The Online Cosmetics Surge: Is It Pretty?

Experts say the 8.8% jump in online cosmetics sales helps one sector but portends poorly for the overall consumer outlook.

Beauty is in the eye of the beholder—unless we’re talking about online cosmetics, whose soaring sales numbers look good to just about everyone. But there’s a catch.

According to the latest figures, online cosmetics sales are up 8.8% year-over-year for the first five months of 2024 according to new figures from Adobe Analytics. That’s impressive compared to most online shopping sectors—electronics is up by 3.2% and apparel by 2.9%, with an all-sector average of 3%. But experts say it’s less impressive for the economy as a whole, because it means that consumers are splurging only on lower-priced items while they reduce overall spending. “It’s indulging in something small that makes you feel great,” says John Long, North America retail sector leader for Korn Ferry.

Indeed, Long says strong cosmetic sales are a “bellwether for a challenging economy.” As he sees it, “It’s a pretty good tell that consumer confidence is waning.”

Economists have long pointed to another sector—automobile sales—as a bellwether for the economy. During downturns, consumers’ appetite for big-ticket spending typically plummets. But cosmetics serve a different, albeit complementary niche: The consumer driving a decade-old car still wants to splurge, and purchasing a shimmery new eye shadow or shiny gloss allows them to do that without spending a bundle.

Experts are not surprised to see cosmetics sales surging, especially after years of pandemic quarantines. Now that people are out and about again, they’re attending events that require dressing up, says retail expert Craig Rowley, senior client partner at Korn Ferry. Sales figures from Adobe indicate that shoppers are trading up to more expensive cosmetics: Online fragrances are up 27% year-over-year, while lipsticks are up 27.7%, with the most expensive quartile of lipsticks up 18.1%. Mauve, plum, and purple are “in” this season; all three have doubled in sales from last year.

Cosmetics are also unique in that shoppers consider them essential, like toothpaste and other toiletries, says Rowley. That creates a distinctive category of generally affordable items that shoppers want and need—and can easily order online. Since consumers know they’re going to buy eyeliner, they can easily rationalize a jump from a $28 tube to a $48 tube. “We all reward ourselves every now and then,” says Rowley. “It’s ten or twenty dollars to feel attractive.”

Experts say that aside from more discounting, retailers can’t do a lot to shift consumer confidence. But they do advise retailers to take advantage of the increased consumer interest in cosmetics wherever possible, using strategies such as programming online algorithms to suggest specific purchases or related items within cosmetic categories. Experts are closely following these sales figures for signs of another slowdown. During the slump of 2008-09, trips to fancy restaurants and new car purchases evaporated… but not cosmetics sales. “People still wanted to treat themselves every so often, and they did a lot of that in personal-care items,” says Long.


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