Insights into the US beauty products market: 5 trends to watch out for in 2023!

According to the latest research from eMarketer, despite the adverse effects of economic recession and inflation, American consumers continue to spend money on beauty products. In 2023, the retail sales of the cosmetics and beauty market in the United States will reach 86.42 billion US dollars, an increase of 7.6% from 2022. In-store sales and luxury beauty categories will be the driving force of this market. In the future, technology will further promote online sales.

eMarketer uses five charts to reveal the key trends in the US beauty market in 2023:

1. In-store sales are the main driver

eMarketer predicts that in-store sales are expected to account for 18.7% of total retail sales in 2023. In addition, according to a YouGov survey, nearly half (44%) of US consumers prefer or mainly purchase health and beauty products offline.

To capture in-store sales, companies like Glossier and Chanel are expanding their physical store presence. Others, like Ulta Beauty, are experimenting with the “pop-up store” model to expand their reach.

2. Strong demand for high-end beauty products

According to Insider Intelligence and Bizrate Insights, beauty (45.4%) is the third-largest purchase category for U.S. luxury buyers.

Although inflation in the United States has skyrocketed, the luxury goods category has not been affected. eMarketer predicts that personal luxury goods retail sales in the United States this year will reach 116.56 billion US dollars, an increase of 6.7% over last year, exceeding the 3.3% increase in total retail sales.

3. If inflation persists, the beauty market may suffer a downturn

Amid turbulent economic times, less than half (44%) of U.S. adults plan to spend the same amount on health and beauty products this year as they did last year, according to Metapack.

Despite this, beauty remains the most resilient category. Larissa Jensen, beauty industry consultant at NPD Group, said: "Amid economic uncertainty, consumers have shown that they are willing to continue spending on beauty products. Beauty brings joy to people and will drive growth in the beauty industry in 2023."

4. Beauty consumers’ preference for in-store shopping may curb e-commerce return rates

According to eMarketer's forecast, U.S. retail returns will reach $627.34 billion this year, an increase of 8.5% year-on-year.

While beauty is one of the top product categories for consumer returns, its return rate is lower than apparel, consumer electronics, and footwear because a large portion of consumers in this category choose to shop in-store and touch and feel the products, which results in a significantly lower online return rate for beauty.

eMarketer said retailers can reduce and manage return requests by providing customers with more information on product pages, including high-quality product descriptions, 3D or 360-degree images, augmented reality tools, and customer reviews with photos and videos.

5. VR may play a bigger role in the beauty category

When it comes to AR, retailers and consumers alike are still figuring out the role the Metaverse will play in the shopping experience, but some powerful use cases are already emerging.

The Metaverse allows consumers to see how different beauty products look on them without having to try them out in person. For example, Snapchat has partnered with Ulta Beauty and MAC Cosmetics to launch AR lenses that allow users to virtually try on makeup and provide purchase links.

As social media platforms continue to expand their e-commerce capabilities, beauty brands are likely to invest in more VR tools to stimulate consumer purchases.

Editor ✎ Nicole/

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