What is behind the spending boom in the beauty sector?
Beauty, which is now considered essential by consumers, has been undeniably booming this year. Delving into data from Barclays Consumer Spend research, TheIndustry.beauty uncovers what propelled the UK’s beauty industry in 2024.
Barclays data from July and August 2024 confirms that the health and beauty industry is thriving, with consumer spending up by 7.3% year-on-year in August 2024. With almost half (46%) of consumers saying they consider health and beauty products to be essential, they're ready to spend.
"Our data shows that social media has proven to play a key role in influencing online purchases, a further demonstration of the rising commercial importance of these platforms," said Karen Johnson, Head of Retail at Barclays UK.
In part, the rising cost of living seems to have shifted consumers’ spending priorities, increasing focus on self-care and wellness over the past three years. Pharmaceuticals, haircare, bodycare and fragrances have been particularly resilient.
Reflecting on the beauty boom, management consulting firm McKinsey anticipates that the top-tier luxury (such as La Mer and Byredo) and ultra-luxury (such as Guerlain and La Prairie) markets could increase from approximately £15.7 billion ($20 billion) in 2023 to around £31.4 billion ($40 billion) by 2027.
Beauty Pie, which offers luxury-quality cosmetics at transparent factory prices, is seeing its online memberships continue to grow. Sophie Jenkins, Global Marketing Director at Beauty Pie, said: "Members are looking for higher quality and affordable products from the comfort of their home, making the beauty shopping experience more convenient and accessible than traditional retail businesses.
"Given the recent economic impact on consumers, it’s important we remain a brand that our customers know will not compromise on quality. "
Social media's influence
Social media is playing an evolving role in shaping consumer spending habits across the beauty sector. For example, sales for 'dupes' have skyrocketed thanks to penny-saving savvy shoppers. Searches for 'dupes' on TikTok generate hundreds of thousands of viral videos from users sharing their tips on finding more budget-friendly alternatives, which turn into sales.
Shopping directly from social media platforms is also on the up. According to Barclays, 27% of respondents have bought beauty and skincare products and 17% have purchased fragrances on platforms such as Facebook and Instagram.
Social platforms are even shaping consumer decisions about what they should avoid buying. Since January, the number of surveyed people watching ‘de-influencing’ videos has climbed from 11% to 17%.
Reacting to purchasing patterns
The survey highlights that changing priorities are reshaping the industry. Brands will need to be agile and develop strategies that match shifts in shopper behaviour. According to Barclays, beauty brands should be making the most of online platforms and offering shoppers a mix of purchasing pathways.
These industry insights can be taken into consideration by retailers who are "looking to adapt to new consumer needs and behaviours ". Johnson concluded: "The key to a resilient retail model is examining these trends to better understand future purchasing behaviours."
