Where Consumers Shop for Beauty and Personal Care

June 2023

Beauty and personal care sales fell in 2022, amid strong inflationary pressure. Consumers are looking for convenience and are decreasingly channel loyal. In this scenario, retailers have widely adopted omnichannel strategies. E-commerce has seen strong growth for fragrances and colour cosmetics. Both categories continue to improve the consumer experience and engagement through technology. Specialist health and beauty retailers are investing in innovative store strategies to attract consumers.

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This report comes in PPT.

Key Findings

Global beauty and personal care sales declined in real value terms in 2022

Beauty and personal care sales declined in 2022, with consumer confidence, sustained momentum in digital beauty engagement and the increase of travel and social occasions insufficient to compensate for high inflation, rising unit prices and strained supply chains.

Consumers’ channel loyalty disrupted by downtrading

Price-sensitive consumers started downtrading between categories, discovering private label and alternative retail channels. The one-stop shop is in the past, and with new virtual tools, consumers are now looking for convenience, switching from one channel to another for any purchase they make.

Retailers increasingly adopt omnichannel strategies

Consumers are increasingly adopting multichannel shopping approaches. Post pandemic, in-store sales have rebounded, as consumers prefer to try products; however, they gain product knowledge through online channels. This makes omnichannel a crucial strategy for retailers. Beauty and personal care retailers are ramping up their phygital solutions to provide a seamless experience for their customers.

E-commerce keeps growing, especially for colour cosmetics and fragrances

Fragrances and colour cosmetics continue to be the most dynamic beauty and personal care categories for e-commerce. While fragrances have added science and repurposed products towards emotions, colour cosmetics manufacturers have developed hybrid approaches and multi-benefit products. Both categories have continued to improve the consumer experience and engagement through technology.

Specialist retailers continue to invest to remain competitive

Specialist health and beauty retailers are investing in innovative store strategies to attract consumers. This includes expanding store-in-store formats in partnership with modern grocery retailers, as well as widening product portfolios to reach a diverse customer base.

Key findings
A challenging market environment for beauty and personal care in 2022 and into 2023
Asia Pacific remains the largest region in 2022, despite sales declining in constant terms
Fragrances continues its premiumisation, while skin care decelerates
Bricks-and-mortar remains the preferred channel for beauty purchases
E-commerce growth slowed in 2022, but continues to capture offline sales share
E-commerce share to grow steadily across all beauty and personal care categories
Increasing metaverse collaboration between beauty brands and Decentraland
Store-based beauty shopping demand sustained amidst e-commerce surge
Store-based retailers expand physical reach and offer diverse product ranges
Health and beauty specialists diversify strategies to maintain market share
Health and beauty specialists are tapping into the wellness beauty to expand business
Studio by Sally: Shop, DIY and savvy all in one
Grocery retailers’ growth displays fair growth
Hy-Vee: Adding novelty and claims to stand out and compete with beauty stores
Pharmacies adopt rapid expansion strategies
Markets with high inflation recorded strong growth in private label sales
Private label benefits from growing “dupe” culture, alongside effects of inflation
Non-store channel expands, with e-commerce more dynamic than direct selling
Skin care e-commerce boom stabilises; fragrances and colour cosmetics continue to expand
E-commerce grows strongly in Latin America and the Middle East and Africa in 2022
Amazon retails lead, while Walmart’s expansion pushes it up the rankings
Beauty festivals, creating occasions and premium experiences
Amazon – the go-to place for e-commerce beauty in the US
Livestreaming becomes a crucial strategy to attract young consumers in China
Facial care leads skin care e-commerce, even in body care-focused Brazil
Beauty e-commerce in Australia may be affected by regulatory changes from TGA
Latin America the strongest region for direct selling, but post-pandemic challenges exist
Growth to slow down in the forecast period, due to consumers’ price sensitivity
Adoption of omnichannel strategies to increase, leading to sustained online sales growth
Deinfluencing reflects demand for authenticity, but channel impact remains to be seen
Tax free offers new opportunities for beauty as store formats evolve
L’Oréal Travel Retail and TripAdvisor strike a partnership to target US and UK travellers
Key takeaways

Beauty and Personal Care

This is the aggregation of baby and child-specific products, bath & shower, deodorants, hair care, colour cosmetics, men's grooming, oral hygiene, fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.

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