Results are in for how beauty sales fared in 2018 and according to figures released by The NPD Group, it was brick-and-mortar stores and skincare that pushed things over the line.
The market research company reported that though it was a disappointing December, 2018 finished with a six per cent increase for the year.
Breaking down the results, brick-and-mortar stores are responsible for the bulk of the $18.8 billion in U.S. prestige beauty sales.
Skincare posted the biggest jump with a 13 per cent gain to $5.6 billion, with natural skincare accounting for $1.6 billion of sales, up 23 per cent from prior years. Skincare also outstripped the former leader, makeup, which managed to barely bring in a one per cent increase, compared to a six per cent gain in 2017.
Fragrance, which built up an eight per cent gain for 2018 through October, came out of the holiday period with a year-end increase of four per cent to $4.3 billion. The highest percentage increase was generated by hair products, which saw a 25 per cent increase to $730.1 million.
Skincare may have had the biggest jump in 2018, but Jefferies equity analyst, Stephanie Wissink, said there are indications the category may be slowing for the year ahead.
“Through the third quarter, the skincare business had started to trail off a bit,” said Wissink, referring to The NPD Group data.
Wissink also noted that 2016 was the peak year for buying and using cosmetics. “Then 2017 and 2018 were about skincare. Now that cycle is peaking a bit, too. She’s got her regimen. She’s just not seeing as much excitement in terms of newness in the marketplace.”
In terms of the impact brick-and-mortar stores had on sales last year, The NPD Group executive director and beauty industry analyst, Larissa Jensen, expects current trends to remain in place.
“Given the high adaptability of the beauty industry, I expect growth to continue in 2019, though it may be at a slower pace given the current economic uncertainties,” said Jensen.
“I expect we’ll see an amplification of trends and themes that have already taken shape, including brand transparency, heightened importance of companies taking a stance on key social issues, as well as the evolution of experiential retail and pop-up concepts.”
