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U.S. beauty market to grow as fragrance and makeup drive sales, finds Kline

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The U.S. beauty and personal care market surpassed $85 billion in retail sales in 2021, an increase of $7 billion from 2019 sales levels, according to Kline. This is the market’s strongest performance in the last 10 years but growth is expected to continue as the market research firm forecasts a 6% CAGR [1] through 2026.

Fragrance and makeup boom

Some categories, such as fragrance and makeup, are back on the radar for consumers and retailers alike, with escalating sales of these products fueling total industry growth, wrote Dana Kreutzer, Project Lead, Consumer Products, at Kline, in a recent blog post.

“ Makeup , which jumped 12% in 2021, is moving in a direction where hybrid experiences, or skin-improving makeup, are becoming more common when it comes to product innovation,” said Kreuzer, mentioning recent launches such as Kosas’ Revealer Skin-Improving Foundation SPF 25, with brightening and plumping claims, and Chanel’s new N°1 de Chanel Revitalizing Foundation, with moisturizing and plumping claims.

Fragrance recorded an even higher activity last year, with an increase of 25% within the luxury segment. The category also witnessed an influx in male consumers.

According to Kreutzer, the importance of makeup and fragrance is further supported by recent results from market leaders; for instance, L’Oréal’s recently released Q1 2022 sales report showed that makeup was a top growth contributor and its fragrance portfolio continued to drive the performance of its Luxe division in North America.

Retailers investing in beauty

More broadly, the growth of beauty sales is driven by consumers coming back to stores. Based on foot traffic data from SafeGraph, Kline found that Q1 foot traffic was up 25% versus year ago and up 14% from 2019 levels for select beauty retailers such as Sephora, Ulta, and Bath & Body Works.

In such a context, big retailers are now transforming their beauty operations to keep shoppers coming back. According to Kreutzer, mass retailers like Target and Walmart are tapping further into beauty via store remodels and partnerships with premium beauty retailers, including Ulta (Target) and Space NK (Walmart).

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