The year in beauty was more than just latte girl makeup, influencer drama over L’Oréal’s Telescopic Lift mascara, and the ongoing struggle to secure Drunk Elephant bronzing drops.
While continually inflated prices impacted CPG categories like grocery, the beauty industry proved to be largely recession-proof this year. But consumer behavior still shifted, and so did beauty category dynamics, causing brands and retailers to adapt their strategies.
Mass quantities: Ulta reported strong results quarter after quarter this year, and even as prestige beauty sales slipped at the retailer (and players like Estée Lauder struggled) mass cosmetics continued to thrive as consumers embraced more affordable beauty options.
Among the highlights in the mass cosmetics category was E.l.f. (teens’ favorite beauty brand), which notched continual growth throughout the year thanks to an ad campaign with White Lotus star Jennifer Coolidge and its Halo Glow Liquid Filter and Beauty Wands, which is often described as a dupe for Charlotte Tilbury and other more expensive products (see: BeautyTok).
“We have a unique ability to deliver holy grails, taking inspiration from our community and the best products in prestige and bringing them to the market at extraordinary value,” Tarang Amin, E.l.f. Beauty’s chairman and CEO, said on its fiscal fourth quarter earnings call.
Other mass cosmetics players were on the comeback trail. After filing in January, Morphe owner Forma Brands exited bankruptcy with a sale to its investor group, which includes Jefferies Finance. Revlon, who along with its namesake brand operates brands like Almay, Cutex, and SinfulColors, emerged from bankruptcy in May after filing in June 2022, slicing down its debt by $2.7 billion and passing ownership over to its lenders. CEO Debra Perelman said at the time of the company’s emergence that it hoped to unlock “the full potential of our globally recognized brands.”
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Let’s make a deal: While the M&A market had a cooler year, several beauty brands struck notable deals. After months of speculation regarding who would purchase Australian beauty brand Aēsop, L’Oréal made its largest-ever brand acquisition and grew its Luxe Division with the purchase of the brand from Natura &Co in a deal valued at $2.5+ billion.
Mass brands also made M&A moves, ushering in what Business of Fashion called the “next wave of beauty M&A.” P&G kicked off the year purchasing textured hair care brand Mielle Organics. In a bid to move deeper into skin care, E.l.f. bought Naturium for $355 million. Unilever, meanwhile, offloaded Suave in February to Yellow Wood Partners, as well as Dollar Shave Club in October to private equity firm Nexus Capital Management in an effort to focus on the top 30 “Power Brands” in its portfolio like Dove and Vaseline.
Something to TikTok about: TikTok this year continued to be a major force in driving beauty discovery and purchases, with brands like Not Your Mother’s, Murad, and NYX all having viral moments with their products on the platform. TikTok this year also helped boost sales for certain subcategories like artificial nails, whose sales outpaced nail polish, per NielsenIQ, while FragranceTok supported a boom in fragrance purchases.
And the September debut of e-commerce platform TikTok Shop in the US showed signs of growing category engagement on TikTok and disrupting the beauty retail space, ranking 20th in health and beauty sales across e-commerce retailers and accounting for 85% of the platform’s sales, according to NielsenIQ.