Is the beauty industry still booming? Is it on the edge of a bust? Or is it just transforming?
Statista reports the beauty and personal care market in the U.S. is projected to generate revenue of $104.70 billion this year. Most of the sales (65.9%) will come from e-commerce. And the largest segment of the market is personal care, with expected sales of $46.7 billion in 2025.
Global Cosmetic Industry says the sales are fueled, in part, by:
Continued Emphasis on Natural and Organic Ingredients: Consumers want products with natural and organic ingredients, driving demand for clean beauty and sustainable formulations.
Hyper-personalization with AI: AI enables personalized beauty experiences, from AI-powered skin care recommendations to customized product formulations.
Beauty Sales and Brand Engagement on Social Media: Social media platforms like TikTok and Instagram drive beauty trends, influence purchasing decisions, and enable businesses to connect with consumers.
Demand for Men’s Beauty Products: The men’s grooming market is experiencing significant growth, with a rising demand for high-quality skin care, hair care, and grooming products.
Global Cosmetic Industry says, “The beauty and personal care market is poised for significant growth in 2025, driven by a confluence of consumer trends and industry innovations.”
Women’s Wear Daily (WWD) reports that Circana’s year-end data reveals that beauty sales (not including the personal care market) reached $33.9 billion in 2024. Fragrance was the big seller in both mass and prestige beauty. In the prestige beauty segment, fragrance ranked second behind makeup and moving ahead of skin care.
Circana’s senior vice president of beauty and industry adviser Larissa Jensen told WWD that 2024 was one of “disruption and stabilization. Is it decelerating, is it accelerating? It’s a bit of everything. Sales performance normalized after years of double-digit growth in prestige, and there have been a lot of disruptors in retail.”
Lip products led sales growth in the makeup category, driven, WWD says, by makeup-meets-skin-care hybrids like tinted balms and lip oils. (I’m embarrassed to tell you how many balms I own.)
But WWD points out, “The skinification of makeup extended beyond the [lip] segment, with face makeup products touting skincare benefits growing faster than skin products with the same benefits. Jensen told WWD, “94% of makeup users reported using products with skincare benefits.”
This point is underscored in the After School Substack. The author, Casey Lewis, a Generation Z authority, asked if the beauty boom was over because Gen Z’s beauty purchases decreased by 5% late last year. She reports that analysts say, “Even skincare-crazed Gen Alpha is starting to buy less.”
It’s not that the younger generations are abandoning the beauty category. But, Lewis writes, “young consumers are shifting toward makeup and fragrance.” The concern? Lewis says those categories have lower replenishment rates than skincare.
But echoing Circana’s reporting, Lewis says the “hottest trend in makeup is skincare. [And] Brands are repositioning traditional makeup products as skincare hybrids.”
An emerging category that is, according to Circana’s Jensen, “growing at a significantly faster rate,” is scalp treatments. Jensen says, “With scalp care, it’s a global phenomenon. The scalp care and hair loss trend is a global dynamic, and every country we track has this growth happening.”
Lipstick picture by fotaro100/Shutterstock
