, regardless of what the numbers tell us. And yet the retail landscape is so unsettled…”

“Retailers need to create a compelling experiences, and not just for people who have a lot of money. They want skin care, sun care and hair care, and they want new and interesting things.”

She sees most of the opportunity in attracting new demographics — and not just the oft-mentioned Gen Z. “We are not just talking about Gen Z or Gen Alpha, we are talking about Boomers and Gen X. Those generations of shoppers are actively looking to embrace beauty, and that’s a door opener for opportunity,” Liebmann said.

“Shoppers are becoming pragmatic about how they want to choose the products they buy, and the more complex and more redundant we make new products, that does everybody a disservice,” she said. “Brands, big or small, need to step back and ask how to make buying beauty easier for people — not just in terms of clicks, but in the ability to engage in such an emotional category.”

Visit WWD for the full article.