Adobe Analytics: Budget-conscious consumers are splurging for cosmetics online
Adobe released new online shopping data today (covering the period from January 1 to May 31, 2024) showing that even as consumers become more price-sensitive in categories like groceries, electronics and apparel, they are splurging in the cosmetics category for items such as fragrances and lipstick.
Based on Adobe Analytics data, the report provides the most comprehensive view into U.S. e-commerce by analyzing direct transactions online, covering over one trillion visits to U.S. retail sites, 100 million SKUs and 18 product categories.
Consumers “trading up” for cosmetics products
After months of persistent inflation, shoppers are embracing lower priced goods across major e-commerce categories. To conduct the analysis, prices were separated into four quartiles from the highest to lowest prices, across categories that Adobe tracks. Shares of units sold in the most expensive and least expensive quartiles were then tracked for the months of April and May 2024, and then compared to January 2024 levels.
Adobe found that the share of the two least expensive quartiles of goods increased materially across major categories including electronics (up 5.3 percent), apparel (up 4.7 percent), home & garden (up 3.3 percent), furniture & bedding (up 2.1 percent), grocery (up 1.8 percent) and personal care (up 4.2 percent). Conversely, share of the two most expensive quartiles decreased by 8.5 percent in a category like electronics, and 9.5 percent in apparel.
The broader personal care category saw share of the most expensive goods decrease by 10.8 percent, but the cosmetics sub-category bucked the trend: In fragrances, shares of the most expensive goods increased by 19.4 percent. And on a year-over-year (YoY) basis (e.g., comparing April and May 2024 to the same period last year) the share increased by 9.9 percent. Online spending for fragrances have risen as a result, driven in part by this “trading up” trend. Daily sales are up 53 percent from April to May 2024 (vs. daily sales in January 2024). And on a YoY basis, sales are up 27 percent.
Consumers splurge for higher-end lipsticks and purple shades
In lipsticks, share of the most expensive goods increased by 37.1 percent, while rising by 18.1 percent on a YoY basis. Like fragrances, consumers embracing higher-end lipsticks has pushed up spending online, with sales up by 49 percent from April to May 2024 (vs. daily sales in January 2024) while rising 27.7 percent YoY.
Additionally, purchases of purple-toned lipsticks (e.g., plum, mauve, purple) have risen an impressive 103 percent YoY, followed by pink tones (e.g., pink, rose, nude) which are up 61 percent YoY. Some of the top trending lipstick finishes have included satin (up 35.5 percent), matte (up 35.2 percent) and glossy (up 21.7 percent).
Cosmetics category emerges as a growth driver in the digital economy
While electronics, apparel, furniture and groceries remain the largest e-commerce categories by share (driving over 50 percent of overall spend online), cosmetics has seen strong signs of growth. In 2023, consumers spent a total of $35 billion online for cosmetics, up a significant 15.6 percent YoY. For the first 5 months of the year (January to May 2024), $16.3 billion have been spent online for the category, up 8.8 percent YoY. Contrast that with electronics, which drove $77.8 billion in the same time period but grew more modestly at 3.2 percent YoY. And in apparel, consumers spent $65.9 billion, up 2.9 percent YoY.
Trends across other cosmetic categories
While lipstick and fragrances have been notable sub-categories driving growth, other products are seeing material upticks as well: Lip gloss sales are up 31.4 percent YoY, followed by setting and finishing products (up 18.4 percent YoY), mascara (up 8.6 percent YoY), concealer & foundation (up 8.3 percent YoY) and nail polish (up 5.1 percent YoY).
Additional trends per Adobe’s data:
- In concealer & foundation, understated and lightweight products (e.g., sheer finish, skin tint) are rising in popularity amongst consumers, with sales up 51.5 percent YoY.
- Plumping lip gloss continues to be a popular item, up a notable 60 percent YoY.
- Lengthening mascara has seen sales rise 30.9 percent YoY, while volumizing, lifting and curling mascaras have seen slightly negative growth in the same time period.
- Skin care, serums, creams and other related products containing peptides and ceramides have become increasingly popular, up 30.2 percent YoY.
In 2024, Adobe anticipates hot sellers in cosmetics to include: Sol de Janeiro Perfume Sets, Clinique Almost Black Honey Lipstick, Charlotte Tilbury Pillow Talk Plumping Lip Gloss, Summer Friday’s Lip Butter Balm, and Laura Mercier Translucent Loose Setting Powder. ("hot sellers” data is based on both e-commerce activity and social media buzz).