High income shoppers have already spent nearly $9B on beauty in 2022: report
Retail Dive | August 30, 2022Dive Brief:
Consumers with an annual household income of over $100,000 have spent nearly $9 billion on beauty products in the first half of 2022, according to a report by The NPD Group.
That marks an increase of 14% year over year, with Gen X and millennials leading spending.
The double-digit growth is due to a combination of more buyers in the market and consumers spending more compared to 2021, per the report.
Dive Insight:
Even as many households have cut discretionary spending during a time of high inflation, the beauty category is showing signs of resilience.
Eighty-five percent of consumers have indicated a shift in their shopping behaviors, according to a recent Morning Consult survey. Yet, higher-income shoppers are more insulated from inflation and are less likely to alter shopping behaviors.
Moreover, high income U.S. households account for more than 40% of beauty sales revenue, according to NPD research.
“During this critical time when retail recovery is forced to coexist with mounting economic pressures, it is imperative for beauty brands and retailers to understand which consumers are most engaged and willing to spend,” Larissa Jensen, beauty industry adviser at NPD, said in a statement. “These behaviors can vary by beauty category but getting it right and acting on it can provide the competitive advantage necessary to succeed.”
Ulta, which sells a mix of mass and prestige beauty, defied most other retail’s earnings by reporting last week that net sales grew nearly 17%. The company said that its ongoing expansion of Mac and Chanel Beauty into more store locations contributed to a strong prestige performance, which saw double-digit growth in both skincare and beauty.
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